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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 2, 1999
Annie's Homegrown Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 33-9382-LA 06-1258214
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
395 Main Street
Wakefield, MA 01880
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(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: 781-224-1172
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
ITEM 1. CHANGES OF CONTROL OF REGISTRANT.
On November 30, 1999, pursuant to a Special Meeting of its
Stockholders, Annie's Homegrown, Inc. (the "Company") amended its Certificate of
Incorporation, as amended, to authorize one million shares of Preferred Stock,
par value $2.00 ("Preferred Stock"), with rights and preferences as determined
by the Company's Board of Directors.
Pursuant to a meeting of the Company's Board of Directors also held on
that date, all of the Preferred Stock was designated Series A Preferred Stock,
with rights and preferences as set forth on a Certificate of Designation filed
on that date with the Secretary of the State of the State of Delaware. The
Series A Preferred Stock, in the aggregate, has voting rights equivalent to one
million shares of Common Stock.
Pursuant to an Investment and Stock Purchase Agreement dated as of
December 2, 1999 (the "Purchase Agreement"), Homegrown Holdings Corp., a
Delaware corporation that was previously unaffiliated with the Company
("Homegrown Holdings"), agreed to purchase one million shares of Preferred Stock
for $2 million.
In connection with the Purchase Agreement, the Company also executed a
$1 million promissory note in favor of Homegrown Holdings, with interest at the
rate of 9% per annum, and five year warrants to purchase 1,500,000 shares of the
Company's Common Stock with an exercise price increasing from $2.00 to $4.00 per
share over the life of the warrant. Each of the exercise prices will be reduced
by $.50 per share if the Company does not meet certain financial performance
milestones for the fiscal year ended March 31, 2000. The promissory note and the
warrants are currently being held in escrow pursuant to an Escrow Agreement
pending the Company's receipt of the loan proceeds from Homegrown Holdings.
In a related transaction, Homegrown Holdings entered into certain
agreements, also dated December 2, 1999 (the "Stock Collar Agreements"), with
the Company's co-founders, Mr. Andrew Martin and Ms. Ann Withey, which provided
a stock collar in favor of Homegrown Holdings on all of Mr. Martin's and 900,000
of Ms. Withey's shares of Common Stock of the Company. In connection with his
Stock Collar Agreement, Mr. Martin executed an Irrevocable Proxy, dated December
2, 1999, in favor of Homegrown Holdings to vote all of his shares of Common
Stock. Ms. Withey also executed an Irrevocable Proxy, dated December 2, 1999, in
favor of Homegrown Holdings with respect to 852,903 of her shares. On December
2, 1999, Homegrown Holdings purchased 47,097 shares of Common Stock from each of
Ms. Withey and Mr. Martin.
As a result of these transactions, Homegrown Holdings currently has the
right to vote approximately 75% of the Company's outstanding shares. Thus, the
Purchase Agreement and the related Irrevocable Proxies resulted in a change of
control of the Company.
Mr. Martin and Ms. Luster resigned from the Board of Directors
effective as of December 2, 1999. On December 2, 1999, the Board of Directors
appointed John Foraker, Ellen Ambrose, C. Richard Lemon, and Michael Moone to
fill vacancies on the Board of Directors. The Board also elected John Foraker as
Chairman of the Board, Paul Nardone as the Company's President and Chief
Executive Officer, Neil Raiff as its Chief Financial Officer, Treasurer and
Secretary, and Stephen L. Palmer, Esq. as its Assistant Secretary.
McCabe, Mintz & Co., LLC, the Company's financial advisor, delivered a
fairness opinion to the Company's Board of Directors in connection with the
Homegrown Holdings transactions.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(a)-(b) No financial statements are required to be filed with
this report.
(c) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Annie's Homegrown, Inc.
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(Registrant)
Dated: December 23, 1999 By: /s/ Neil Raiff
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Neil Raiff
Chief Financial Officer
EXHIBITS
EXHIBIT NO. DESCRIPTION
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3.4 Certificate of Amendment of Certificate of Incorporation dated
November 30, 1999
4.1 Certificate of Stock Designation Series A Preferred Stock dated
November 30, 1999
10.53 Investment and Stock Purchase Agreement by and between Homegrown
Holdings Corp. and Annie's Homegrown Inc. dated December 2, 1999.
10.54 Promissory Note in the original principal amount of $1 million
issued to Homegrown Holdings Corp. by Annie's Homegrown Inc. (to be
held in escrow until receipt of loan proceeds).
10.55 Warrant issued to Homegrown Holdings Corp. by Annie's Homegrown Inc.
to purchase shares of the Company's Common Stock (to be held in
escrow until receipt of loan proceeds).
10.56 Escrow Letter Agreement for the Note & Warrant dated December 2,
1999 - Kirkpatrick & Lockhart LLP as Escrow Agent.
10.57 Stock Collar Agreement by and between Ann E. Withey and Homegrown
Holdings Corp. dated December 2, 1999.
10.58 Irrevocable Proxy by and between Ann E. Withey and Homegrown
Holdings Corp. dated December 2, 1999.
10.59 Amendment to Stock Purchase and Loan Agreement by and between
Annie's Homegrown Inc. and Ann E. Withey.
10.60 Third Amendment to Stock Purchase and Loan Agreement by and between
Annie's Homegrown Inc. and Ann E. Withey.
10.61 Stock Collar Agreement by and between Andrew M. Martin and Homegrown
Holdings Corp. dated December 2, 1999.
10.62 Irrevocable Proxy by and between Andrew M. Martin and Homegrown
Holdings Corp. dated December 2, 1999.
10.63 Separation Agreement by and between Andrew M. Martin and Annie's
Homegrown Inc. dated December 2, 1999.
10.64 Omnibus Secured Promissory Note issued to Annie's Homegrown Inc. by
Andrew M. Martin dated December 2, 1999.
10.65 Amendment to Stock Purchase and Loan Agreement by and between
Annie's Homegrown Inc. and Andrew M. Martin.
10.66 Third Amendment to Stock Purchase and Loan Agreement by and between
Annie's Homegrown Inc. and Andrew M. Martin.
10.67 Security Agreement and Collateral Assignment issued to Annie's
Homegrown Inc. by Andrew M. Martin dated December 2, 1999.
10.68 Separation Agreement by and between Deborah Churchill Luster and
Annie's Homegrown Inc. dated December 2, 1999.
10.69 Omnibus Secured Promissory Note issued to Annie's Homegrown Inc. by
Deborah Churchill Luster dated December 2, 1999.
10.70 Pledge Agreement by and between Deborah Churchill Luster and Annie's
Homegrown Inc. dated December 2, 1999.
10.71 Amendment to Stock Purchase and Loan Agreement by and between
Annie's Homegrown Inc. and Deborah Luster.
10.72 Third Amendment to Stock Purchase and Loan Agreement by and between
Annie's Homegrown Inc. and Deborah Luster.
10.73 Agreement by and between Annie's Homegrown Inc. and McCabe, Mintz &
Company, L.L.C.
10.74 License Termination Agreement by and between Annie's Homegrown Inc.
and Aha! Ink Publishing, LLC dated as of August 20, 1998.
10.75 Second Amendment to Employment Agreement by and between Paul B.
Nardone and Annie's Homegrown Inc. dated December 2, 1999.
EXHIBIT 3.4
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
ANNIE'S HOMEGROWN, INC.
Annie's Homegrown, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, does hereby
certify that:
FIRST: That the Board of Directors of Annie's Homegrown, Inc., by a
unanimous vote of its members at a duly called Board of Directors Meeting on
July 7, 1999, adopted resolutions setting forth a proposed Amendment to the
Certificate of Incorporation of said corporation, declaring said Amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof.
SECOND: That, in accordance with Section 228 of General Corporation Law
of the State of Delaware, the holders of all the issued and outstanding capital
stock of the Corporation approved said amendment at a Special Meeting in Lieu of
an Annual Meeting for Stockholders on November 30, 1999.
VOTED: that the Certificate of Incorporation of this Corporation be
amended by striking Article 4 in its entirety and replacing it with the
following:
"4. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is Eleven Million (11,000,000)
shares, consisting of Ten Million (10,000,000) shares of Common Stock, $.001 par
value per share (the "Common Stock"), and One Million (1,000,000) shares of
undesignated Preferred Stock, $2.00 par value per share (the "Preferred Stock").
The Board of Directors of the Corporation is hereby expressly vested
with the power to issue one or more series of Preferred Stock of the Corporation
from time to time and by resolution to designate the powers, designations,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions of any class of stock or any
series of such class of stock to the extent not inconsistent with the provisions
of this FOURTH Article or in conflict with the powers, designations, preferences
or relative, participating, optional or other special rights, or the
qualifications, limitations or restrictions of any other series fixed by
resolution of the Board of Directors and set forth in a certificate of
designation filed with the Secretary of State of Delaware."
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THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, Annie's Homegrown, Inc. has caused its corporate
seal to be hereunto affixed and this certificate to be signed by its President
and its Secretary, this ______ day of November, 1999.
ANNIE'S HOMEGROWN, INC.
[SEAL] By: /s/ Paul B. Nardone
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President
/s/ Stephen L. Palmer
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Assistant Secretary
EXHIBIT 4.1
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CERTIFICATE OF STOCK DESIGNATION
SERIES A PREFERRED STOCK
ANNIE'S HOMEGROWN, INC.
ANNIE'S HOMEGROWN, INC., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the
"Corporation") does hereby certify:
FIRST: That, by meeting of the Board of Directors on November 30,
1999, the Board of Directors of the Corporation adopted the following
resolutions setting forth the designations, powers, preferences and
rights of the Series A Convertible Preferred Stock of said Corporation:
RESOLVED: That one million shares of the Annie's Homegrown, Inc.
Preferred Stock, par value $2.00, be and hereby are
designated "Series A Convertible Preferred Stock."
RESOLVED: That, pursuant to the authority granted to and vested in
the Board of Directors of the Corporation by the provisions
of the Corporation's Certificate of Incorporation, as
amended, the Board of Directors hereby designates the
rights, powers, qualifications and preferences of such
Series A Convertible Preferred Stock, which shall be as set
forth on EXHIBIT A annexed hereto; and that the officers of
the Corporation be, and hereby are, authorized and directed
to execute and file this Certificate of Designation with
the Secretary of State of the State of Delaware.
SECOND: That attached hereto as EXHIBIT A is the Certificate of
Designation setting forth the amended and restated designations,
powers, preferences and rights of the Series A Convertible Preferred
Stock so approved.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate of Stock Designation to be executed by
Paul B. Nardone, its Chief Operating Officer and Stephen L. Palmer, Esq., its
Assistant Secretary, this 30th day of November, 1999.
ANNIE'S HOMEGROWN, INC.
[SEAL]
By: /s/ Paul B. Nardone
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Paul B. Nardone,
President and COO
/s/ Stephen L. Palmer, Esq.
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Stephen L. Palmer, Esq., Assistant Secretary
<PAGE>
EXHIBIT A
The Series A Preferred Stock shall have the following rights, terms and
privileges:
1. DIVIDENDS. The holders of the Series A Preferred Stock shall be
entitled to receive, out of funds legally available therefor, dividends at the
same rate as dividends are paid with respect to the Common Stock (treating each
share of Series A Preferred Stock as being equal to the number of shares of
Common Stock into which each such share of Series A Preferred Stock could be
converted pursuant to the provisions of Section 4 hereof, with such number
determined as of the record date for the determination of holders of Common
Stock entitled to receive such dividend), which amount shall be subject to
equitable adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event with respect to the Common Stock.
2. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) TREATMENT AT LIQUIDATION, DISSOLUTION OR WINDING UP.
(I) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary, before any distribution may be made with respect
to the Common Stock, the holders of each share of Series A
Preferred Stock shall be entitled to be paid out of the assets
of the Corporation available for distribution to holders of
the Corporation's capital stock of all classes, whether such
assets are capital, surplus or earnings, an amount equal to
(X) par value; plus (Y) an amount equal to 10% of par value
per annum from the date of issuance of such share up to and
including the date payment shall be tendered to the holders of
the Series A Preferred Stock with respect to such liquidation,
dissolution or winding up (which amount shall be subject to
equitable adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event); plus
(Z) all declared and unpaid dividends thereon since the date
of issue up to and including the date payment shall be
tendered to the holders of the Series A Preferred Stock with
respect to such liquidation, dissolution or winding up (the
"Series A Liquidation Amount"). If, upon any liquidation,
dissolution or winding up of the Corporation, the amounts
payable with respect to the Series A Preferred Stock are not
paid in full, the holders of the Series A Preferred Stock
shall share ratably (amongst themselves) in any distribution
of assets in proportion to the full respective preferential
amounts to which they are otherwise entitled to receive.
(II) After the payment of the Series A Liquidation
Amount shall have been made in full to the holders of the
Series A Preferred Stock or funds necessary for such payment
shall have been set aside by the Corporation in trust for the
account of such holders so as to be available for such
payments, the holders of the Series A Preferred Stock shall be
entitled to no further participation in the distribution of
the assets of the Corporation, and the remaining assets of the
Corporation legally available
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for distribution to its stockholders shall be distributed
among the holders of other classes of securities of the
Corporation in accordance with their respective terms.
(B) MERGERS, CONSOLIDATIONS AND SALES OF ASSETS. Upon the
occurrence of a consolidation, merger or acquisition of the Corporation
(except (I) a merger or consolidation into or with a wholly-owned
subsidiary of the Corporation with requisite stockholder approval or
(ii) in which the beneficial owners of the Corporation's capital stock
immediately prior to such transaction continue to hold directly or
indirectly not less than a majority of the voting power in the
resulting entity) or a sale of all or substantially all of the assets
of the Corporation, a liquidation, dissolution or winding up of the
affairs of the Corporation within the meaning of this Section 2 shall
be deemed to have occurred and the holders of Series A Preferred Stock
shall be paid the Series A Liquidation Amount for their shares in
accordance with Section 2(a).
3. VOTING POWER. Except as otherwise required by law, each holder of
Series A Preferred Stock shall be entitled one vote per share of Series A
Preferred Stock held by him, her or it (which amount shall be subject to
equitable adjustment whenever there shall occur a stock split, combination,
reclassification or other similar event). Except as otherwise expressly provided
herein or as required by law, the holders of Series A Preferred Stock and Common
Stock shall vote together as a single class on all matters.
4. CONVERSION. The holders of the Series A Preferred Stock shall have
the following conversion rights:
(A) VOLUNTARY CONVERSION. Each holder of shares of Series A
Preferred Stock may elect at any time to convert such holder's share(s)
of Series A Preferred Stock then held by such holder into an equal
number of shares of Common Stock (which amount shall be subject to
equitable adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event).
(B) CONVERSION PROCEDURES. Any holder of Series A Preferred
Stock desiring to convert such shares into shares of Common Stock shall
surrender the certificate or certificates representing the Series A
Preferred Stock being converted, duly assigned or endorsed for transfer
to the Corporation (or accompanied by duly executed stock powers
relating thereto), at the principal executive office of the Corporation
or the offices of the transfer agent for the Series A Preferred Stock
or such office or offices in the continental United States of an agent
for conversion as may from time to time be designated by notice to the
holders of the Series A Preferred Stock by the Corporation, accompanied
by written notice of conversion. Such notice of conversion shall
specify (I) the number of shares of Series A Preferred Stock to be
converted, (II) the name or names in which such holder wishes the
certificate or certificates for Common Stock and for any Series A
Preferred Stock not to be so converted to be issued and (III) the
address to which such holder wishes delivery to be made of such new
certificates to be issued upon such conversion. Upon surrender of a
certificate
<PAGE>
representing Series A Preferred Stock for conversion, the Corporation
shall issue and send by hand delivery, by courier or by first class
mail (postage prepaid) to the holder thereof or to such holder's
designee, at the address designated by such holder, a certificate or
certificates for the number of shares of Common Stock to which such
holder shall be entitled upon conversion. In the event that there shall
have been surrendered a certificate or certificates representing Series
A Preferred Stock, only part of which are to be converted, the
Corporation shall issue and send to such holder or such holder's
designee, in the manner set forth in the preceding sentence, a new
certificate or certificates representing the number of shares of Series
A Preferred Stock which shall not have been converted.
(C) EFFECTIVE DATE OF CONVERSION. The issuance by the
Corporation of shares of Common Stock upon a conversion of Series A
Preferred Stock into shares of Common Stock made at the option of the
holder thereof pursuant to Section 4(a) hereof shall be effective as of
the close of business on the date on which the certificate or
certificates for the Series A Preferred Stock to be converted have been
surrendered for conversion pursuant to Section 4(b) hereof.
(D) RESERVATION OF COMMON STOCK. The Corporation shall at all
times reserve and keep available out of its authorized and unissued
Common Stock, solely for issuance upon the conversion of Series A
Preferred Stock as herein provided, free from any preemptive rights or
other obligations, such number of shares of Common Stock as shall from
time to time be issuable upon the conversion of all the Series A
Preferred Stock then outstanding provided that the shares of Common
Stock so reserved shall not be reduced or affected in any manner
whatsoever so long as any shares of Series A Preferred Stock are
outstanding.
5. NO IMPAIRMENT. The Corporation will not, by amendment of this
Certificate of Designation, its Certificate of Incorporation, as amended, or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all of the provisions herein and in the taking of
all such action as may be necessary or appropriate in order to protect the
rights of the holders of the Series A Preferred Stock against impairment.
EXHIBIT 10.53
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INVESTMENT AND STOCK PURCHASE AGREEMENT
HOMEGROWN HOLDINGS CORP.
A DELAWARE CORPORATION
AND
ANNIE'S HOMEGROWN, INC.
A DELAWARE CORPORATION
RE:
$1,000,000 9% SUBORDINATED NOTE
AND
SERIES A CONVERTIBLE PREFERRED STOCK WITH AGGREGATE PAR VALUE OF
$2,000,000
AND
WARRANT TO PURCHASE SHARES OF COMMON STOCK
DATED AS OF
DECEMBER 2, 1999
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<PAGE>
This Investment and Stock Purchase Agreement (the "Agreement") is
entered into this 2nd day of December, 1999, by and between, HOMEGROWN HOLDINGS
CORP., a Delaware corporation, ("HOLDINGS") and ANNIE'S HOMEGROWN, INC., a
Delaware Corporation ("ANNIE'S").
NOW THEREFORE the parties hereto agree as follows:
SECTION 1. CONSIDERATION.
SECTION 1.1. TERMS. In consideration of HOLDINGS making a cash
investment (the "Investment") in a total amount of $3,000,000 under the terms
and conditions set forth in this Agreement, ANNIE'S shall issue, convey,
transfer, assign and deliver to HOLDINGS (i) its unsecured subordinated
promissory note in the principal amount of $1,000,000, bearing interest at 9%
per annum, providing for interest only payments for five years with principal
then being due (the "Note"), (ii) preferred stock having an aggregate par value
of $2,000,000 redeemable at par with a liquidation preference of par plus 10%
per annum and having the voting rights of 1,000,000 shares of Common Stock of
ANNIE'S (the "Series A Convertible Preferred Stock"), and (iii) a Warrant to
purchase 1,500,000 shares of the Common Stock of ANNIE'S, par value $.001 (the
"Common Stock").
SECTION 1.2. THE NOTE. The Note shall be in an aggregate principal
amount of $1,000,000 due on the fifth anniversary of its issuance, and shall be
(i) dated the date of issue, (ii) expressed to bear interest prior to maturity
at the rate of 9% per annum, payable semi-annually on the last day of June and
December in each year commencing on the first of such dates after the date of
issuance thereof, and at maturity, and to bear interest on any overdue
installment of interest or payment of principal in the amount of 1% per month
for each month that payment is so overdue, until paid, (iii) expressed to mature
on the fifth anniversary of its issue, (iv) subordinate to any payments due to
current or future bank or institutional lenders of ANNIE'S and (v) otherwise
substantially in the form attached hereto as Exhibit "A". Interest on the Note
shall be computed on the basis of a 360-day year of twelve 30-day months.
ANNIE'S shall have the privilege of prepaying the outstanding Note, in
whole or in part without penalty. Prepayment on the Note shall be made by the
payment of the aggregate principal amount remaining unpaid on the Note and
accrued interest thereon to the date of such prepayment. Any prepayment of less
than the balance of principal and accrued interest on the Note shall be applied
to the payment in full of the Note.
SECTION 1.3. THE WARRANT. At the time of the issuance of the Note,
ANNIE'S shall issue, convey, transfer, assign and deliver to HOLDINGS, a Warrant
substantially in the form attached hereto as Exhibit "B" to purchase the Common
Stock (the "Warrant").
The Warrant shall have a term of five years and shall have an exercise
price equal to $2.00 per share of Common Stock until the third anniversary of
the Closing (as
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defined in ss.2); $2.50 during the six months thereafter; $3.00 from then to the
fourth anniversary of the Closing; $3.50 for six months thereafter; and $4.00
per share from four and one-half years after the Closing until expiration of the
Warrant.
In the event the net sales of ANNIE'S for the fiscal year ended March
31, 2000 do not equal or exceed $9,500,000 or the "adjusted net income" of
ANNIE'S for that fiscal year is not positive, the exercise price of the Warrant
shall be reduced by $.50 per share from each of the prices set forth above. "Net
Sale" means the gross sales price arising from the sales by ANNIE'S of goods
during the fiscal year ended March 31, 2000 (recorded in accordance with
generally accepted accounting principles) net of returns or disputed
transactions. "Adjusted net income" is defined on Exhibit "C" hereto.
The rights, powers and terms of the Common Stock will be provided for
in ANNIE'S Certificate of Incorporation and Certificate of Designation in effect
on the Closing Date, and as otherwise provided by the Delaware General
Corporation Law.
SECTION 1.4. THE SERIES A CONVERTIBLE PREFERRED STOCK. The Series A
Convertible Preferred Stock shall have an aggregate par value of $2,000,000
redeemable at and with a liquidation preference of par plus 10% per annum and
having the voting rights of 1,000,000 shares of common stock of ANNIE'S. The
Series A Convertible Preferred Stock shall be convertible at any time in whole
or in part into common stock at $2.00 of par value of preferred stock per common
share. Upon such conversion, the converted share of Series A Convertible
Preferred Stock shall be deemed cancelled together with any liquidation
preference accrued therein. The details of the conversion, redemption and
regulation rights of the Series A Convertible Preferred Stock are set forth on
the Certificate of Designation, attached as Exhibit "D" hereto.
On or before the Closing Date, ANNIE'S will have adopted and filed with
the Secretary of State of Delaware, as necessary, an amended and restated
Certificate of Incorporation and a Certificate of Designation to create and
authorize issuance of the Series A Convertible Preferred Stock with the rights,
privileges and preferences set forth in this Agreement and will have taken all
necessary steps for authorizing the issuance of the Series A Convertible
Preferred Stock.
SECTION 2. CLOSING.
SECTION 2.1. THE CLOSING DATE. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, ANNIE'S agrees to issue, convey, transfer, assign and deliver to HOLDINGS
upon execution of this Agreement (the "Closing Date"), in return for $2,000,000
of the Investment set forth in ss.1.1, the Series A Convertible Preferred Stock
described in ss.1.4. On the Closing DatE, ANNIE'S also agrees to execute and
place in escrow with Kirkpatrick & Lockhart LLP, counsel to ANNIE'S, the Note
and Warrant to be held according to an Escrow Agreement by and among HOLDINGS,
ANNIE'S and Kirkpatrick & Lockhart LLP as Escrow Agent (the "Escrow Agreement").
Pursuant to the terms of the Escrow Agreement, the Note and Warrant shall be
released to the escrow agent (the "Pledge
3
<PAGE>
Escrow Agent") identified in the Pledge and Escrow Agreement (the "Pledge
Agreement"), dated the date hereof, between HOLDINGS, Ann E. Withey and Andrew
M. Martin, on behalf of HOLDINGS and subject to the Pledge Agreement, upon the
receipt by ANNIE'S of the remaining $1,000,000 of the Investment, which HOLDINGS
shall be obligated to deliver to ANNIE'S on or before April 30, 2000, unless
ANNIE'S is then insolvent or bankrupt. The parties agree that they shall take
all actions, including the delivery of documents, necessary in order to
facilitate completion of all of the transactions contemplated by this Agreement.
The closing of the transactions under this Agreement (the "Closing")
shall take place at the offices of Kirkpatrick & Lockhart LLP, located at 75
State Street, Boston, Massachusetts, on the Closing Date. The Closing shall be
deemed to have been effective as of 11:59 p.m. on the Closing Date.
SECTION 2.2. DELIVERY. At the Closing, ANNIES shall deliver to the
Pledge Escrow Agent, on behalf of HOLDINGS and subject to the Pledge Agreement,
the Series A Convertible Preferred Stock against the payment thereof by HOLDINGS
of $2,000,000 of the Investment in Federal Reserve, certified check or other
funds current and immediately available and wired to ANNIE'S bank account at
Eastern Bank, 445 Main Street, Wakefield, Massachusetts 01880, ABA Number
011301798, Account Number 200268886. ANNIE'S shall also deliver to Kirkpatrick &
Lockhart LLP, as Escrow Agent, the Note and Warrant, to be held by the Escrow
Agent pursuant to the terms of the Escrow Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES BY ANNIE'S.
ANNIE'S hereby represents and warrants to HOLDINGS, as of the Closing
Date, as follows:
SECTION 3.1. ORGANIZATION, STANDING AND POWER. ANNIE'S is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. ANNIE'S has all necessary power and authority to own, use and
transfer its properties and assets and to transact the business now being
conducted. ANNIE'S has furnished to HOLDINGS copies of its Certificate of
Incorporation, Certificate of Designation, and Bylaws which copies are true,
correct and complete. The copies of the Certificate of Incorporation and Bylaws
contain all amendments through the date of this Agreement. The copies of the
Minute Books contain a complete record of all meetings of directors and
shareholders and all actions by written consent without a meeting of directors
and shareholders for the two years ending on the Closing and reflect all
material transactions referred to in such minutes accurately in all material
respects.
SECTION 3.2. AUTHORITY FOR TRANSACTION. ANNIE'S execution and delivery
of this Agreement, its compliance with the provisions hereof and the
consummation of all of the transactions contemplated hereby have all been duly
and validly authorized by all necessary corporate action on the part of ANNIE'S,
and this Agreement is valid and
4
<PAGE>
binding upon ANNIE'S in accordance with its terms. The Series A Convertible
Preferred Stock when issued against payment by Holdings, will be validly issued,
fully paid and nonassessable, and will be free of any liens or encumbrances and
issued in compliance with all applicable state and federal laws concerning the
issuance of securities.
SECTION 3.3. FILINGS. On or before the Closing Date (as defined in
ss.2.1) ANNIE'S will, if necessary, have duly adopted and filed with the
Secretary of the State of Delaware an amended and restated Certificate of
Incorporation and Certificate of Designation to create and authorize the Series
A Convertible Preferred Stock with the rights, privileges and preferences set
forth herein and will have taken all necessary corporate action authorizing the
sale and issuance of the Series A Convertible Preferred Stock.
SECTION 3.4. NO CONFLICT. Other than as identified on the Disclosure
Schedule, neither the execution and delivery of this Agreement by ANNIE'S nor
compliance by ANNIE'S with any of the provisions hereof, nor the consummation of
the transactions contemplated hereby, will:
(a) conflict with or result in a breach of any provision of any
agreement between ANNIE'S and any of its shareholders or, to
ANNIE'S knowledge, between any of its shareholders;
(b) result in a default, or give rise to any right of termination,
cancellation or acceleration, under any term, condition or
provision of any contract, encumbrance or other instrument or
obligation to which ANNIE'S, is a party or by which it or any
of its respective assets may be bound; or
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to ANNIE'S, or any of its respective
properties or assets.
Other than as identified on the Disclosure Schedule, no consent, waiver or
approval by, notice to or filing with any person is required in connection with
the execution and delivery of this Agreement by ANNIE'S, compliance by ANNIE'S
with any of the provisions hereof or the consummation of the transactions
contemplated hereby.
SECTION 3.5. SUBSIDIARIES. ANNIES does not own or control, directly or
indirectly, any interest or investment in any other entity.
SECTION 3.6. CAPITALIZATION. The authorized capital stock of ANNIE'S
(as defined in ss.2), consists of : (a) 10,000,000 shares of Common Stock, par
value $.001, of which 4,709,768 are outstanding, and (b) 1,000,000 shares of
Preferred Stock, par value $2.00, all of which is designated Series A, and none
of which is issued immediately prior to the Closing. All issued and outstanding
shares have been duly authorized and validly issued, and are fully paid and
nonassessable.
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SECTION 3.7. FINANCIAL STATEMENTS. ANNIE'S has heretofore delivered to
HOLDINGS true, correct and complete copies of its balance sheets, income
statements, statements of shareholders' equity and statements of cash flows for
the fiscal year ending March 31, 1999 (which were audited) and for the quarters
ending June 30 and September 30, 1999 (which are unaudited) (together the
"Financial Statements.) The Financial Statements are accurate and complete in
all material respects, and are in accordance with the books of account and
records of ANNIE'S (which in turn are accurate and complete in all material
respects.) The Financial Statements present fairly and accurately ANNIE'S
financial position at the dates thereof and the results of ANNIE'S operations,
changes in ANNIE'S financial position and other information included therein for
the periods or as at the dates therein set forth. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
("GAAP"), except that, in the case of the unaudited financials, certain notes
and similar presentation items are omitted. The Financial Statements show all
assets and liabilities of any kind or nature, direct or indirect, absolute or
contingent, existing as of the dates indicated, insofar as such items are
required by GAAP to be included on such Financial Statements. Except as set
forth in the Financial Statements or on the Disclosure Schedule, ANNIE'S has no
liabilities, contingent or otherwise, other than (a) liabilities incurred in the
ordinary course of business and (b) obligations under contracts and commitments
incurred in the ordinary course of business and not required under GAAP to be
reflected in the Financial Statements, which neither individually or in the
aggregate are material to ANNIE'S financial condition or operating results.
Except as disclosed in the Financial Statements or on the Disclosure Schedule,
ANNIE'S is not a guarantor or indemnitor of any indebtedness of any person or
entity. ANNIE'S maintains and will continue to maintain a standard system of
accounting established and administered in accordance with GAAP.
SECTION 3.8. NO CHANGES. Since March 31, 1999, except as described in
the Disclosure Schedule, there has not been:
(a) Any material adverse change in the condition (financial or
otherwise), of the assets, liabilities or business operations of ANNIE'S, except
changes in the ordinary course of business which have not been, in the
aggregate, materially adverse;
(b) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting ANNIE'S assets, properties,
financial condition, operating results, prospects, or business (as such business
is presently conducted and is proposed to be conducted);
(c) Any sale, lease or other transfer of any of ANNIE'S assets, other
than in the ordinary course of business for fair and adequate consideration in
money or money's worth;
(d) Any sale, assignment or transfer of any patent, trademark, trade
name, copyright or other intangible asset owned by ANNIE'S;
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(e) Any waiver or compromise by ANNIE'S of a valuable right or of a
material debt owed to it;
(f) Any satisfaction or discharge of any lien, claim, or encumbrance or
payment obligation by ANNIE'S, except in the ordinary course of business and
which is not material to ANNIE'S assets, properties, financial condition,
operating results or business (as such business is presently conducted and is
proposed to be conducted);
(g) Any change or amendment to a material contract or arrangement to
which ANNIE'S or any of its assets or properties is subject (except in the
ordinary course of business);
(h) Any material change in any compensation arrangement or agreement in
respect of any of ANNIE'S officers, agents or employees;
(i) Any declaration, setting aside, payment or other distribution in
respect of any of ANNIE'S capital stock, or any direct or indirect redemption,
purchase or other acquisition of any of such stock by ANNIE'S;
(h) Any labor trouble or other event or condition, known to ANNIE'S
after reasonable investigation, materially and adversely affecting ANNIE'S
business or plans;
(i) Any amendment, cancellation or termination of any contract, license
or other instrument material to ANNIE'S;
(j) Any failure to pay when due any material obligation of ANNIE'S,
except in the ordinary course of business or where such failure would not have
an effect on ANNIE'S that is materially adverse to its business operations or
financial condition, or on the ability of ANNIE'S to consummate the transaction
contemplated hereby;
(k) Any damage, destruction or loss not covered by insurance and
materially adversely affecting the business operations or assets of ANNIE'S;
(l) Any change in accounting methods or practices by ANNIE'S which
would have a material adverse effect on the Financial Statements;
(m) Any material revaluation other than in the ordinary course by
ANNIE'S of any of its respective assets, including without limitation, writing
off notes or accounts receivable;
(n) Other than as set forth in this Agreement, any issuance or the
commitment of ANNIE'S to issue any share of stock or other equities or
obligations or securities convertible into or exchangeable for shares of stock
or other equity securities;
(o) Any indebtedness incurred by ANNIE'S for borrowed money or any
commitment to borrow money entered into by ANNIE'S or any loans made or agreed
to be made by ANNIES;
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(p) Any agreement by ANNIE'S to do any of the foregoing;
(q) Any other event or condition of any character which materially
adversely affects ANNIE'S assets, properties, financial condition, operating
results, or business (as such business is presently conducted and as it is
proposed to be conducted).
SECTION 3.9. COMPLIANCE WITH LAWS. ANNIE'S and its business are in
compliance in all material respects with applicable laws, rules, ordinances, use
permits, orders and regulations, and to ANNIE'S best knowledge, there is no
basis for any action, suit or proceeding arising out of or in connection
therewith. ANNIE'S has not received any notice of any violation of any such law,
rule, ordinance, order or regulation, and ANNIE'S is not subject to any
settlement agreement or consent decree with continuing obligations or
restrictions on ANNIE'S.
SECTION 3.10. NO UNDISCLOSED LIABILITIES. Except as explicitly
disclosed on the Disclosure Schedule or in the Financial Statements, ANNIE'S
does not have, nor are any of its assets or properties subject to, any debt,
liability, obligation, contract or commitment of any kind or nature, direct or
indirect, whether accrued, absolute, contingent or otherwise. To ANNIE'S
knowledge, there are no facts that could serve as the basis for any material
debt, liability, obligation or commitment of ANNIE'S not so disclosed.
SECTION 3.11. TAX RETURNS, ELECTIONS AND PAYMENTS. ANNIE'S has filed
all tax returns and reports as required by law. These returns and reports are
true and correct in all material respects. ANNIE'S has paid all taxes and other
assessments due, except those contested by it in good faith which are disclosed
in this Agreement on the Disclosure Schedule. The provision for ANNIE'S taxes is
adequate for taxes due or accrued as of the date of the Financial Statements.
ANNIE'S has not elected to be treated as a Subchapter S corporation, nor has it
made any other elections under the Internal Revenue Code of 1986, as Amended
("Code") (other than elections which relate solely to methods of accounting,
depreciation or amortization), which would have a material adverse affect on
ANNIE'S, its financial condition, its business as presently conducted or
proposed to be conducted, or any of its material properties or material assets.
Other than those identified on the Disclosure Schedule, ANNIE'S has never had a
tax deficiency or tax audit and ANNIE'S has made all required withholdings from
the income paid to its employees.
SECTION 3.12. LABOR RELATIONS AND EMPLOYMENT ISSUES.
(a) ANNIE'S has not entered into any collective bargaining agreement or
similar contract with any employee, union, labor organization or other employee
representative or group of employees and, to ANNIE'S best knowledge, no such
organization or person has made or is making any attempt to organize or
represent employees of ANNIE'S.
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(b) Without limiting the generality of any other warranty, to knowledge
of ANNIE'S management, ANNIE'S is in full compliance with all applicable laws,
rules, regulations, standards and contracts relating to employment, including
those relating to wages, hours, working condition, hiring, promotion,
occupational health and safety (including those dealing with employee handling
or use of or exposure to hazardous or toxic substances and the training of
employees with respect to such substances), and ANNIE'S has not received any
notice of any violation of any such law, rule, regulation, standard or contract.
(c) Other than as identified on the Disclosure Schedule, no current or
former employee of ANNIE'S has any claim against ANNIE'S (or any of its
officers, employees or agents under any law, rule, regulation, standard or
contract on account of or for overtime pay for the current payroll period),
wages or salary for any period other than the current payroll period, incentive
or deferred compensation, vacation, holiday or other time off or pay in lieu
thereof (other than time off or pay in lieu thereof earned in respect of the
current year), or any violation of any law, rule, regulation, standard or
contract relating to the payment of wages, fringe benefits, wage supplements or
hours of work.
SECTION 3.13. TITLE TO PROPERTIES AND ASSETS; LIENS AND ENCUMBRANCES.
ANNIE'S has good and marketable title to its properties and assets, and has good
title to all its leasehold estates, in each case unless otherwise disclosed in
the Financial Statements subject to no mortgage, pledge, lien, lease, security
interest, encumbrance, or charge, other than tax, materialmen's, or like liens
and encumbrances or obligations not yet due and payable, which do not materially
detract from the value of the affected property or materially impair ANNIE'S
operations. ANNIE'S properties and assets are in good condition and repair in
all material respects.
SECTION 3.14. PATENTS, COPYRIGHTS AND TRADEMARKS. Other than as
identified on the Disclosure Schedule, ANNIE'S has exclusive right, title and
interest in and to all intangible property, including all patents, trademarks,
service marks, tradenames, copyrights, trade secrets, and other proprietary
rights (collectively "Proprietary Rights"), or adequate licenses, rights,
purchase options, assignments, or releases for the Proprietary Rights
(collectively the "Proprietary Rights Agreements") necessary for its business as
now conducted and as currently proposed to be conducted. ANNIE'S has not
received any notice or claim of, nor does it have any knowledge of, any
infringement or misappropriation by ANNIE'S of the asserted rights of others.
Assuming the due authorization, execution and delivery of the Proprietary Rights
Agreements by their respective parties, the Proprietary Rights Agreements
constitute valid, legal and binding obligations of the respective parties and
are enforceable in accordance with their terms, except as limited by bankruptcy
and other laws of general application affecting the rights and remedies of
creditors generally and except insofar as the availability of equitable remedies
may be limited.
To ANNIE'S knowledge, ANNIE'S has taken or is taking all steps
reasonably necessary or appropriate to establish and maintain its ownership of
the Proprietary Rights and is not aware of any infringement or misappropriation
by others of any of its
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Proprietary Rights. ANNIE'S shall provide HOLDINGS with a true and correct list
of all: (a) Proprietary Rights; (b) Proprietary Rights Agreements; (c)
registrations and applications for ANNIE'S copyrights and trademarks; (d) the
trademarks under which, and the countries in which, ANNIE'S sells products; (e)
all availability searches conducted for ANNIE'S trademarks; and (f) all Office
Actions issued by the Untied States Patent and Trademark Office and any
equivalent office outside the United States relating to ANNIE'S trademarks.
SECTION 3.15. COMPLIANCE WITH OTHER INSTRUMENTS. ANNIE'S is not in
violation of any provision of its Certificate of Incorporation or Bylaws, as
amended, and in effect on and as of the Closing Date, and is not in breach of or
in default under, in any material respect, any contract, agreement or instrument
to which it is a party, or to which it or its property is subject, or any
judgment, decree, order, statue, rule or regulation to which ANNIE'S is subject
(collectively the "Instruments"), a breach or violation of which would have a
material adverse affect on ANNIE'S condition (financial or otherwise) or
operations. No event has occurred which with the passage of time or the giving
of notice, or both, would constitute a breach or violation under any of the
Instruments which would have a material affect on ANNIE'S condition (financial
or otherwise) or operations. The execution, delivery and performance of and
compliance with this Agreement, will not result in a breach or violation of or
constitute a material default under any of the Instruments, except such
violations, breaches or defaults which singularly or in the aggregate would not
(a) have a material adverse effect on ANNIE'S business, operations, property, or
condition (financial or otherwise); (b) require any consent or waiver (which has
not been obtained) under any of the Instruments, or (c) result in the creation
of a pledge, lien, encumbrance, or charge on any of ANNIE'S properties or assets
under any of the Instruments. To the best of ANNIE'S knowledge, none of its
employees is in violation of any term of any employment contract, patent, or
other proprietary information disclosure agreement or other contract or
agreement relating to the right of any such employee to be employed by ANNIE'S
because of the nature of the business conducted or proposed to be conducted by
ANNIE'S or for any reason, and to ANNIE'S knowledge the continued employment by
ANNIE'S of its present employees will not result in any such violation.
SECTION 3.16. LEGAL PROCEEDINGS, BUSINESS, ETC.
(a) There is no legal, equitable, administrative or arbitration
action, suit, proceeding or known investigation pending or, to
ANNIE'S best knowledge, threatened against or affecting
ANNIE'S, or any of its respective assets which, if adversely
determined, could materially and adversely affect the
business, the operations or properties, or the condition
(financial or otherwise) of ANNIE'S or the business,
operations or properties, or the condition, financial or
otherwise, of ANNIE'S immediately after the Closing Date, or
the ability of ANNIE'S to consummate the transaction
contemplated hereby. There is no judgment, decree, injunction,
rule or order of any court, governmental department,
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commission, agency, instrumentality or arbitrator outstanding
against ANNIE'S and, to ANNIE'S best knowledge, there is no
basis for any action, suit, proceeding or investigation
against ANNIE'S that would have a material adverse effect. No
such action, suit, proceeding, known investigation, judgment,
decree, injunction, rule or order arises out of the employment
of labor, equal employment opportunity, occupational health
and safety, economic stabilization or environmental
protection. ANNIE'S is not in default with respect to any
order, injunction or decree of any court or governmental
department, commission, board or agency, and no such order,
injunction or decree is now in effect which restrains the
operations or the use of the properties belonging to ANNIE'S.
(b) ANNIE'S has no knowledge or belief that (i) there is pending
or threatened any claim or litigation against or affecting the
right of ANNIE'S to produce, manufacture, sell, or use any
product, process, method, substance, part, or other material
presently produced, manufactured, sold, or used or planned to
be produced, manufactured, sold or used by ANNIE'S in
connection with its operations, (ii) there exists, or is
pending or planed, any patent, invention, device, application,
tradename, trademark, servicemark or principle or any statute,
rule, law, regulation, standard, or code that would materially
adversely affect ANNIE'S condition (financial or otherwise) or
operations.
SECTION 3.17. CERTAIN TRANSACTIONS. Except as specifically set forth on
the Disclosure Schedule, there are no loans, leases, customer or supplier
arrangements, or agreements or other transactions between ANNIE'S and any of its
officers, directors, or shareholders, other than transactions made in the
ordinary course of business. To the best of ANNIE'S knowledge (without any
investigation undertaken or implied), except as set forth on the Disclosure
Schedule, none of its officers or directors, or their respective spouses, owns
directly or indirectly, individually or collectively, a material interest in any
entity that is a competitor, customer or supplier of, or has any existing
contractual relationship with ANNIE'S.
SECTION 3.18. ISSUANCE TAXES. All taxes imposed by law on the issuance
or delivery of the shares of ANNIE'S shall have been fully paid, and all laws
imposing such taxes shall have been fully complied with before the Closing Date.
SECTION 3.19. CONSENTS AND APPROVALS. No consent, approval, order,
authorization or registration, qualification, designation, declaration, or
filing with any federal, state, or local governmental authority on ANNIE'S part
is required in connection with the valid execution, delivery and performance of
this Agreement; the issuance of the Series A Convertible Preferred Stock, or the
consummation of any other transaction contemplated by this Agreement, except the
filing of the restated and amended Certificate of Incorporation and the
Certificate of Designation with the Secretary of State of Delaware and
registration and qualification (or filings with respect to exemptions from
qualification) under the federal securities laws and applicable Delaware laws,
which
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qualifications will have been obtained and will be effective on the Closing Date
unless adequate exemptions from such qualifications are then available.
SECTION 3.20. EMPLOYEE BENEFIT PLANS. Except as set forth on the
Disclosure Schedule, ANNIE'S has no "employee benefit plans" as that term is
defined in the Employee Retirement Income Security Act of 1974, as amended, or
any similar plans.
SECTION 3.21. INSURANCE. ANNIE'S has the fire and casualty insurance
policies identified on the Disclosure Schedule. To ANNIE'S best knowledge, such
insurance polices are adequate to protect ANNIE'S and its financial condition
against the risks involved in its business as conducted and proposed to be
conducted.
SECTION 3.22. ENVIRONMENTAL MATTERS. To the best knowledge of ANNIE'S,
ANNIE'S and the premises it occupies are in full compliance with all applicable
environmental laws or regulations, orders and directives of Federal, state or
local governments or other governmental authorities. The term "environmental
laws or regulations" includes regulatory programs involving (1) air emissions,
(2) liquid discharges to streams, ponds, ditches or other surface waters, (3)
liquid discharges to ground, (4) liquid discharges to publicly-owned treatment
works, (5) disposal of solid and/or other hazardous wastes, (6) marking,
maintenance and/or removal of any electrical equipment containing PCBs, (7)
manufacture and/or construction (including renovation) involving asbestos
materials, (8) activities in or adjacent to fresh water wetlands, flood hazard
areas, coastal zone management areas and/or historic preservation areas, (9)
registration, operation, testing and/or removal or replacement of storage tanks
for petroleum products and/or hazardous substances, and (10) emergency, planning
and community right-to-know laws, including submission of hazardous substance
inventory information to Federal, state or local authorities.
SECTION 3.23. CONTRACTS. Except as disclosed on the Disclosure
Schedule, ANNIE'S currently has no existing contract, obligation, plan,
commitment, or other arrangement (written or oral) of any material nature,
including, without limitation, the following:
(a) Employment, bonus, pension, profit sharing, deferred
compensation, stock bonus, retirement, stock option, stock
purchase, phantom stock or similar plans, including agreement
evidencing rights to purchase ANNIE'S securities or any
agreement among shareholders and ANNIE'S.
(b) Loan agreements, notes, indentures, or instruments, relating
to or evidencing indebtedness for borrowed money, or
mortgaging, pledging, or granting or creating a lien, security
interest or other encumbrance on any of ANNIE'S property or
any agreement or instrument evidencing any guaranty by ANNIE'S
of payment or performance by any other person;
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(c) Agreements with dealers, sales, representatives, brokers, or
other distributors, jobbers, advertisers, or sales agencies;
(d) Agreements with any labor union or collective bargaining
organization or other labor agreements;
(e) Material contracts or series of contracts with the same person
for the furnishing or purchase of machinery, equipment, goods
or services, including without limitation agreements with
equipment lessors, processors, and subcontractors and
consultants;
(f) Joint venture contracts, arrangements or other agreements
involving a sharing of profits or expenses;
(g) Agreement limiting ANNIE'S ability to compete in any line of
business in any geographic area or with any person;
(h) Agreements providing for disposition of ANNIE'S business,
assets, or shares, agreements for merger or consolidation, or
letters of intent with respect to any of the forgoing; and
(i) Letters of intent or agreement with respect to the acquisition
of the business, assets, or shares of any other business.
ANNIE'S has complied with all the material provisions of all contracts,
obligations, agreements, plans, arrangements, and commitments set forth on the
Disclosure Schedule, and is not in default in any material respect under any of
them.
SECTION 4. REPRESENTATIONS AND WARRANTIES BY HOLDINGS.
HOLIDINGS hereby represents and warrants to ANNIE'S, as of the date
hereof and as of the Closing Date, as follows:
SECTION 4.1. ORGANIZATION. HOLDINGS is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
HOLDINGS has all necessary power and authority to own, use and transfer its
properties and assets and to transact the business now being conducted. HOLDINGS
is duly qualified as a foreign corporation in the State of Delaware. Its
Employer Identification Number (tax identification number) is [_______________].
HOLDINGS is an "accredited investor" as that term is defined under Rule 501
promulgated under the Securities Act of 1933, as amended.
SECTION 4.2. AUTHORIZATION. HOLDINGS has all necessary corporate power
and authority to enter into this Agreement. Once this Agreement has been duly
executed and delivered by HOLDINGS it will constitute a legal, binding and valid
obligation of
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HOLDINGS, enforceable against HOLDINGS in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditor's rights generally or by equitable principles (whether
considered in an action at law or equity.)
SECTION 4.3. CONSENTS AND APPROVALS. No consent, approval,
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority, or any other person or entity is required to be made or
obtained by HOLDINGS in connection with the execution, delivery and performance
of this Agreement.
SECTION 4.4. NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will result in a violation of or a conflict with any provision of the
Certificate of Incorporation or a breach thereof, or a default under, of any
term or provision of any contract, agreement, indebtedness, lease, commitment,
license, franchise, permit, authorization, or concession to which HOLDINGS is a
party, which breach or default would have a material adverse effect on the
business or financial condition of HOLDINGS or its ability to consummate the
transaction contemplated hereby.
SECTION 4.5. CONSENTS. HOLDINGS acknowledges that it shall have the
responsibility to take all action required to obtain prior to Closing, all
consents, approval and agreements, if any, which may be required to be obtained
by HOLDINGS to consummate the transactions provided for in this Agreement.
SECTION 4.6. FOLLOW-ON GOAL. HOLDINGS confirms its intention and goal
to explore available opportunities to obtain a listing of the common stock of
ANNIE'S on NASDAQ or other exchanges or to undertake a transaction or plan which
would provide to ANNIE'S existing shareholders, especially its public
shareholders, more liquidity for such stock than now exists.
SECTION 5. INVESETMENT REPRESENTATIONS AND RESTRICITONS.
SECTION 5.1. RESTRICTED SECURITIES. HOLDINGS understands that the
securities it is purchasing hereunder (or will acquire upon conversion of the
Series A Preferred Stock or upon exercise of the Warrant) are characterized as
restricted securities under Federal laws because they are being acquired from
ANNIE'S in a transaction not involving a public offering and that under such
laws and applicable regulations the securities may be resold without
registration under Federal securities laws only in certain limited
circumstances. HOLDINGS represents, and in entering into this Agreement ANNIE'S
understands, that HOLDINGS is acquiring the Note, the Warrant and the Series A
Convertible Preferred Stock for the purpose of investment and not with a view to
the distribution thereof, and that HOLDINGS has no present intention of selling,
negotiating or otherwise disposing of the Note, the Warrant or the Series A
Convertible Preferred Stock; it being understood, however, that the disposition
of HOLDINGS' property will at all times be and remain within its control.
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SECTION 5.2. EXEMPT TRANSACTION. The issuance of the Series A
Convertible Preferred Stock as contemplated by this Agreement (and the Common
Stock that would be issued upon conversion of the Series A Preferred Stock or
upon exercise of the Warrant) is exempt from the registration requirements of
the Securities Act 1933 as amended and the registration and qualification
requirements of applicable California securities laws, and neither ANNIE'S nor
anyone acting on its behalf will take any action that would cause the loss of
such exemptions.
SECTION 5.3. NOT FOREIGN INVESTOR. HOLDINGS is not a foreign investor
as defined by the United States Department of Commerce, and therefore HOLDINGS
will not be required to file any Form BE-13 with the Department of Commerce.
SECTION 5.4. LEGENDS. It is further understood by HOLDINGS that the
certificates evidencing the securities and/or shares of stock into which they
are convertible may be endorsed with the following legends (or their substantial
equivalents):
a) FEDERAL LEGEND: THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS
DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED
EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SHARES UNDER THE ACT, (II) IN COMPLIANCE
WITH RULE 144, OR (III) UNDER AN OPINION OF COUNSEL,
SATISFACTORY TO ANNIE'S HOMEGROWN, INC. THAT SUCH REGISTRATION
OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE, OFFER OR
DISTRIBUTION.
(B) OTHER LEGENDS: Any other legends required by applicable state
blue sky laws.
SECTION 6. [INTENTIONALLY OMITTED]
SECTION 7. [INTENTIONALLY OMITTED]
SECTION 8. FURTHER CONVENANTS.
SECTION 8.1. EXPENSES OF THE PARTIES. Except as otherwise expressly
provided in this Agreement, each party shall pay all of its expenses incurred in
connection with the preparation, negotiation, authorization and consummation of
this Agreement and the transactions contemplated hereby, including all fees and
expenses of agents, representatives, legal counsel and accountants.
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SECTION 8.2. [INTENTIONALLY OMITTED].
SECTION 8.3. FURTHER ASSURANCES. Each party shall cooperate with the
other, take such further action, and execute and deliver such further documents,
as may be reasonably requested by any other party in order to carry out the
terms and purposes of this Agreement.
SECTION 8.4. [INTENTIONALLY OMITTED]
SECTION 9. CONDITIONS TO PERFORMANCE OBLIGATIONS.
SECTION 9.1. CONDITIONS TO HOLDINGS' PERFORMANCE OBLIGATIONS. The
obligations of HOLDINGS to complete the transactions provided for herein shall
be subject, at its election, to satisfaction on or before the Closing Date of
each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES: All representations and
warranties of ANNIE'S contained in this Agreement shall be
true and correct in all respects as of the date hereof and as
of the Closing Date as though made on and as of the Closing
Date, and HOLDINGS shall have received a certificate to that
effect, dated the Closing Date, signed by the Chief Operating
Officer and the Chief Financial Officer of ANNIE'S;
(b) PRE-CLOSING OBLIGATIONS: ANNIE'S shall have performed all
obligations required to be performed by it hereunder, the
performance of which has not been waived by HOLDINGS, and
HOLDINGS shall have received a certificate to that effect,
dated the Closing Date, signed by the Chief Operating Officer
and the Chief Financial Officer of ANNIE'S;
(c) DUE AUTHORIZATION: ANNIE'S execution and delivery of this
Agreement, its compliance with the provisions hereof and the
consummation of all of the transactions contemplated hereby
shall have been duly and validly authorized by all necessary
action on the part of ANNIE'S and HOLDINGS shall have received
a duly certified copy of all actions taken by ANNIE'S Board of
Directors effecting the same;
(d) CONSENTS BY ANNIE'S: All required notices, filings, consents,
waivers and approvals shall have been given, made or obtained,
as the case may be, by ANNIE'S, and HOLDINGS shall have
received a true copy of each thereof;
(e) CONSENTS BY HOLDINGS: All notices, filings, consents, waivers
and approvals required to be obtained by HOLDINGS shall have
been given, made or obtained, as the case may be, by HOLDINGS;
16
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(f) NO BAR: There shall not be in effect any judgment, decree or
order of, or position taken by, any court or administrative
body of competent jurisdiction, nor shall there have been any
action, suit, proceeding or known investigation instituted or
threatened, nor shall any law or regulation have been enacted
or any action taken thereunder, which would, in HOLDINGS'
reasonable judgment, restrain or prohibit, make illegal, or
subject HOLDINGS to material damage as a result of, the
consummation of the transactions contemplated hereby;
(g) [INTENTIONALLY OMITTED].
(h) CONSENT OF HOLDERS OF OTHER SECURITIES: On or prior to the
Closing Date, ANNIE'S shall have obtained from the holders of
a majority of the outstanding Common Stock approval of the
Amendment to ANNIE'S Certificate of Incorporation necessary to
create and issue the Series A Convertible Preferred Stock.
(i) SATISFACTORY PROCEEDINGS: All proceedings taken in connection
with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be
satisfactory in form and substance to HOLDINGS, and HOLDINGS
shall have received a copy (executed or certified as may be
appropriate) of all legal documents or proceedings taken in
connection with the consummation of said transactions.
(j) STOCK COLLAR: HOLDINGS shall have entered into binding Stock
Collar agreements covering a minimum of 2,577,691 shares of
Common Stock of ANNIE'S.
(k) OTHER MATTERS: HOLDINGS shall have received such other
instruments and documents as shall have been reasonably
requested by counsel to HOLDINGS on or before the Closing
Date.
(l) IRREVOCABLE PROXIES. HOLDINGS shall have received irrevocable
proxies on a minimum of 2,577,691 shares of Common Stock of
ANNIE'S.
SECTION 9.2. CONDITIONS TO THE OBLIGATIONS OF ANNIE'S. The obligations
of ANNIE'S to complete the transactions provided for herein shall be subject, at
its election, to satisfaction on or before the Closing Date of each of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES: All representations and
warranties of HOLDINGS contained in this Agreement shall be
true and correct in all respects as of the date hereof and as
of the Closing Date as though made on and as of the Closing
Date (except as may be otherwise provided in this Agreement),
and ANNIE'S shall have received a certificate to that
17
<PAGE>
effect, dated the Closing Date, signed by the chief executive
officer and the chief financial officer of HOLDINGS;
(b) PRE-CLOSING OBLIGATIONS: HOLDINGS shall have performed all
obligations required to be performed by it hereunder, the
performance of which has not been waived by ANNIE'S, and
ANNIE'S shall have received a certificate to that effect,
dated the Closing Date, signed by the chief executive officer
and the chief financial officer of HOLDINGS;
(c) DUE AUTHORIZATION: HOLDINGS execution and delivery of this
Agreement, its compliance with the provisions hereof and the
consummation of all of the transactions contemplated hereby
shall have been duly and validly authorized by all necessary
action on the part of HOLDINGS, and ANNIE'S shall have
received a duly certified copy of all actions taken by
HOLDINGS chief executive officer and the chief financial
officer effecting the same;
(d) CONSENTS BY ANNIE'S: All notices, filings, consents, waivers
and approvals required to be obtained by ANNIE'S shall have
been given, made or obtained, as the case may be, by ANNIE'S;
(e) CONSENTS BY HOLDINGS: All notices, filings, consents, waivers
and approvals required to be obtained shall have been given,
made or obtained, as the case may be, by HOLDINGS, and ANNIE'S
shall have received a true copy of each thereof;
(f) NO BAR: There shall not be in effect any judgment, decree or
order of, or position taken by, any court or administrative
body of competent jurisdiction, nor shall there have been any
action, suit, proceeding or known investigation instituted or
threatened, nor shall any law or regulation have been enacted
or any action taken thereunder, which would, in ANNIE'S
reasonable judgment, restrain or prohibit, make illegal, or
subject ANNIE'S to material damage as a result of, the
consummation of the transactions contemplated hereby;
(g) OTHER MATTERS: ANNIE'S shall have received such other
instruments and documents as shall have been reasonably
requested by ANNIE'S on or before the Closing Date.
(h) FAIRNESS OPINION: If requested by the Board of Directors of
ANNIE'S, the receipt of a fairness opinion satisfactory to
that Board regarding the valuation of the securities being
issued by ANNIE'S pursuant to this Agreement.
SECTION 10. EVENTS OF DEFAULT AND REMEDIES THEREFOR.
18
<PAGE>
SECTION 10.1. EVENTS OF DEFAULT. Any one or more of the following shall
constitute a default under this Agreement:
(a) [Intentionally Omitted]
(b) Default in the observance or performance of any other covenant
or provision of this Agreement which is not remedied within 30
days;
(c) Default shall occur in the observance or performance of the
agreements and undertakings of ANNIE'S set forth in the
Warrant or any such Warrant shall be held by a court of
competent jurisdiction to be invalid or unenforceable in any
material respect;
(d) ANNIE'S becomes insolvent or bankrupt, is generally not paying
its debts as they become due or makes an assignment for the
benefit of creditors, or ANNIE'S causes or suffers an order
for relief to be entered with respect to it under applicable
Federal bankruptcy law or applies for or consents to the
appointment of a custodian, trustee or receiver for ANNIE'S
for the major part of the property of ANNIE'S, and such
condition continues for a period of 90 days;
(e) A custodian, liquidator, trustee or receiver is appointed for
ANNIE'S or for the major part of the property of ANNIE'S and
is not discharged within 30 days after such appointment; or
(f) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any
bankruptcy or similar law or laws for the relief of debtors,
are instituted by or against ANNIE'S or any Subsidiary and, if
instituted against ANNIE'S are consented to or are not
dismissed within 60 days after such institution.
SECTION 10.2. [INTENTIONALLY OMITTED].
SECTION 11. MISCELLANEOUS.
SECTION 11.1. EXPENSES; STAMP TAX INDEMNITY. ANNIE'S will pay all of
its expenses in connection with this Agreement and the transactions contemplated
hereby. ANNIE'S will pay and save HOLDINGS harmless against any and all
liability with respect to stamp and other taxes, if any, which may be payable in
connection with the execution and delivery of this Agreement, the Note, the
Warrant or Series A Convertible Preferred Stock, whether or not the Note,
Warrant or Series A Convertible Preferred Stock are then outstanding.
SECTION 11.2. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No
delay or failure on the part of HOLDINGS in the exercise of any power or right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of
19
<PAGE>
the same preclude any other or further exercise thereof, or the exercise of any
other power or right, and the rights and remedies of HOLDINGS are cumulative and
no waiver or consent, given or extended to ANNIE'S, shall extend to or affect
any obligation or right not expressly waived or consented to.
SECTION 11.3. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon ANNIE'S and its successors and assigns and shall inure to the benefit of
and be binding upon HOLDINGS and its successors and assigns.
SECTION 11.4. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by ANNIE'S herein and in any certificates
delivered pursuant hereto, whether or not in connection with the Closing Date,
will survive the closing and the delivery of this Agreement, the Note, the
Warrant and the Series A Convertible Preferred Stock, for a period of nine
months from the Closing Date.
SECTION 11.5. SEVERABILITY. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision will not affect the
validity or unenforceability of any remaining portion, which remaining portion
will remain in force and effect as if this Agreement had been executed with the
invalid portion thereof eliminated and it is hereby declared the intention of
the parties hereto that they would have executed the remaining portion of this
Agreement without including therein any such part or portion which may, for any
reason, be hereafter declared invalid or unenforceable.
SECTION 11.6. GOVERNING LAW. This Agreement and the Notes, Warrant, and
Series A Convertible Preferred Stock issued and sold hereunder shall be governed
by and construed in accordance with Delaware law.
SECTION 11.7. [INTENTIONALLY OMITTED]
SECTION 11.8. CAPTIONS. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
SECTION 11.9. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each executed counterpart constituting air original but
all together only one agreement.
SECTION 11.10. ENTIRE AGREEMENT. This Agreement and the other documents
delivered under it constitute the full and entire understanding and agreement
between the parties with respect to the subject matter of this Agreement and
such other documents, and supercede all previous agreement and understandings,
written or oral, concerning the subject matter of this Agreement and such other
documents.
20
<PAGE>
SECTION 11.11. AMENDMENT AND WAIVER. This Agreement may be amended only
by a writing executed by each of the parties hereto. No waiver of compliance
with any provision or condition hereof, and no consent provided for herein,
shall be effective unless evidenced by an instrument in writing duly executed by
the party sought to be charged therewith. No failure on the part of any party to
exercise, and no delay in exercising, any of its rights hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise by any party of
any right preclude any other or future exercise thereof or the exercise of any
other right.
SECTION 11.12. TAX CONSEQUENCES. The parties each acknowledge and agree
that they have sought independent advice as to the tax consequences of the
transactions contemplated hereby, and that no party hereto makes any
representation or warranty, express or implied, to any other party with respect
thereto.
SECTION 11.13. ASSIGNMENT. No party shall assign or attempt to assign
any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of each of the other parties hereto.
SECTION 11.14. NOTICES, ETC. Each notice, report, demand, waiver,
consent and other communication required or permitted to be given hereunder
shall be in writing and shall be effective upon receipt. All notices shall be
sent (a) by registered or certified first-class mail, postage prepaid and return
receipt requested, (b) by Federal Express or comparable overnight courier, or
(c) by telecopier, addressed as follows:
If to HOLDINGS: John Foraker
954 "A" Street
Davis, CA 95616
with a copy to: Dickenson, Peatman & Fogarty
809 Coombs Street
Napa, CA 94559
Attn: C. Richard Lemon, Esq.
Telecopier: (707) 255-6876
If to ANNIE'S: Annie's Homegrown, Inc.
395 Main Street
Wakefield, MA 01880
Attn: President
with a required copy to: Kirkpatrick & Lockhart LLP
75 State Street
Boston, MA 02109
Attn: Stephen L. Palmer, Esq.
21
<PAGE>
SECTION 11.15. ATTORNEYS' FEES. In the event any party incurs costs in
enforcing this Agreement, the prevailing party in any subsequent litigation
shall be entitled to full reimbursement of their expenses of enforcement
including attorneys' fees. This right shall survive and not merge into any
judgment obtained by a party hereto.
SECTION 11.16. NO THIRD PARTY BENEFICIARY. The provisions of this
Agreement are for the benefit only of the parties hereto, and no third party may
seek to enforce, or benefit from, these provisions. The parties specifically
disavow any desire or intention to create any third party beneficiary hereunder,
and specifically declare that no person or entity, except for the parties and
their successors-in-interest, shall have the right hereunder, nor any right or
enforcement hereof.
SECTION 11.17. NO RELIANCE ON OTHER INFORMATION. Except for the
representations and warranties in this Agreement, neither HOLDINGS nor ANNIE'S
or other person acting for them makes any other representation or warranty,
express or implied, with respect to the transactions contemplated by the
Agreement, whether oral or written, whether by HOLDINGS or ANNIE'S or any of
their representatives or agents or any other person.
WHEREAS the parties enter into this Agreement on the date set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Paul B. Nardone
---------------------------
Title: President
-----------------------
HOMEGROWN HOLDINGS CORP.
By: /s/ John Foraker
---------------------------
Title: President
-----------------------
22
EXHIBIT 10.54
-------------
================================================================================
ANNIE'S HOMEGROWN, INC.
A DELAWARE CORPORATION
FIVE-YEAR NINE PERCENT (9%) SUBORDINATED NOTE
DUE ______________, 200_
$1,000,000
Registered Holder: HOMEGROWN HOLDINGS CORP.
================================================================================
ANNIE'S HOMEGROWN, INC, a corporation duly organized and existing under the laws
of the State of Delaware (the "Maker"), for value received, hereby promises to
pay to HOMEGROWN HOLDINGS CORP. or registered assigns (the "Registered Holder")
the principal sum of One Million Dollars ($1,000,000) on the fifth anniversary
of the issuance of this Note, upon presentation and surrender of this Note at
the office of the Maker at 395 Main Street, Wakefield, MA 01880, and to pay
interest at the rate of nine percent (9 %) per annum (computed on the basis of a
360-day year of twelve 30 day months) which interest shall be due and payable
semiannually on the last day of each June and December in each year commencing
on the first of such dates after the date of issuance thereof, and at maturity,
until paid. Payment of principal and interest shall be made at the offices of
the Maker, in lawful money of the United States of America, and shall be mailed
to the Registered Holder hereof at its address appearing on the books of Maker.
The rights of the Registered Holder of this Note to receive payment of any
principal or interest hereon is subject and subordinate to the prior payment of
the principal of, (and premium, if any) and the interest on, all other
indebtedness of the Maker owing to banks or other institutional lenders, whether
now outstanding or subsequently incurred, whether secured or unsecured, and any
deferrals, renewals or extensions of such indebtedness or any debentures, bonds
or notes evidencing such indebtedness (the "Senior Indebtedness"). Upon any
receivership, insolvency, assignment for the benefit of creditors, bankruptcy,
reorganization, sale of all or substantially all of the assets, dissolution,
liquidation, or any other marshalling of the assets and liabilities of the
Maker, or in the event this Note is declared due and payable upon the occurrence
of a default as defined in this Note or in the Investment and Stock Purchase
Agreement between Maker and Registered Holder (the "Stock Purchase Agreement"),
then no amount shall be paid by the Maker with respect to principal and interest
hereon unless and until the principal of, and interest on, all Senior
Indebtedness then outstanding is paid or provided for in full (unless the
holders of the Senior Indebtedness agree to payment hereon).
Maker hereby waives presentment for payment, demand, protest, Notice of Protest
and Notice of Dishonor and all defenses on the ground of extension of time for
the payment hereof which may be given by the Registered Holder or to anyone who
has assumed responsibility for the payment of this Note, or on the ground of
release or modification. Notice of election is waived by Maker. Any impairment
or suspension of the Registered Holder's remedies or rights against the Maker
shall not in any way affect the liability of the Maker.
If any of the following events occur ("Event of Default"), the entire unpaid
principal amount of, and accrued and unpaid interest on, this Note shall
immediately be due and payable:
(a) Maker fails to pay any interest when due or fails to pay the principal
of this Note and accrued interest at its maturity, and such payment is
not made within 10 days of receipt of notice (as required under the
Stock Purchase Agreement) of such default;
(b) Maker commences any voluntary proceeding under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation
2
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law or statute, of any jurisdiction, whether now or subsequently in
effect; or the Maker is adjudicated insolvent or bankrupt by a court of
competent jurisdiction; or the Maker petitions or applies for,
acquiesces in, or consents to, the appointment of any receiver or
trustee of the Maker or for all or substantially all of its property or
assets; or the Maker makes an assignment for the benefit of its
creditors; or the Maker admits in writing its inability to pay its
debts as they mature; or
(c) There is commenced against Maker any proceeding relating to Maker under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, receivership, dissolution, or liquidation law or statute, of
any jurisdiction, whether now or subsequently in effect, and the
proceeding remains undismissed for a period of sixty (60) days or the
Maker by any act indicates its consent to, approval of, or acquiescence
in, the proceeding; or a receiver or trustee is appointed for Maker or
for all or substantially all of its property or assets, and the
receivership or trusteeship remains undischarged for a period of sixty
(60) days; or a warrant of attachment, execution or similar process is
issued against any substantial part of the property or assets of Maker,
and the warrant or similar process is not dismissed or bonded within
sixty (60) days after the levy.
(d) Maker defaults in any of its obligations under the Stock Purchase
Agreement or any if its warranties therein became materially
inaccurate.
If principal or interest or any portion thereof is not paid within fifteen (15)
days of the due date, the Undersigned shall pay a late payment charge in the
amount of 1% for each month that payment is so overdue to the Registered Holder
for the purposes of defraying the expenses incident to handling such delinquent
payment. The late charge represents a reasonable sum considering all of the
circumstances existing on the date of this Note and represents a fair and
reasonable estimate of the costs that will be sustained by the Registered Holder
due to the failure of Maker to make timely payments. The parties further agree
that proof of actual damages would be costly or inconvenient. The late charge
shall be paid without prejudice to the Registered Holder's right to collect
other amounts provided to be paid or to declare a default under this Note or any
instrument securing this Note or from exercising any of the other rights and
remedies of the Registered Holder.
The Registered Holder's remedies in this Note, or any other agreement between
the Maker and the Registered Holder, including but not limited to the Stock
Purchase Agreement shall be cumulative and concurrent and may be pursued
singularly, successively or together against the Maker, and may be exercised as
often as occasion therefor shall arise. The Registered Holder shall not by any
act of omission or commission be deemed to waive any of its rights or remedies
hereunder unless such waiver is in writing and signed by the Registered Holder,
and then only to the extent specifically set forth therein. A waiver of any
right or remedy on one event shall not be construed as continuing or as a bar to
or waiver of such right or remedy on a subsequent event.
Maker shall have the privilege, at any time and from time to time, of prepaying
the outstanding Note, either in whole or in part by payment of the principal
amount of the Note, or portion thereof to be prepaid, and accrued interest
thereon to the date of such prepayment without
3
<PAGE>
penalty. Any prepayment of less than the balance of principal and accrued
interest on this Note shall be applied to accrued interest then principal of
this Note.
If any action for the enforcement of this Note is brought or if this Note is
referred for collection, the Maker promises to pay all costs, including
reasonable attorney's fees including fees incurred prior to and for trial and
appeal actions.
This Note is registered on the books of Maker and is transferable only by
surrender thereof at the principal office of Maker, duly endorsed or accompanied
by a written instrument of transfer duly executed by the Registered Holder of
this Note or its attorney duly authorized in writing. Payment on account of the
principal, premium, if any, and interest on this Note shall be made only to or
upon the order in writing of the Registered Holder.
IN WITNESS WHEREOF, ANNIE'S HOMEGROWN, INC., has caused this Note to be signed
by its President and its Treasurer as of ________________, 1999.
ANNIE'S HOMEGROWN, INC.
By: /s/ Paul B. Nardone
--------------------------
Paul B. Nardone, President
By: /s/ Neil Raiff
---------------------
Neil Raiff, Treasurer
4
<PAGE>
ASSIGNMENT
----------
For Value Received, HOMEGROWN HOLDINGS CORP. hereby sell(s), assign(es) and
transfer(s) to __________________________ the within Five (5) Year Nine Percent
(9%) Subordinated Note, and do(es) hereby appoint Attorney to transfer this Note
on the books of the ANNIE'S HOMEGROWN, INC., with full power of substitution.
Dated: ____________________ HOMEGROWN HOLDINGS CORP.
By: ____________________
NOTICE: The signature on this assignment must correspond in every particular
with the name as written upon the face of this Subordinated Note.
5
EXHIBIT 10.55
-------------
================================================================================
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER.
WARRANT TO PURCHASE
1,500,000 SHARES OF COMMON STOCK
OF
ANNIE'S HOMEGROWN, INC.
A DELAWARE CORPORATION
VOID AFTER November 30, 2004
WARRANT NO1
REGISTERED OWNER: HOMEGROWN HOLDINGS CORP.
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1 EXERCISE OF WARRANT ...................................... 4
SECTION 2 RESERVATION OF COMMON STOCK............................... 4
SECTION 3 MERGERS, CONSOLIDATIONS, SALES............................ 4
SECTION 4 DISSOLUTION OR LIQUIDATION................................ 4
SECTION 5 NOTICE OF EXTRAORDINARY DIVIDEND.......................... 5
SECTION 6 FRACTIONAL SHARES......................................... 5
SECTION 7 FULLY PAID STOCK; TAXES................................... 5
SECTION 8 CLOSING OF TRANSFER BOOKS................................. 5
SECTION 9 DEFINITIONS............................................... 6
SECTION 10 LOST, STOLEN WARRANTS, ETC................................ 6
SECTION 11 WARRANT HOLDER NOT SHAREHOLDER............................ 6
SECTION 12 NOTICES................................................... 6
SECTION 13 SEVERABILITY.............................................. 7
SECTION 14 INDEX AND CAPTIONS........................................ 7
2
<PAGE>
THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION
THEREUNDER.
Warrant No. 1 Date: November 30, 1999
WARRANT TO PURCHASE
1,500,000 SHARES OF COMMON STOCK
OF
ANNIE'S HOMEGROWN, INC.
THIS IS TO CERTIFY that, for value received and subject to the provisions
hereinafter set forth, HOMEGROWN HOLDINGS CORP., a Delaware corporation,
("HOLDINGS") or assigns, is entitled to purchase from ANNIE'S HOMEGROWN, INC., a
Delaware corporation (the "Corporation"), 1,500,000 shares of Common Stock of
the Corporation, on the terms and conditions hereinafter set forth.
The purchase price for each share of Common Stock to be issued to the holder of
this Warrant upon the exercise of this Warrant is $2.00 per share if the Warrant
is exercised before the third anniversary of the "Closing" as defined in Section
2.1 of the Investment and Stock Purchase Agreement between the Corporation and
HOLDINGS (the "Investment and Stock Purchase Agreement"), which definition is
incorporated herein by reference as though set forth in full; $2.50 during the
six months thereafter; $3.00 from then to the fourth anniversary of the Closing;
$3.50 for six months thereafter; and $4.00 per share from four and one-half
years after the Closing until expiration of the Warrants. In the event the net
sales of the Corporation for the fiscal year ended March 31, 2000 do not equal
or exceed $9,500,000 or the "adjusted net income" of the Corporation for that
fiscal year is not positive, the exercise price of the Warrants shall be reduced
by $.50 per share from each of the prices listed above. "Adjusted net income" is
defined on Exhibit "C" to the Investment and Stock Purchase Agreement, which
definition is incorporated herein by reference as though set forth in full.
This Warrant will be void unless exercised before the fifth anniversary of the
Closing (the "Expiration Date") and all rights granted under this Warrant shall
expire and lapse on the Expiration Date.
The terms which are capitalized herein shall have the meanings specified in
Section 9 unless the context shall otherwise require.
3
<PAGE>
SECTION 1. EXERCISE OF WARRANT.
Subject to the conditions hereinafter set forth, on or prior to the Expiration
Date, this Warrant may be exercised for all shares of Common Stock which may
then be purchased hereunder, or for any part of the shares of Common Stock which
may then be purchased hereunder. Upon any such exercise, the holder shall
surrender this Warrant (with the subscription form at the end hereof duly
executed) at the principal office of the Corporation. Payment for the shares
purchased by the holder pursuant to this Section shall be made in funds
immediately available at the Corporation's office, for the shares so purchased.
SECTION 2. RESERVATION OF COMMON STOCK.
The Corporation covenants and agrees that at all times it will have authorized,
and in reserve, a sufficient number of shares of its Common Stock to provide for
the exercise of the rights represented by this Warrant. Shares of Common Stock
issued pursuant to this Warrant will be "restricted securities" under the
Securities Act of 1933, as amended, and will be legended accordingly.
SECTION 3. MERGERS, CONSOLIDATIONS, SALES.
In the case of any consolidation or merger of the Corporation with another
entity, or the sale of all or substantially all of its assets to another entity,
or any reorganization or reclassification of the Common Stock or other equity
securities of the Corporation, then, as a condition of such consolidation,
merger, sale, reorganization or reclassification, lawful and adequate provision
shall be made whereby the holder of this Warrant shall thereafter have the right
to receive upon the basis and upon the terms and conditions specified herein and
in lieu of the shares of Common Stock immediately theretofore purchasable
hereunder such shares of stock, securities or assets as may (by virtue of such
consolidation, merger, sale, reorganization or reclassification) be issued or
payable with respect to or in exchange for a number of outstanding shares of
Common Stock equal to the number of shares of Common Stock immediately
theretofore so purchasable hereunder had such consolidation, merger, sale,
reorganization or reclassification not taken place. The Corporation shall not
effect any such consolidation, merger or sale, unless prior to or simultaneously
with the consummation thereof, the successor entity (if other than the
Corporation) resulting from such consolidation or merger or the entity
purchasing such assets shall assume by written instrument executed and mailed or
delivered to the holder of this Warrant, the obligation to deliver to such
holder such shares of stock, securities, cash or other assets as, in accordance
with the foregoing provisions, such holder may be entitled to receive.
SECTION 4. DISSOLUTION OR LIQUIDATION.
4
<PAGE>
In the event of any proposed distribution of the assets of the Corporation in
dissolution or liquidation except under circumstances when the foregoing Section
3 shall be applicable, the Corporation shall mail notice thereof to the holder
of this Warrant and shall make no distribution to shareholders until the
expiration of 30 days from the date of mailing of the aforesaid notice and, in
any such case, the holder of this Warrant may exercise the purchase rights with
respect to this Warrant within 30 days from the date of mailing such notice and
all rights herein granted not so exercised within such 30-day period shall
thereafter become null and void.
SECTION 5. NOTICE OF EXTRAORDINARY DIVIDENDS.
If the Board of Directors of the Corporation shall declare any dividend or other
distribution on its Common Stock except out of earned surplus or by way of a
stock dividend payable on its Common Stock, the Corporation shall mail notice
thereof to the holder of this Warrant not less than 30 days prior to the record
date fixed for determining shareholders entitled to participate in such dividend
or other distribution and the holder of this Warrant shall not participate in
such dividend or other distribution or be entitled to any rights on account or
as a result thereof unless and to the extent that this Warrant is exercised
prior to such record date. The provisions of this paragraph shall not apply to
distributions made in connection with transactions covered by Section 3.
SECTION 6. FRACTIONAL SHARES.
In the event that any exercise of this Warrant would result in the issuance by
the Corporation of a fractional share of Common Stock, the Corporation shall pay
to the holder of this Warrant upon such exercise an amount in cash equal to the
market price, as determined by the Corporation, of one whole share of the Common
Stock multiplied by such fractional share.
SECTION 7. FULLY PAID STOCK; TAXES.
The Corporation covenants and agrees that the shares of Common Stock to be
delivered on the exercise of the purchase rights herein provided for shall, at
the time of such delivery, be validly issued and be fully paid and
nonassessable. The Corporation further covenants and agrees that it will pay
when due and payable any and all Federal and State transfer, stamp, excise or
similar taxes which may be payable in respect of this Warrant or any Common
Stock upon the exercise of the purchase rights herein provided for pursuant to
the provisions hereof. The Corporation shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the transfer
and delivery of Common Stock (and the certificates evidencing ownership thereof)
in any name other than that of the holder exercising this Warrant, and any such
tax shall be paid by such holder at the time of such transfer.
SECTION 8. CLOSING OF TRANSFER BOOKS.
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<PAGE>
The right to exercise this Warrant shall not be suspended during any period that
the stock transfer books of the Corporation for its Common Stock may be closed.
The Corporation shall not be required, however, to deliver certificates of its
Common Stock upon such exercise while such books are duly closed for any
purpose, but the Corporation may postpone the delivery of the certificates for
such Common Stock until the opening of such books, and they shall, in such case,
be delivered promptly upon the opening thereof, or as soon as practicable
thereafter.
SECTION 9. DEFINITIONS.
In addition to the terms defined elsewhere in this Warrant, the following terms
have the following respective meanings:
The term "COMMON STOCK" as used herein shall include only Common Stock of the
Corporation, authorized at the date hereof or hereafter authorized and any class
of common stock issued in substitution therefor.
The term "WARRANTS" as used herein shall mean this and all warrants hereafter
issued in substitution for this Warrant.
SECTION 10. LOST, STOLEN WARRANTS, ETC.
In case this Warrant shall be mutilated, lost, stolen or destroyed, the
Corporation may issue a new Warrant of like date, tenor and denomination and
deliver the same in exchange and substitution for and upon surrender and
cancellation of the mutilated Warrant, or in lieu of the Warrant lost, stolen or
destroyed, upon receipt of evidence satisfactory to the Corporation of the loss,
theft or destruction of such Warrant, and upon receipt of indemnity satisfactory
to the Corporation.
SECTION 11. WARRANT HOLDER NOT SHAREHOLDER.
This Warrant does not confer upon the holder hereof any right to vote or to
consent or to receive notice as a shareholder of the Corporation, as such, in
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof as hereinbefore provided.
SECTION 12. NOTICES.
All communications provided for hereunder shall be in writing and, if to the
holder of this Warrant, delivered or mailed prepaid by registered or certified
mail or overnight air courier, or by facsimile communication, in each case
addressed to the holder hereof at such address as such holder may designate to
the Corporation in writing, and if to the Corporation, delivered or mailed by
registered or certified mail or overnight courier, or by facsimile
communication, to the Corporation at 395 Main Street, Wakefield, MA 01880,
Attention: Chief Financial Officer, or to such other address as the Corporation
may designate to the holder hereof in writing; provided,
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<PAGE>
however, that a notice to the holder by overnight air courier shall only be
effective if delivered to such holder at a street address designated for such
purpose in accordance with this Section, and a notice to such holder by
facsimile communication shall only be effective if made by confirmed
transmission to such holder at a telephone number designated for such purpose in
accordance with this Section and promptly followed by delivery of such notice by
registered or certified mail or overnight air courier, as set forth above. The
person in whose name any Warrant shall be registered shall be deemed and treated
as the owner and holder thereof for all purposes of this Warrant.
SECTION 13. SEVERABILITY.
Should any part of this Warrant for any reason be declared invalid, such
decision shall not affect the validity of any remaining portion, which remaining
portion shall remain in force and effect as if this Warrant had been executed
with the invalid portion thereof eliminated, and it is hereby declared the
intention of the parties hereto that they would have executed and accepted the
remaining portion of this Warrant without including therein any such part, parts
or portion which may, for any reason, be hereafter declared invalid.
SECTION 14. INDEX AND CAPTIONS.
The index and the descriptive headings of the various sections of this Warrant
are for convenience only and shall not affect the meaning or construction of the
provisions hereof.
IN WITNESS WHEREOF, ANNIE'S HOMEGROWN, INC., has caused this Warrant to be
signed by its President and its Treasurer and this Warrant to be dated November
30, 1999.
ANNIE'S HOMEGROWN, INC.
By: /s/ Paul B. Nardone
--------------------------
Paul B. Nardone, President
By: /s/ Neil Raiff
---------------------
Neil Raiff, Treasurer
7
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SUBSCRIPTION
ANNIE'S HOMEGROWN, INC.
The undersigned, ____________________, pursuant to the provisions of
the within Warrant, hereby elects to purchase _______________ Shares of Common
Stock of ANNIE'S HOMEGROWN, INC., a Delaware corporation, covered by the within
Warrant.
Signature_________________
Address___________________
Dated:____________________
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ASSIGNMENT
FOR VALUE RECEIVED__________________________ hereby sells, assigns and
transfers unto _____________________ the within Warrant and all rights evidenced
thereby and does irrevocably constitute and appoint _____________________,
attorney, to transfer the said Warrant on the books of the within-named
Corporation.
________________________________
Dated:____________________
9
EXHIBIT 10.56
-------------
December 2, 1999
Kirkpatrick & Lockhart LLP
75 State Street, Sixth Floor
Boston, Massachusetts 02109
Attention: Stephen L. Palmer, Esq.
Re: Homegrown Holdings, Inc. - Annie's Homegrown, Inc. Escrow
---------------------------------------------------------
Ladies and Gentlemen:
In connection with the closing today of the Investment and Stock
Purchase Agreement ("Investment Agreement") by and between Homegrown Holdings
Corp. ("Holdings") and Annie's Homegrown, Inc. ("Annie's"), Annie's is
depositing with you a fully executed Note and Warrant, each as defined in the
"Investment Agreement," to be held by you in escrow pursuant to the terms of
this escrow agreement. You are authorized to date and release the Note and
Warrant to the escrow agent identified in the Pledge and Escrow Agreement dated
the date hereof between Holdings, Ann E. Withey and Andrew M. Martin, on behalf
of Holdings and subject to such Pledge and Escrow Agreement, upon receipt by you
of notice that Annie's has received $1,000,000 of the Investment designated for
purchase of the Note and the escrow will be terminated. Under the Investment
Agreement, Holdings is obligated to deliver $1,000,000 to Annie's on or before
April 30, 2000, unless Annie's is then insolvent or bankrupt. Unless Holdings
and Annie's agree to an extension of the April 30, 2000 date, or provide other
joint written instructions to you, prior to May 1, 2000, you may destroy the
Note and Warrant on May 1, 2000 and the escrow will be terminated.
Any variation from these instructions must be in a writing signed by
both Holdings and Annie's, or by order of an arbitrator jointly selected by
Holdings and Annie's, or by a court of competent jurisdiction. You may act upon
any document believed by you to be genuine and purported to be signed by the
proper parties, and to rely on the truth of the statements contained therein,
and will incur no liability in so acting. As escrow agent, you are acting as a
depository only and are not a party to or bound by any agreement or undertaking
between Holdings and Annie's, and your duties are limited to those specifically
stated herein. You shall not be liable for any error of judgement or any act
done or omitted in good faith. In the event of a disagreement or adverse claims
by Holdings and Annie's, you shall be entitled to continue, without liability,
to refrain and refuse to act until instructions are received in a writing signed
by both Holdings and Annie's, or until you receive written instructions from an
arbitrator jointly selected by Holdings and Annie's, or until you receive an
order of a court of competent jurisdiction. You shall not receive any
compensation for acting in the capacity of escrow agent, provided, however, that
nothing in this escrow agreement shall prevent you from rendering legal services
to either Holdings or Annie's and from receiving compensation therefor. This
escrow agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
[SIGNATURES FOLLOW]
<PAGE>
HOMEGROWN HOLDINGS ANNIE'S KIRKPATRICK & LOCKHART LLP,
CORP. HOMEGROWN, INC. as Escrow Agent
By:/s/ Kirkpatrick &
By: /s/ John Foraker By: /s/ Paul B. Nardone Lockhart LLP
---------------- ------------------- ------------------------
EXHIBIT 10.57
================================================================================
STOCK COLLAR AGREEMENT
HOMEGROWN HOLDINGS CORP.
A DELAWARE CORPORATION
AND
ANN E. WITHEY
RE:
PUT AND CALL OPTIONS FOR 900,000 SHARES OF
COMMON STOCK OF ANNIE'S HOMEGROWN, INC.
DATED AS OF
DECEMBER 2, 1999
================================================================================
<PAGE>
This STOCK COLLAR AGREEMENT (the "Agreement") is entered into as of
this 1st day of December, 1999, by and between HOMEGROWN HOLDINGS CORP., a
Delaware corporation, ("HOLDINGS") and ANN E. WITHEY ("SELLER").
NOW THEREFORE the parties hereto agree as follows:
SECTION 1. STOCK COLLAR.
SECTION 1.1. STOCK COLLAR. HOLDINGS is hereby granted an option (the
"Call Option") to purchase from SELLER 900,000 shares (the "Shares") of common
stock, $0.001 par value per share (the "Common Stock"), of ANNIE'S HOMEGROWN,
INC., a Delaware corporation (the "COMPANY"); and SELLER shall have an option
(the "Put Option") (the Call Option and the Put Option are together called the
"Collar") to require HOLDINGS to purchase the Shares from her. The Call Option
shall be exercisable at the times and in the amounts described below; and the
Put Option shall be exercisable with respect to those Shares with respect to
which the Call Option has become exercisable fifteen (15) days after the Call
Option has become exercisable.
SECTION 1.2. EXERCISE PRICE. The exercise price of the Call Option
shall be $2.00 per share; and the exercise price for the Put Option shall be
$1.92 per share (in each case as adjusted for stock dividends or stock splits).
If, however, the Internal Revenue Service adopts regulations under section 1259
of the Code that (a) retroactively apply to this Collar, and (b) would
characterize this Collar as a constructive sale because of the closeness of the
exercise prices, then the Put Option exercise price shall be adjusted
prospectively as mutually agreed between the parties hereto so as to widen the
range of the Collar to the extent necessary to avoid such a characterization,
but in no case shall the Call Option exercise price be above $2.00 or the Put
Option exercise price be below $1.60 per share (in each case as adjusted for
stock dividends or stock splits).
SECTION 1.3. TRANSFER INSTRUCTIONS. Transfer of the Shares is currently
restricted by Irrevocable Stock Transfer Instructions dated July 27, 1995 (the
"Original Instructions") directed to the Bank of Boston as the COMPANY's
transfer agent; as amended pursuant to a First Addendum thereto also dated July
27, 1995 (the "Additional Instructions"). The Original and Additional
Instructions (the "Instructions") were required by the Massachusetts Division of
Securities in connection with the direct public offering of the COMPANY's common
stock that occurred in 1995.
The Original Instructions apply to 750,000 Shares owned by SELLER and
750,000 shares of Common Stock owned by Andrew M. Martin ("MARTIN") (the
"Covered Shares"). Among several methods for the sale of the Covered Shares,
Section 2(a) of the Original Instructions permit the sale of 25% of the Covered
Shares on each of the 6th, 7th, 8th and 9th anniversaries of the Original
Instructions. Section 2(i) of the Additional Restrictions apply to any other
shares of Common Stock (besides the Covered Shares) owned by SELLER or MARTIN;
and among several methods for the sale of such shares, permit the sale of such
shares at the rate of 1% of the shares of the COMPANY's outstanding Common Stock
during any three-month period.
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<PAGE>
SECTION 1.4. EXERCISE DATES. The exercise dates of the Collar shall
occur so as to apply to the Shares as quickly as possible under Section 2(a) of
the Original Instructions and Section 2(i) of the Additional Instructions as now
in effect. Such exercise shall be as follows:
(a) with respect to the Covered Shares, the exercise dates will be
July 27, 2001, 2002, 2003 and 2004 (the "Covered Share Exercise
Dates"), and the SELLER shall receive as purchase price for the
Covered Shares with respect to which a Call or Put Option is
exercised in connection with each Covered Share Exercise Date an
amount equal to the applicable exercise price set forth in
Section 1.2 above multiplied by the 187,500 Covered Shares (as
adjusted for stock dividends or stock splits) which shall become
available under the Instructions on each Covered Share Exercise
Date; and
(b) with respect to all other Shares owned by the SELLER, the
exercise dates shall be the Closing Date, as hereinafter defined,
and the date of each three-month anniversary of the Closing Date
thereafter (the "Other Share Exercise Dates"), and the SELLER
shall receive as the purchase price for the Shares with respect
to which a Call or Put Option is exercised in connection with the
Other Share Exercise Dates an amount equal to the applicable
exercise price set forth in Section 1.2 above multiplied by the
one percent (1%) of the total number of shares of Common Stock
issued and outstanding on the date hereof (as adjusted for stock
dividends or stock splits) which shall become available on each
Other Share Exercise Date.
SECTION 1.5. TRANSFER OF THE SHARES. The actual transfer and sale of
and payment for the Shares shall occur as permitted by Section 2(a) of the
Original Instructions and Section 2(i) of the Additional Instructions as in
effect on the date hereof provided, however, that the title and beneficial
interest of the shares shall transfer to HOLDINGS at such earlier time as the
Commonwealth of Massachusetts permits and the applicable Call Option is
exercised (any Shares so transferred are hereinafter referred to as "Early
Shares"), provided, further, that payment for the Early Shares shall
nevertheless be made in accordance with the payment schedule set forth in
Section 1.4 above, and any payments due on the Early Shares shall be represented
by delivery by HOLDINGS prior to the transfer of the Early Shares a
non-interest-bearing Promissory Note for the principal sum due for the Early
Shares (which shall equal $2.00 per Early Share with respect to which a Call
Option is exercised pursuant hereto). As the Shares become transferable to
HOLDINGS, either as the result of an Exercise of a Call Option by HOLDINGS, or
the exercise of a Put Option by the SELLER, SELLER shall transfer or cause the
transfer of the SHARES to the escrow agent (the "Escrow Agent") under the Pledge
Agreement described in Section 1.6 below, to hold on behalf HOLDINGS, subject to
a pledge for the benefit of SELLER and MARTIN as described therein. Until the
Shares are sold and transferred, they shall be subject to an irrevocable proxy
pursuant to an agreement about such proxy between HOLDINGS and SELLER (the
"Irrevocable Proxy Agreement") and pursuant to which a representative of
HOLDINGS shall act as the proxy for the Seller and vote the Shares commencing at
the Closing, as defined herein. The Irrevocable Proxy shall terminate if and
when HOLDINGS fails to exercise any installment of the Call Option within
fifteen (15) days of having the right to do so, and such failure continues for
five (5) days after notice from SELLER that the Call Option has not been
exercised.
SECTION 1.6. SECURITY. To secure payment by HOLDINGS of the purchase
price for the Shares, HOLDINGS shall enter into a Pledge Agreement (the "Pledge
Agreement") benefiting
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<PAGE>
SELLER and MARTIN pursuant to which any Shares owned by HOLDINGS shall be
pledged together with the subordinated promissory note of the COMPANY and the
preferred stock of the COMPANY which HOLDINGS is acquiring concurrently with the
Closing under this Agreement (collectively the "Collateral"). The Pledge
Agreement shall be substantially in the form attached hereto as Exhibit "A"
hereto, providing for the customary protections and remedies in favor of the
parties and shall remain in existence until the purchase price for the Shares
has been paid in full (provided, however, that as such purchase price is paid,
collateral shall be released from the Pledge Agreement so long as the aggregate
value of the remaining collateral, not including any Early Shares within the
collateral, except to the extent payment has actually been made for them, as
further described in the Pledge Agreement, is equal to 200% of the purchase
price remaining to be paid).
SECTION 2. CLOSING.
SECTION 2.1. THE CLOSING DATE. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, on December 2, 1999 or on such other date as shall be agreed upon by the
parties (the "Closing Date"), the parties shall execute this Agreement, and
SELLER and HOLDINGS shall execute and deliver to each other an Irrevocable Proxy
Agreement substantially in the form attached hereto as Exhibit "B" naming
HOLDINGS' chosen representative as the proxy (the "Proxy") to vote the Shares
during the life of the Irrevocable Proxy Agreement, in return for HOLDINGS'
promise to pay the purchase price and delivery of the Pledge Agreement securing
payment for the Shares.
The closing of the transactions under this Agreement (the "Closing")
shall take place at the offices of Kirkpatrick & Lockhart LLP, located at 75
State Street, Boston, MA on the Closing Date. The Closing shall be deemed to
have been effective as of 11:59 p.m. on the Closing Date.
SECTION 2.2. DELIVERY AND TRANSFER. At the Closing, the
parties shall exchange executed copies of this Agreement and
the Irrevocable Proxy Agreement against the promise of payment
therefor by HOLDINGS and delivery of the Pledge Agreement as
security for payment by HOLDINGS, and in the case that
HOLDINGS exercises its Call Option with respect to the first
set of Shares with respect to which the Call Option has become
exercisable, payment of the appropriate amount due on such
Shares.
SECTION 2.3. SUBSEQUENT DELIVERIES AND TRANSFERS. Upon each exercise of
a Call or Put Option, HOLDINGS shall deliver payment for the Shares as to which
the Call or Put Option to SELLER has been exercised within fifteen (15) days
after the date of exercise of such Option, and SELLER shall assign and deliver
such Shares to HOLDINGS within fifteen (15) days after receipt of payment
therefor. HOLDINGS shall promptly cause the Shares assigned and delivered to it
to be transferred to it on the books of the Company.
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<PAGE>
SECTION 3. REPRESENTATIONS AND WARRANTIES BY SELLER
SELLER hereby represents and warrants except as disclosed on the
Schedule attached hereto, as of the date hereof as follows:
SECTION 3.1. POWER OF TRANSFER. SELLER has all necessary power and
authority to own, use and transfer the Shares and to transact the business being
conducted with HOLDINGS as permitted under and consistent with the Instructions.
SECTION 3.2. NO CONFLICT. Neither the execution and delivery of this
Agreement nor compliance with any of the provisions therein, nor the
consummation of the transactions contemplated thereby, will:
(a) conflict with or result in a breach of any provision of any
shareholder agreement;
(b) result in a default, or give rise to any right of termination,
cancellation or acceleration, under any term, condition or
provision of any contract, encumbrance or other instrument or
obligation to which SELLER, is a party or by which it or any
of the Shares may be bound; or
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to SELLER, or any of the Shares.
SECTION 3.3. TITLE TO SHARES. SELLER has good and marketable title to
the Shares.Except as provided in the Instructions, the Shares are not subject to
any mortgage, pledge, lien, lease, security interest, encumbrance or obligation
not yet due and payable, which materially detracts from the value of the Shares.
SECTION 3.4. COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery
and performance of and compliance with this Agreement, will not result in a
breach or violation of or constitute a material default under any legal
instrument or document nor create any violation, breach or default which
singularly or in the aggregate would (a) have a material adverse affect on the
Shares; (b) require any consent or waiver (which has not been obtained), or (c)
result in the creation of a pledge, lien, encumbrance, or charge on any of the
Shares (except as provided herein under the Pledge Agreement).
SECTION 3.5. LEGAL PROCEEDINGS, BUSINESS, ETC. There is no legal,
equitable, administrative or arbitration action, suit, proceeding or known
investigation pending or, to the best knowledge of the SELLER, threatened
against or affecting SELLER or any of the Shares. There is no judgment, decree,
injunction, rule or order of any court, governmental department, commission,
agency, instrumentality or arbitrator outstanding against SELLER which would
affect the Shares and, to the best knowledge of SELLER, there is no basis for
any such action, suit, proceeding or investigation. SELLER is not in default
with respect to any order, injunction or decree of any court or governmental
department, commission, board or agency, and no such order, injunction or decree
is now in effect which restrains the sale of the Shares.
SECTION 3.6. CONSENTS AND APPROVALS. No consent, approval, order,
authorization or registration, qualification, designation, declaration, or
filing with any person including any
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<PAGE>
federal, state, or local governmental authority on SELLER's part is required in
connection with the valid execution, delivery and performance of this Agreement
or the consummation of any other transaction contemplated by hereby, except
registration and qualification (or filings with respect to exemptions from
qualification) under the Federal securities laws and applicable Delaware laws,
which qualifications will have been obtained and will be effective on the
Closing Date unless adequate exemptions from such qualifications are then
available.
SECTION 4. REPRESENTATIONS AND WARRANTIES BY HOLDINGS.
HOLIDINGS hereby represents and warrants to SELLER, as of the date
hereof as follows:
SECTION 4.1. ORGANIZATION. HOLDINGS is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
HOLDINGS has all necessary power and authority to own, use and transfer its
properties and assets and to transact the business being conducted under this
Agreement and the Irrevocable Proxy Agreement, as well as the Investment and
Stock Purchase Agreement to be entered into between HOLDINGS and the COMPANY
(the "Investment and Stock Purchase Agreement").
SECTION 4.2. AUTHORIZATION. HOLDINGS has all necessary corporate power
and authority to enter into this Agreement as well, as the Investment and Stock
Purchase Agreement. Once this Agreement has been duly executed and delivered by
HOLDINGS it will constitute a legal, binding and valid obligation of HOLDINGS,
enforceable against HOLDINGS in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditor's rights generally or by equitable principles (whether
considered in an action at law or equity.)
SECTION 4.3. CONSENTS AND APPROVALS. No consent, approval,
authorization of, or declaration, filing or registration with any person
including any federal, state or local governmental or regulatory authority, or
any other person or entity is required to be made or obtained by HOLDINGS in
connection with the execution, delivery and performance of this Agreement or the
Investment and Stock Purchase Agreement.
SECTION 4.4. NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will result in a violation of or a conflict with any provision of the
Certificate of Incorporation of HOLDINGS or a breach thereof, or a default
under, of any term or provision of any contract, agreement, indebtedness, lease,
commitment, license, franchise, permit, authorization, or concession to which
HOLDINGS is a party, which breach or default would have a material adverse
effect on the business or financial condition of HOLDINGS or its ability to
consummate the transactions contemplated hereby.
SECTION 5. CONVENANTS.
SECTION 5.1. EXPENSES OF THE PARTIES. Except as otherwise expressly
provided in this Agreement, each of the parties hereto shall pay all of its
expenses incurred in connection with the
6
<PAGE>
preparation, negotiation, authorization and consummation of this Agreement and
the transactions contemplated hereby, including all fees and expenses of agents,
representatives, legal counsel and accountants.
SECTION 5.2. FURTHER ASSURANCES. Each party shall cooperate with the
others, take such further action, and execute and deliver such further
documents, as may be reasonably requested by any other party in order to carry
out the terms and purposes of this Agreement.
SECTION 5.3. DIVIDENDS. The parties hereby acknowledge that until the
Shares are sold and transferred to HOLDINGS hereunder, any dividends on such
unsold Shares shall be for the account of SELLER.
SECTION 5.4 PROPORTIONATE EXERCISE OF CALL OPTIONS. Simultaneous with
the Closing of this Agreement, HOLDINGS is entering into a Stock Collar
Agreement with MARTIN (the "Martin Stock Collar Agreement"), pursuant to which
HOLDINGS may exercise a call option (the "Martin Call Option") similar to the
Call Option described herein with respect to 1,677,691 shares of Common Stock of
the Company owned by Martin (the "Martin Shares"). The Martin Call Option shall
be exercisable on the same dates as the Call Option under this Agreement.
HOLDINGS agrees, on each exercise date, until the purchase of all of the Shares
under this Agreement or the purchase of all of the shares under the Martin Stock
Collar Agreement, to exercise its Call Option under this Agreement and its call
option under the Martin Stock Collar Agreement with respect to the same number
of shares of Common Stock.
SECTION 6. CONDITIONS TO PERFORMANCE OBLIGATIONS.
SECTION 6.1. CONDITIONS TO HOLDINGS' PERFORMANCE OBLIGATIONS. The
obligations of HOLDINGS to complete the transactions provided for herein shall
be subject, at its election, to satisfaction on or before the Closing Date of
each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES: All representations and
warranties of SELLER contained in this Agreement shall be true
and correct in all respects as of this date;
(b) SIMULTANEOUS CLOSING OF TRANSACTIONS WITH THE COMPANY. The
Investment and Stock Purchase Agreement and the other
agreements contemplated thereby shall close simultaneously
with the Closing under this Agreement;
(c) PRE-CLOSING OBLIGATIONS: SELLER shall have performed all
obligations required to be performed under this Agreement, the
performance of which has not been waived by HOLDINGS;
(d) CONSENTS FOR HOLDINGS: All notices, filings, consents, waivers
and approvals required to be obtained by HOLDINGS concerning
this Agreement and the Investment and Stock Purchase Agreement
shall have been given, made or obtained, as the case may be,
by HOLDINGS;
(e) NO BAR: There shall not be in effect any judgment, decree or
order of, or position taken by, any court or administrative
body of competent jurisdiction, nor shall
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<PAGE>
there have been any action, suit, proceeding or known
investigation instituted or threatened, nor shall any law or
regulation have been enacted or any action taken thereunder,
which would, in HOLDINGS' reasonable judgment, restrain or
prohibit, make illegal, or subject HOLDINGS to material damage
as a result of, the consummation of the transactions
contemplated by this Agreement;
(e) CONSENT OF HOLDERS OF OTHER SECURITIES: On or prior to the
Closing Date, any consent or approvals required to be obtained
from any holder or holders of any outstanding securities of
COMPANY which shall be necessary to permit the consummation of
the transactions contemplated by the Investment and Stock
Purchase Agreement between COMPANY and HOLDINGS shall have
been obtained and all such consents or amendments shall be
satisfactory in form and substance to HOLDINGS.
(f) SIMULTANEOUS CLOSINGS. The Martin Stock Collar Agreement and
an Irrevocable Proxy Agreement (the "Martin Irrevocable Proxy
Agreement") between HOLDINGS and MARTIN shall close
simultaneously with the Closing under this Agreement.
(g) IRREVOCABLE PROXY. The Irrevocable Proxy Agreement between
SELLER and HOLDINGS substantially in the form attached hereto
as Exhibit "B" shall be in effect.
(h) OTHER MATTERS: HOLDINGS shall have received such other
instruments and documents as shall have been reasonably
requested by counsel to HOLDINGS on or before the Closing
Date.
SECTION 6.2. CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligations
of SELLER to complete the transactions provided for herein shall be subject, at
its election, to satisfaction on or before the Closing Date of each of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES: All representations and
warranties of HOLDINGS contained in this Agreement shall be
true and correct in all respects as of the date hereof and as
of the Closing Date as though made on and as of the Closing
Date (except as may be otherwise provided in this Agreement);
(b) PRE-CLOSING OBLIGATIONS: HOLDINGS shall have performed all
obligations required to be performed by it hereunder, the
performance of which has not been waived by SELLER; and
(c) DUE AUTHORIZATION: HOLDINGS execution and delivery of this
Agreement, its compliance with the provisions hereof and the
consummation of all of the transactions contemplated hereby
shall have been duly and validly authorized by all necessary
action on the part of HOLDINGS, and SELLER shall have received
a duly certified copy of all actions taken by HOLDINGS' Board
of Directors, chief executive officer and the chief financial
officer effecting the same;
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(d) CONSENTS BY HOLDINGS, ETC.: All notices, filings, consents,
waivers and approvals required to be obtained shall have been
given, made or obtained, as the case may be, by HOLDINGS, and
SELLER shall have received a true copy of each thereof;
(e) NO BAR: There shall not be in effect any judgment, decree or
order of, or position taken by, any court or administrative
body of competent jurisdiction, nor shall there have been any
action, suit, proceeding or known investigation instituted or
threatened, nor shall any law or regulation have been enacted
or any action taken thereunder, which would, in SELLER's
reasonable judgment, restrain or prohibit, make illegal, or
subject SELLER to material damage as a result of, the
consummation of the transactions contemplated hereby;
(f) SIMULTANEOUS CLOSINGS OF OTHER TRANSACTIONS: The Investment
and Stock Purchase Agreement, and the other agreements
contemplated thereby, and the Martin Stock Collar Agreement
and the Martin Irrevocable Proxy Agreement, shall close
simultaneously with the Closing under this Agreement
(g) OTHER MATTERS: SELLER shall have received such other
instruments and documents as shall have been reasonably
requested by them on or before the Closing Date.
SECTION 7. INVESTMENT REPRESENTATIONS AND RESTRICTIONS
SECTION 7.1. RESTRICTED SECURITIES. HOLDINGS understands that the
securities it is purchasing are characterized as restricted securities under
Federal laws because they were acquired from SELLER in a transaction not
involving a public offering and that under such laws and applicable regulations
the securities may be resold without registration under Federal securities laws
only in certain limited circumstances. HOLDINGS represents, and in entering into
this Agreement, SELLER understands, that HOLDINGS is acquiring the Shares for
the purpose of investment and not with a view to the distribution thereof, and
that HOLDINGS has no present intention of selling, negotiating or otherwise
disposing of the Shares; it being understood, however, that the disposition of
HOLDINGS' property will at all times be and remain within its control.
SECTION 7.2. NOT FOREIGN INVESTOR. HOLDINGS is not a foreign investor
as defined by the United States Department of Commerce, and therefore HOLDINGS
will not be required to file any Form BE-13 with the Department of Commerce.
SECTION 7.3. LEGENDS. It is further understood by HOLDINGS that the
certificates evidencing the Shares shall be endorsed with the following legends,
or a legend to similar effect:
(a) FEDERAL LEGEND. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS
DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES
MAY NOT BE SOLD OR OFFERED FOR SALE OR
9
<PAGE>
OTHERWISE DISTRIBUTED EXCEPT (1) IN CONJUNCTION WITH AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT,
(2) IN COMPLIANCE WITH RULE 144, OR (3) UNDER AN OPINION OF
COUNSEL, SATISFACTORY TO ANNIE'S HOMEGROWN, INC. THAT SUCH
REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SAID SALE,
OFFER OR DISTRIBUTION.
(b) OTHER LEGENDS. Any other legends required by applicable state
blue sky law which shall not be inconsistent with the
Instructions.
SECTION 8. MISCELLANEOUS.
SECTION 8.1. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No
delay or failure on the part of either party in the exercise of any power or
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of each
party are cumulative and no waiver or consent, given or extended to the other
party, shall extend to or affect any obligation or right not expressly waived or
consented to.
SECTION 8.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon each of the parties and their heirs, executors, successors and assigns and
shall inure to the benefit of and be binding upon each of the parties and their
successors and assigns.
SECTION 8.3. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by the parties herein, whether or not in
connection with the Closing Date, will survive the closing and the delivery of
this Agreement.
SECTION 8.4. SEVERABILITY. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision will not affect the
validity or unenforceability of any remaining portion, which remaining portion
will remain in force and effect as if this Agreement had been executed with the
invalid portion thereof eliminated and it is hereby declared the intention of
the parties hereto that they would have executed the remaining portion of this
Agreement without including therein any such part or portion which may, for any
reason, be hereafter declared invalid or unenforceable.
SECTION 8.5. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with Delaware law.
SECTION 8.6. SUBMISSION TO JURISDICTION. The parties hereby irrevocably
submit to the jurisdiction of the courts of the Commonwealth of Massachusetts
for the purpose of any legal action or proceeding in any such court with respect
to, or arising out of, this Agreement or any other agreement, contract or
instrument executed and delivered in connection therewith.
SECTION 8.7. CAPTIONS. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
10
<PAGE>
SECTION 8.8. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each executed counterpart constituting air original but all
together only one agreement.
SECTION 8.9. ENTIRE AGREEMENT. This Agreement and the other documents
delivered under it constitute the full and entire understanding and agreement
between the parties with respect to the subject matter of this Agreement and
such other documents, and supercedes all previous agreement and understandings,
written or oral, concerning the subject matter of this Agreement and such other
documents.
SECTION 8.10. AMENDMENT AND WAIVER. This Agreement may be amended only
by a writing executed by each of the parties hereto. No waiver of compliance
with any provision or condition hereof, and no consent provided for herein,
shall be effective unless evidenced by an instrument in writing duly executed by
the party sought to be charged therewith. No failure on the part of any party to
exercise, and no delay in exercising, any of its rights hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise by any party of
any right preclude any other or future exercise thereof or the exercise of any
other right.
SECTION 8.11. TAX CONSEQUENCES. The parties each acknowledge and agree
that they have sought independent advice as to the tax consequences of the
transactions contemplated hereby, and that no party hereto makes any
representation or warranty, express or implied, to any other party with respect
thereto.
SECTION 8.12. ASSIGNMENT. No party shall assign or attempt to assign
any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of each of the other parties hereto.
SECTION 8.13. NOTICES, ETC. Each notice, report, demand, waiver,
consent and other communication required or permitted to be given hereunder
shall be in writing and shall be sent (a) by registered or certified first-class
mail, postage prepaid and return receipt requested, (b) by Federal Express or
comparable overnight courier, or (c) by telecopier, addressed as follows:
If to HOLDINGS: John Foraker
Homegrown Holdings Corp.
854 "A" Street
Davis, CA 95616
with a copy to: Dickenson, Peatman & Fogarty
809 Coombs Street
Napa, CA 94559
Attn: C. Richard Lemon, Esq.
Telecopier: (707) 255-6876
If to SELLER: Ann E. Withey
P.O. Box 128
Hampton, CT 06247
Telecopier: 860-455-0498
11
<PAGE>
with a copy to: Bromberg & Sunstein LLP
125 Summer Street
Boston, MA 02110
Attn: Thomas C. Carey, Esq.
Telecopier: (617) 443-9292
SECTION 8.14. ATTORNEYS' FEES. In the event any party incurs costs in
enforcing this Agreement, the prevailing party in any subsequent litigation
shall be entitled to full reimbursement of their expenses of enforcement
including attorneys' fees. This right shall survive and not merge into any
judgment obtained by a party hereto.
SECTION 8.15. NO THIRD PARTY BENEFICIARY. The provisions of this
Agreement are for the benefit only of the parties hereto, and no third party may
seek to enforce, or benefit from, these provisions. The parties specifically
disavow any desire or intention to create any third party beneficiary hereunder,
and specifically declare that no person or entity, except for the parties and
their successors-in-interest, shall have the right hereunder, nor any right or
enforcement hereof.
SECTION 8.16. NO RELIANCE ON OTHER INFORMATION. Except for the
representations and warranties in this Agreement, neither HOLDINGS nor SELLER
nor other person acting for them makes any other representation or warranty,
express or implied, with respect to the transactions contemplated by the
Agreement, whether oral or written, whether by HOLDINGS or SELLER or any of
their representatives or agents or any other person.
* * * * * * * * * *
12
<PAGE>
WHEREAS the parties enter into this Agreement on the date set forth
above.
HOMEGROWN HOLDINGS CORP.
By: /s/ John Foraker
-----------------------------
Title: President
--------------------------
SELLER
/s/ Ann E. Withey
--------------------------------
Ann E. Withey, individually
13
EXHIBIT 10.58
-------------
IRREVOCABLE PROXY AGREEMENT
This Irrevocable Proxy Agreement is made as of December 2, 1999, by and
between Ann E. Withey ("Withey"), Homegrown Holdings Corp. ("Holdings") and
_____________________ ("Agent").
1. DELIVERY OF IRREVOCABLE PROXY. Pursuant to the terms of the Stock
Collar Agreement dated the date hereof, between Withey and Holdings (the "Stock
Collar Agreement"), Withey hereby appoints Agent, a representative of Holdings,
the true and lawful substitute, attorney and proxy, with full power of
substitution, of Withey with respect to the 852,903 shares of the common stock
("the Shares") of Annie's Homegrown, Inc., a Delaware corporation
("Corporation") which are subject to the Stock Collar Agreement and are not
being transferred to Holdings as of the date hereof, for, and in the name, place
and stead of Withey, to vote, grant or consent according to the number of votes
which Withey would then be entitled to cast with respect to the Shares, and with
all the powers which Withey would be entitled to exercise with respect to the
Shares, if personally present, at any meeting of the shareholders of the Company
or any action taken or consent granted by shareholders of the Company, between
the date hereof and the termination of the proxy granted herein, as described
below, and does hereby revoke all proxies heretofore given by Withey as a
shareholder in said Company with respect to the Shares.
2. IRREVOCABLE PROXY. The proxy granted hereby shall continue for ten
years from the date hereof, in full force and effect until December 1, 2009, and
shall be irrevocable unless terminated in accordance with Section 3 hereof. The
agreement may be extended for successive ten-year periods. Throughout such
periods the Agent shall have the exclusive right to vote upon such shares or to
give written consents in lieu of voting thereon, subject to any limitation on
the right to vote contained in the Certificate of Incorporation or other
certificate filed pursuant to law, in person or proxy and at all meetings of the
Corporation's shareholders, and in all proceedings wherein the vote or written
consent of shareholders may be required or authorized by law.
3. TERMINATION OF PROXY BY WITHEY. The proxy granted herein shall
terminate five (5) days after Withey gives notice to the Agent and to Holdings
of any of the following events: (a) Holdings fails to exercise any installment
of the "Call Option," as defined in Section 1.1 of the Stock Collar Agreement,
within fifteen (15) days of having the right to do so, and such failure
continues for five (5) days after notice from Withey that the Call Option has
not been exercised, or (b) in the event of any other default by Holdings under
the Stock Collar Agreement or the Pledge and Escrow Agreement, dated this date,
between Holdings, Withey and Andrew M. Martin (the "Pledge Agreement"), which
Holdings fails to cure in the applicable notice periods contained therein.
4. OTHER TERMINATION OF PROXY. The proxy shall also terminate with
respect to any and all Shares which are transferred to Holdings pursuant to the
Stock Collar Agreement.
5. LIABILITY. The Agent shall use its best judgment in voting the stock
held by it, but shall not be liable for the consequence of any vote cast, or
consent given by it, in good faith, and in the absence of gross negligence.
<PAGE>
6. CHOICE OF LAW. This Agreement and the proxy given hereby shall be
governed by and construed in accordance with Delaware law. The parties hereby
irrevocably submit to the jurisdiction of the courts of the State of Delaware
for the purpose of any legal action or proceeding in any such court with respect
to, or arising out of, this Agreement or any other agreement, contract or
instrument executed and delivered in connection therewith
7. ATTORNEYS' FEES. In the event any party incurs costs in enforcing
this Agreement, the prevailing party in any subsequent litigation shall be
entitled to full reimbursement of their expenses of enforcement including
attorneys' fees. This right shall survive and not merge into any judgment
obtained by a party hereto whereof the parties have signed this Agreement on the
date set forth above.
8. ENTIRE AGREEMENT. This Agreement, along with the Stock Collar
Agreement and the Pledge Agreement, constitute the full and entire understanding
and agreement between the parties with respect to the subject matter of this
Agreement and such other documents, and supercedes all previous agreement and
understandings, written or oral, concerning the subject matter of this
Agreement.
WHEREFOR the parties enter into this Agreement on the date set forth
above.
--------------------------------
HOMEGROWN HOLDINGS CORP.
By: /s/ John Foraker
------------------------------
Title: President
--------------------------
ANN E. WITHEY
/s/ Ann E. Withey
---------------------------------
Ann E. Withey, individually
AGENT
---------------------------------
2
EXHIBIT 10.59
-------------
AMENDMENT TO
STOCK PURCHASE AND LOAN AGREEMENT
Reference is made to that certain Stock Purchase and Loan Agreement
(the "Original Loan Agreement"), dated as of December 21, 1998 by and between
ANNIE'S HOMEGROWN, INC. (the "Company"), a Delaware corporation and ANN E.
WITHEY ("Key Employee").
This Amendment to the Original Loan Agreement is made as of November
__, 1999 by and between the Company and Key Employee. Capitalized terms not
defined in this Amendment shall have the meaning given to them in the Original
Loan Agreement.
BACKGROUND
----------
A. Key Employee and the Company entered into the Original Loan
Agreement to enable Key Employee to purchase shares of Company Common Stock
pursuant to options that previously were granted by the Company to Key Employee.
B. Pursuant to the Original Loan Agreement, Key Employee borrowed
$71,978.10 from the Company (the "Loan").
C. Key Employee and the Company wish to amend the Original Loan
Agreement as set forth herein.
AGREEMENT
---------
IN CONSIDERATION OF THE FOREGOING BACKGROUND AND THE MUTUAL AGREEMENTS
OF THE PARTIES SET FORTH IN THIS AMENDMENT, THE COMPANY AND KEY EMPLOYEE AGREE
AS FOLLOWS:
SECTION 1. AMENDMENT TO ACCELERATION CLAUSE.
(A) Key Employee and Company hereby amend the Original Loan
Agreement to strike the first sentence of Section 8.4, and to replace that
sentence with the following text:
In the event that (x) the Company exercises its right to buy
back the Shares from Key Employee pursuant to Section 8.1 of
this Agreement, and (y) the Key Employee's employment has been
terminated for Good Cause (other than as a result of her death
or by her voluntary termination), then any outstanding
Principal Amount and any applicable Interest will be
immediately due and payable and shall be applied against
amounts due to Key Employee for purchase of Shares.
(B) Key Employee and Company hereby amend the Original Loan
Agreement to strike the word "either" in the second sentence of 8.4, and replace
that phrase with "(but is not obligated to)".
A. THE PURPOSE OF THIS SECTION IS TO WAIVE THE COMPANY'S RIGHT TO
ACCELERATE THE MATURITY DATE OF THE LOAN IN THE EVENT THAT THE
KEY
<PAGE>
EMPLOYEE IS TERMINATED AS A RESULT OF HER DEATH, BY HER
VOLUNTARY TERMINATION OR OTHERWISE NOT FOR GOOD CAUSE.
SECTION 2. RATIFICATION. In all other respects, the Original Loan
Agreement is hereby ratified and confirmed.
SECTION 3. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which will be considered an original and each of which will constitute
one and the same document.
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Paul B. Nardone
------------------------------
Paul B. Nardone, President and
Chief Operating Officer
EXHIBIT 10.60
-------------
THIRD AMENDMENT TO
STOCK PURCHASE AND LOAN AGREEMENT
Reference is made to that certain Stock Purchase and Loan Agreement
(the "Original Loan Agreement"), dated as of October 1, 1997, and amended by an
Amendment to Stock Purchase and Loan Agreement dated December 31, 1997 (the
"First Amendment"), and an Amendment dated as of December 21, 1998 (the "Second
Amendment") by and between ANNIE'S HOMEGROWN, INC. (the "Company"), a Delaware
corporation and Ann E. Withey ("Key Employee").
This third amendment ("Third Amendment") to the Original Loan
Agreement, as amended, is made as of September 30, 1999 by and between the
Company and Key Employee. Capitalized terms not defined in this Third Amendment
shall have the meaning given to them in the Original Loan Agreement.
BACKGROUND
----------
A. Key Employee and the Company entered into the Original Loan
Agreement to enable Key Employee to purchase shares of Company Common Stock
pursuant to options that previously were granted by the Company to Key Employee.
B. Pursuant to the Original Loan Agreement, Key Employee borrowed
$67,641.60 from the Company (the "Loan").
C. The Original Loan Agreement stated in Section 6 thereof that the
Principal Amount of the loan will be repaid by the Company under certain
circumstances. A computational error was made in computing the amounts of such
repayments.
D. Key Employee and the Company pursuant to the First Amendment amended
the Original Loan Agreement to correct this error, among other things.
E. Key Employee and the Company pursuant to the Second Amendment
clarified the language in the Original Loan Agreement relating to the Company's
rights upon a change of control and termination of Key Employee's employment.
F. The terms of the Original Loan Agreement provide for annual interest
at the rate of 6.34%, the mid-term Applicable Federal Rate in effect for October
1997, with interest is payable annually on October 1. The entire outstanding
principal of Loan is due on October 1, 2002.
G. Pursuant to Section 6.2(b) of the Original Loan Agreement, as
amended, the Company is required to forgive $16,910.40 of the Principal Amount
in the event that Key Employee is employed by the Company as of September 30,
1999.
H. Key Employee was employed by the Company as of that date and is thus
entitled to forgiveness of a portion of the Loan as described above.
I. Key Employee wishes to waive that forgiveness.
J. Key Employee and the Company wish to further amend the Original Loan
Agreement, as amended, as set forth herein.
<PAGE>
AGREEMENT
---------
IN CONSIDERATION OF THE FOREGOING BACKGROUND AND THE MUTUAL AGREEMENTS
OF THE PARTIES SET FORTH IN THIS THIRD AMENDMENT, THE COMPANY AND KEY EMPLOYEE
AGREE AS FOLLOWS:
SECTION 1. WAIVER OF FORGIVENESS. Key Employee and Company hereby further amend
the Original Loan Agreement to strike Section 6.2(b), as amended, in its
entirety.
THE PURPOSE OF THIS SECTION IS TO WAIVE KEY EMPLOYEE'S RIGHTS TO
FORGIVENESS OF THE PRINCIPAL OF THE LOAN WITH RESPECT TO SEPTEMBER 30, 1999
ONLY. KEY EMPLOYEE RECOGNIZES THAT, BY WAIVING THIS SECTION 6.2(B), THE AMOUNT
OTHERWISE TO BE FORGIVEN WILL COME DUE ON THE MATURITY DATE (UNLESS OTHERWISE
ACCELERATED AS PROVIDED IN THE ORIGINAL LOAN AGREEMENT).
SECTION 2. AMENDMENT TO ACCELERATION CLAUSE.
(a) Key Employee and Company hereby further amend the Original Loan
Agreement, as amended, to strike the first sentence of Section 8.4, and to
replace that sentence with the following text:
In the event that (x) the Company exercises its right to buy
back the Shares from Key Employee pursuant to Section 8.1 of
this Agreement, and (y) the Key Employee's employment has been
terminated for Good Cause (other than as a result of her death
or by her voluntary termination), then any outstanding
Principal Amount and any applicable Interest will be
immediately due and payable and shall be applied against
amounts due to Key Employee for purchase of Shares.
(b) Key Employee and Company hereby further amend the Original Loan
Agreement, as amended, to strike the word "either" in the second sentence of
8.4, and replace that phrase with "(but is not obligated to)".
THE PURPOSE OF THIS SECTION IS TO WAIVE THE COMPANY'S RIGHT TO
ACCELERATE THE MATURITY DATE OF THE LOANS IN THE EVENT THAT THE KEY EMPLOYEE IS
TERMINATED AS A RESULT OF HER DEATH, BY HER VOLUNTARY TERMINATION OR OTHERWISE
NOT FOR GOOD CAUSE.
SECTION 3. RATIFICATION. In all other respects, the Original Loan Agreement, as
amended, is hereby ratified and confirmed.
SECTION 4. COUNTERPARTS. This Third Amendment may be executed in counterparts,
each of which will be considered an original and each of which will constitute
one and the same document.
<PAGE>
IN WITNESS WHEREOF, this Third Amendment has been executed as of the
date first set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Paul B. Nardone
------------------------------
Paul B. Nardone, President and
Chief Operating Officer
KEY EMPLOYEE:
/s/ Ann E. Withey
------------------------------
Ann E. Withey
EXHIBIT 10.61
-------------
================================================================================
STOCK COLLAR AGREEMENT
HOMEGROWN HOLDINGS CORP.
A DELAWARE CORPORATION
AND
ANDREW M. MARTIN
RE:
PUT AND CALL OPTIONS FOR 1,677,691 SHARES OF
COMMON STOCK OF ANNIE'S HOMEGROWN, INC.
DATED AS OF
DECEMBER 2, 1999
================================================================================
<PAGE>
This STOCK COLLAR AGREEMENT (the "Agreement") is entered into as of
this 2nd day of December, 1999, by and between HOMEGROWN HOLDINGS CORP., a
Delaware corporation, ("HOLDINGS") and ANDREW M. MARTIN ("SELLER").
NOW THEREFORE the parties hereto agree as follows:
SECTION 1. STOCK COLLAR.
SECTION 1.1. STOCK COLLAR. HOLDINGS is hereby granted an option (the
"Call Option") to purchase from SELLER 1,677,691 shares (the "Shares") of common
stock, $.001 par value per share (the "Common Stock"), of ANNIE'S HOMEGROWN,
INC., a Delaware corporation (the "COMPANY"); and SELLER shall have an option
(the "Put Option") (the Call Option and the Put Option are together called the
"Collar") to require HOLDINGS to purchase the Shares from him. The Call Option
shall be exercisable at the times and in the amounts described below; and the
Put Option shall be exercisable with respect to those Shares with respect to
which the Call Option has become exercisable fifteen (15) days after the Call
Option has become exercisable.
SECTION 1.2. EXERCISE PRICE. The exercise price of the Call Option
shall be $2.00 per share; and the exercise price for the Put Option shall be
$1.92 per share (in each case as adjusted for stock dividends or stock splits).
If, however, the Internal Revenue Service adopts regulations under section 1259
of the Code that (a) retroactively apply to this Collar, and (b) would
characterize this Collar as a constructive sale because of the closeness of the
exercise prices, then the Put Option exercise price shall be adjusted
prospectively as mutually agreed between the parties hereto so as to widen the
range of the Collar to the extent necessary to avoid such a characterization,
but in no case shall the Call Option exercise price be above $2.00 or the Put
Option exercise price be below $1.60 per share (in each case as adjusted for
stock dividends or stock splits).
SECTION 1.3. TRANSFER INSTRUCTIONS. Transfer of the Shares is currently
restricted by Irrevocable Stock Transfer Instructions dated July 27, 1995 (the
"Original Instructions") directed to the Bank of Boston as the COMPANY's
transfer agent; as amended pursuant to a First Addendum thereto also dated as of
July 27, 1995 (the "Additional Instructions"). The Original and Additional
Instructions (the "Instructions") were required by the Massachusetts Division of
Securities in connection with the direct public offering of the COMPANY's common
stock that occurred in 1995.
The Original Instructions apply to 750,000 Shares owned by SELLER and
750,000 shares of Common Stock owned by Ann E. Withey ("WITHEY") (the "Covered
Shares"). Among several methods for the sale of the Covered Shares, Section 2.a.
of the Original Instructions permit the sale of 25% of the Covered Shares on
each of the 6th, 7th, 8th and 9th anniversaries of the Original Instructions.
Section 2(i) of the Additional Restrictions apply to any other shares of Common
Stock (besides the Covered Shares) owned by SELLER; and among several methods
for the sale of such shares, permit the sale of such shares at the rate of 1% of
the shares of the COMPANY's outstanding common stock during any three-month
period.
2
<PAGE>
SECTION 1.4. EXERCISE DATES. The exercise dates of the Collar shall
occur so as to apply to the Shares as quickly as possible under Section 2(a) of
the Original Instructions and Section 2(i) of the Additional Instructions as now
in effect. Such exercise shall be as follows:
(a) with respect to the Covered Shares, the exercise dates will be
July 27, 2001, 2002, 2003 and 2004 (the "Covered Share Exercise
Dates"), and the SELLER shall receive as purchase price for the
Covered Shares with respect to which a Call or Put Option is
exercised in connection with each Covered Share Exercise Date an
amount equal to the applicable exercise price set forth in
Section 1.2 above multiplied by the 187,500 Covered Shares (as
adjusted for stock dividends or stock splits) which shall become
available under the Instructions on each Covered Share Exercise
Date; and
(b) with respect to all other Shares owned by the SELLER, the
exercise dates shall be the Closing Date, as hereinafter defined,
and the date of each three-month anniversary of the Closing Date
thereafter (the "Other Share Exercise Dates"), and the SELLER
shall receive as the purchase price for the Shares with respect
to which a Call or Put Option is exercised in connection with the
Other Share Exercise Dates an amount equal to the applicable
exercise price set forth in Section 1.2 above multiplied by the
one percent (1%) of the total number of shares of Common Stock
issued and outstanding on the date hereof (as adjusted for stock
dividends or stock splits) which shall become available on each
Other Share Exercise Date.
SECTION 1.5. TRANSFER OF THE SHARES. The actual transfer and sale of
and payment for the Shares shall occur as permitted by Section 2(a) of the
Original Instructions and Section 2(i) of the Additional Instructions as in
effect on the date hereof, provided, however, that the title and beneficial
interest of the Shares shall transfer to HOLDINGS at such earlier time as the
Commonwealth of Massachusetts permits and the applicable Call Option is
exercised (any Shares so transferred are hereinafter referred to as "Early
Shares"), provided, further, that payment for the Early Shares shall
nevertheless be made in accordance with the schedule set forth in Section 1.4
above, and any payments due on the Early Shares shall be represented by delivery
by HOLDINGSprior to transfer of the Early Shares of a non-interest-bearing
Promissory Note for the principal sum due for the Early Shares (which amount
shall equal $2.00 per Early Share with respect to which a Call Option is
exercised pursuant hereto), in a form mutually agreed to by HOLDINGS and the
SELLER. As the Shares become transferable to HOLDINGS, either as the result of
an exercise of a Call Option by HOLDINGS, or as the result of the exercise of a
Put Option by the Seller, SELLER shall transfer or cause the transfer of the
Shares to the escrow agent (the "Escrow Agent") under the Pledge Agreement
described in Section 1.6 below, to hold on behalf HOLDINGS, subject to a pledge
for the benefit of SELLER and WITHEY as described therein. Until the Shares are
sold and transferred, they shall be subject to an irrevocable proxy pursuant to
an agreement about such proxy between HOLDINGS and SELLER (the "Irrevocable
Proxy Agreement") and pursuant to which a representative of HOLDINGS shall act
as the proxy for SELLER and vote the Shares commencing at the Closing, as
defined herein. The Irrevocable Proxy shall terminate if and when HOLDINGS fails
to exercise any installment of the Call Option within fifteen (15) days of
having the right to do so, and such failure continues for five (5) days after
notice from SELLER that the Call Option has not been exercised.
3
<PAGE>
SECTION 1.6. SECURITY. To secure payment by HOLDINGS of the purchase
price for the Shares, HOLDINGS shall enter into a Pledge Agreement (the "Pledge
Agreement") benefiting SELLER and WITHEY pursuant to which any Shares owned by
HOLDINGS shall be pledged together with the subordinated promissory note of the
COMPANY and the preferred stock of the COMPANY which HOLDINGS is acquiring
concurrently with the Closing under this Agreement (collectively the
"Collateral"). The Pledge Agreement shall be substantially in the form attached
hereto as Exhibit "A" hereto, providing for the customary protections and
remedies in favor of the parties and shall remain in existence until the
purchase price for the Shares has been paid in full (provided, however, that as
such purchase price is paid, collateral shall be released from the Pledge
Agreement so long as the aggregate value of the remaining collateral, not
including any Early Shares within the collateral except to the extent payment
has actually been made for them, as further described in the Pledge Agreement,
is equal to 200% of the purchase price remaining to be paid). As additional
security, HOLDINGS shall obtain a standby letter of credit in the amount of
$300,000 for the benefit of SELLER in form to be mutually agreed to between
HOLDINGS and SELLER, such letter of credit (the "Letter of Credit") to be issued
by a nationally-recognized banking institution with assets of at least $10
million. The Letter of Credit shall terminate after the payment by HOLDINGS to
SELLER of eight (8) consecutive quarterly payments pursuant to Section 1.4
above.
SECTION 2. CLOSING.
SECTION 2.1. THE CLOSING DATE. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, on December 2, 1999 or on such other date as shall be agreed upon by the
parties (the "Closing Date"), the parties shall execute this Agreement, and
SELLER and HOLDINGS shall execute and deliver to each other an Irrevocable Proxy
Agreement substantially in the form attached hereto as Exhibit "B" naming
HOLDINGS' chosen representative as the proxy (the "Proxy") to vote the Shares
during the life of the Irrevocable Proxy Agreement, in return for HOLDINGS'
promise to pay the purchase price and delivery of the Pledge Agreement securing
payment for the Shares.
The closing of the transactions under this Agreement (the "Closing")
shall take place at the offices of Kirkpatrick & Lockhart LLP, located at 75
State Street, Boston, MA, on the Closing Date. The Closing shall be deemed to
have been effective as of 11:59 p.m. on the Closing Date.
SECTION 2.2. DELIVERY AND TRANSFER. At the Closing, the parties shall
exchange executed copies of this Agreement and the Irrevocable Proxy Agreement
against the promise of payment therefor by HOLDINGS and delivery of the Pledge
Agreement as security for payment by HOLDINGS and in the case that HOLDINGS
exercises its Call Option with respect to the first set of Shares with respect
to which the Call Option has become exercisable, payment of the appropriate
amount due on such Shares.
SECTION 2.3. SUBSEQUENT DELIVERIES AND TRANSFERS. Upon each exercise of
a Call or Put Option, HOLDINGS shall deliver payment for the Shares as to which
the Call or Put Option to SELLER has been exercised within fifteen (15) days
after the date of exercise of such Option,
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and SELLER shall assign and deliver such Shares to HOLDINGS within fifteen (15)
days after receipt of payment therefor. HOLDINGS shall promptly cause the Shares
assigned and delivered to it to be transferred to it on the books of the
Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES BY SELLER
SELLER hereby represents and warrants except as disclosed on the
Schedule attached hereto, as of the date hereof as follows:
SECTION 3.1. POWER OF TRANSFER. SELLER has all necessary power and
authority to own, use and transfer the Shares and to transact the business being
conducted with HOLDINGS as permitted under the consistent with the Instructions.
SECTION 3.2. NO CONFLICT. Neither the execution and delivery of this
Agreement nor compliance with any of the provisions therein, nor the
consummation of the transactions contemplated thereby, will:
(a) conflict with or result in a breach of any provision of any
shareholder agreement;
(b) result in a default, or give rise to any right of termination,
cancellation or acceleration, under any term, condition or
provision of any contract, encumbrance or other instrument or
obligation to which SELLER, is a party or by which it or any
of the Shares may be bound; or
(c) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to SELLER, or any of the Shares.
SECTION 3.3. TITLE TO SHARES. SELLER has good and marketable title to
the Shares. Except as provided in the Instructions, the Shares are not subject
to any mortgage, pledge, lien, lease, security interest, encumbrance or
obligation not yet due and payable, which materially detracts from the value of
the Shares.
SECTION 3.4. COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery
and performance of and compliance with this Agreement, will not result in a
breach or violation of or constitute a material default under any legal
instrument or document nor create any violation, breach or default which
singularly or in the aggregate would (a) have a material adverse affect on the
Shares; (b) require any consent or waiver (which has not been obtained), or (c)
result in the creation of a pledge, lien, encumbrance, or charge on any of the
Shares (except as provided herein under the Pledge Agreement).
SECTION 3.5. LEGAL PROCEEDINGS, BUSINESS, ETC. There is no legal,
equitable, administrative or arbitration action, suit, proceeding or known
investigation pending or, to the best knowledge of Seller, threatened against or
affecting SELLER or any of the Shares. There is no judgment, decree, injunction,
rule or order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against SELLER which would
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affect the Shares and, to the best knowledge of SELLER, there is no basis for
any such action, suit, proceeding or investigation. SELLER is not in default
with respect to any order, injunction or decree of any court or governmental
department, commission, board or agency, and no such order, injunction or decree
is now in effect which restrains the sale of the Shares.
SECTION 3.6. CONSENTS AND APPROVALS. No consent, approval, order,
authorization or registration, qualification, designation, declaration, or
filing with any person including any federal, state, or local governmental
authority on SELLER's part is required in connection with the valid execution,
delivery and performance of this Agreement or the consummation of any other
transaction contemplated by hereby, except registration and qualification (or
filings with respect to exemptions from qualification) under the Federal
securities laws and applicable Delaware laws, which qualifications will have
been obtained and will be effective on the Closing Date unless adequate
exemptions from such qualifications are then available.
SECTION 4. REPRESENTATIONS AND WARRANTIES BY HOLDINGS.
HOLDINGS hereby represents and warrants to SELLER, as of the date
hereof as follows:
SECTION 4.1. ORGANIZATION. HOLDINGS is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
HOLDINGS has all necessary power and authority to own, use and transfer its
properties and assets and to transact the business being conducted under this
Agreement and the Irrevocable Proxy Agreement, as well as the Investment and
Stock Purchase Agreement to be entered into between HOLDINGS and the COMPANY
(the "Investment and Stock Purchase Agreement").
SECTION 4.2. AUTHORIZATION. HOLDINGS has all necessary corporate power
and authority to enter into this Agreement as well, as the Investment and Stock
Purchase Agreement. Once this Agreement has been duly executed and delivered by
HOLDINGS it will constitute a legal, binding and valid obligation of HOLDINGS,
enforceable against HOLDINGS in accordance with its terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to creditor's rights generally or by equitable principles (whether
considered in an action at law or equity.)
SECTION 4.3. CONSENTS AND APPROVALS. No consent, approval,
authorization of, or declaration, filing or registration with, any person
including any federal, state or local governmental or regulatory authority, or
any other person or entity is required to be made or obtained by HOLDINGS in
connection with the execution, delivery and performance of this Agreement or the
Investment and Stock Purchase Agreement.
SECTION 4.4. NO CONFLICT OR VIOLATION. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will result in a violation of or a conflict with any provision of the
Certificate of Incorporation of HOLDINGS or a breach thereof, or a default
under, of any term or provision of any contract, agreement, indebtedness, lease,
commitment, license, franchise, permit, authorization, or concession to which
HOLDINGS is a party, which breach or default would have a material adverse
effect on
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<PAGE>
the business or financial condition of HOLDINGS or its ability to consummate the
transactions contemplated hereby.
SECTION 5. CONVENANTS.
SECTION 5.1. EXPENSES OF THE PARTIES. Except as otherwise expressly
provided in this Agreement, each of the parties hereto shall pay all of its
expenses incurred in connection with the preparation, negotiation, authorization
and consummation of this Agreement and the transactions contemplated hereby,
including all fees and expenses of agents, representatives, legal counsel and
accountants.
SECTION 5.2. FURTHER ASSURANCES. Each party shall cooperate with the
others, take such further action, and execute and deliver such further
documents, as may be reasonably requested by any other party in order to carry
out the terms and purposes of this Agreement.
SECTION 5.3. DIVIDENDS. The parties hereby acknowledge that until the
Shares are sold and transferred to HOLDINGS hereunder, any dividends on such
unsold Shares shall be for the account of SELLER.
SECTION 5.4. PROPORTIONATE EXERCISE OF CALL OPTIONS. Simultaneous with
the Closing of this Agreement, HOLDINGS is entering into a Stock Collar
Agreement with WITHEY (the "Withey Stock Collar Agreement"), pursuant to which
HOLDINGS may exercise a call option (the "Withey Call Option") similar to the
Call Option described herein with respect to 900,000 shares of Common Stock of
the Company owned by WITHEY (the "Withey Shares"). The Withey Call Option shall
be exercisable on the same dates as the Call Option under this Agreement.
HOLDINGS agrees, on each exercise date, until the purchase of all of the Shares
under this Agreement or the purchase of all of the shares under the Withey Stock
Collar Agreement, to exercise its Call Option under this Agreement and its call
option under the Withey Stock Collar Agreement with respect to the same number
of shares of Common Stock.
SECTION 6. CONDITIONS TO PERFORMANCE OBLIGATIONS.
SECTION 6.1. CONDITIONS TO HOLDINGS' PERFORMANCE OBLIGATIONS. The
obligations of HOLDINGS to complete the transactions provided for herein shall
be subject, at its election, to satisfaction on or before the Closing Date of
each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES: All representations and
warranties of Seller contained in this Agreement shall be true
and correct in all respects as of this date;
(b) SIMULTANEOUS CLOSING OF TRANSACTIONS WITH THE COMPANY. The
Investment and Stock Purchase Agreement and the other agreements
contemplated thereby, shall close simultaneously with the Closing
under this Agreement;
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(c) PRE-CLOSING OBLIGATIONS: SELLER shall have performed all
obligations required to be performed under this Agreement, the
performance of which has not been waived by HOLDINGS;
(d) CONSENTS FOR HOLDINGS. All notices, filings, consents, waivers
and approvals required to be obtained by HOLDINGS concerning this
Agreement and the Investment and Stock Purchase Agreement shall
have been given, made or obtained, as the case may be, by
HOLDINGS;
(e) NO BAR: There shall not be in effect any judgment, decree or
order of, or position taken by, any court or administrative body
of competent jurisdiction, nor shall there have been any action,
suit, proceeding or known investigation instituted or threatened,
nor shall any law or regulation have been enacted or any action
taken thereunder, which would, in HOLDINGS' reasonable judgment,
restrain or prohibit, make illegal, or subject HOLDINGS to
material damage as a result of, the consummation of the
transactions contemplated by this Agreement;
(f) CONSENT OF HOLDERS OF OTHER SECURITIES: On or prior to the
Closing Date, any consent or approvals required to be obtained
from any holder or holders of any outstanding securities of
COMPANY which shall be necessary to permit the consummation of
the transactions contemplated by the Investment and Stock
Purchase Agreement between COMPANY and HOLDINGS shall have been
obtained and all such consents or amendments shall be
satisfactory in form and substance to HOLDINGS.
(g) SIMULTANEOUS CLOSINGS. The Withey Stock Collar Agreement and an
Irrevocable Proxy Agreement (the "Withey Irrevocable Proxy
Agreement") between HOLDINGS and WITHEY shall close
simultaneously with the Closing under this Agreement.
(h) IRREVOCABLE PROXY. The Irrevocable Proxy Agreement between SELLER
and HOLDINGS substantially in the form attached hereto as Exhibit
"B" shall be in effect.
(i) OTHER MATTERS: HOLDINGS shall have received such other
instruments and documents as shall have been reasonably requested
by counsel to HOLDINGS on or before the Closing Date.
SECTION 6.2. CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligations
of SELLER to complete the transactions provided for herein shall be subject, at
its election, to satisfaction on or before the Closing Date of each of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES: All representations and
warranties of HOLDINGS contained in this Agreement shall be true
and correct in all respects as of the date hereof and as of the
Closing Date as though made on and as of the Closing Date (except
as may be otherwise provided in this Agreement); and
8
<PAGE>
(b) PRE-CLOSING OBLIGATIONS: HOLDINGS shall have performed all
obligations required to be performed by it hereunder, the
performance of which has not been waived by SELLER.
(c) DUE AUTHORIZATION: HOLDINGS execution and delivery of this
Agreement, its compliance with the provisions hereof and the
consummation of all of the transactions contemplated hereby shall
have been duly and validly authorized by all necessary action on
the part of HOLDINGS, and SELLER shall have received a duly
certified copy of all actions taken by HOLDINGS' Board of
Directors, chief executive officer and the chief financial
officer effecting the same;
(d) CONSENTS BY HOLDINGS, ETC.: All notices, filings, consents,
waivers and approvals required to be obtained shall have been
given, made or obtained, as the case may be, by HOLDINGS, and
SELLER shall have received a true copy of each thereof;
(e) NO BAR: There shall not be in effect any judgment, decree or
order of, or position taken by, any court or administrative body
of competent jurisdiction, nor shall there have been any action,
suit, proceeding or known investigation instituted or threatened,
nor shall any law or regulation have been enacted or any action
taken thereunder, which would, in SELLER's reasonable judgment,
restrain or prohibit, make illegal, or subject SELLER to material
damage as a result of, the consummation of the transactions
contemplated hereby;
(f) SIMULTANEOUS CLOSINGS OF OTHER TRANSACTIONS. The Investment and
Stock Purchase Agreement, and the other agreements contemplated
thereby, and the Withey Stock Collar Agreement and the Withey
Irrevocable Proxy Agreement, shall close simultaneously with the
Closing under this Agreement.
(g) OTHER MATTERS: SELLER shall have received such other instruments
and documents as shall have been reasonably requested by them on
or before the Closing Date.
SECTION 7. INVESTMENT REPRESENTATION AND RESTRICTIONS.
SECTION 7.1. RESTRICTED SECURITIES. HOLDINGS understands that the
securities it is purchasing are characterized as restricted securities under
Federal laws because they were acquired from SELLER in a transaction not
involving a public offering and that under such laws and applicable regulations
the securities may be resold without registration under Federal securities laws
only in certain limited circumstances. HOLDINGS represents, and in entering into
this Agreement, SELLER understands, that HOLDINGS is acquiring the Shares for
the purpose of investment and not with a view to the distribution thereof, and
that HOLDINGS has no present intention of selling, negotiating or otherwise
disposing of the Shares; it being
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<PAGE>
understood, however, that the disposition of HOLDINGS' property will at all
times be and remain within its control.
SECTION 7.2. NOT FOREIGN INVESTOR. HOLDINGS is not a foreign investor
as defined by the United States Department of Commerce, and therefore HOLDINGS
will not be required to file any Form BE-13 with the Department of Commerce.
SECTION 7.3. LEGENDS. It is further understood by HOLDINGS that the
certificates evidencing the Shares shall be endorsed with the following legends,
or a legend to similar effect:
(a) FEDERAL LEGEND. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, (THE "ACT") AND ARE "RESTRICTED SECURITIES" AS DEFINED
IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE
SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (1) IN
CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SHARES UNDER THE ACT, (2) IN COMPLIANCE WITH RULE 144, OR (3)
UNDER AN OPINION OF COUNSEL, SATISFACTORY TO ANNIE'S HOMEGROWN,
INC. THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO
SAID SALE, OFFER OR DISTRIBUTION.
(b) OTHER LEGENDS. Any other legends required by applicable state
blue sky law which shall not be inconsistent with the
Instructions.
SECTION 8. MISCELLANEOUS.
SECTION 8.1. POWERS AND RIGHTS NOT WAIVED; REMEDIES CUMULATIVE. No
delay or failure on the part of either party in the exercise of any power or
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of the same preclude any other or further exercise thereof, or
the exercise of any other power or right, and the rights and remedies of each
party are cumulative and no waiver or consent, given or extended to the other
party, shall extend to or affect any obligation or right not expressly waived or
consented to.
SECTION 8.2. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon each of the parties and their heirs, executors, successors and assigns and
shall inure to the benefit of and be binding upon each of the parties and their
successors and assigns.
SECTION 8.3. SURVIVAL OF COVENANTS AND REPRESENTATIONS. All covenants,
representations and warranties made by the parties herein, whether or not in
connection with the Closing Date, will survive the closing and the delivery of
this Agreement.
SECTION 8.4. SEVERABILITY. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision will not affect the
validity or unenforceability of any remaining portion, which remaining portion
will remain in force and effect as if this
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Agreement had been executed with the invalid portion thereof eliminated and it
is hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein any
such part or portion which may, for any reason, be hereafter declared invalid or
unenforceable.
SECTION 8.5. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with ]Delaware law.
SECTION 8.6. SUBMISSION TO JURISDICTION. The parties hereby irrevocably
submit to the jurisdiction of the courts of the Commonwealth of Massachusetts
for the purpose of any legal action or proceeding in any such court with respect
to, or arising out of, this Agreement or any other agreement, contract or
instrument executed and delivered in connection therewith.
SECTION 8.7. CAPTIONS. The descriptive headings of the various Sections
or parts of this Agreement are for convenience only and shall not affect the
meaning or construction of any of the provisions hereof.
SECTION 8.8. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each executed counterpart constituting air original but all
together only one agreement.
SECTION 8.9. ENTIRE AGREEMENT. This Agreement and the other documents
delivered under it constitute the full and entire understanding and agreement
between the parties with respect to the subject matter of this Agreement and
such other documents, and supercedes all previous agreement and understandings,
written or oral, concerning the subject matter of this Agreement and such other
documents.
SECTION 8.10. AMENDMENT AND WAIVER. This Agreement may be amended only
by a writing executed by each of the parties hereto. No waiver of compliance
with any provision or condition hereof, and no consent provided for herein,
shall be effective unless evidenced by an instrument in writing duly executed by
the party sought to be charged therewith. No failure on the part of any party to
exercise, and no delay in exercising, any of its rights hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise by any party of
any right preclude any other or future exercise thereof or the exercise of any
other right.
SECTION 8.11. TAX CONSEQUENCES. The parties each acknowledge and agree
that they have sought independent advice as to the tax consequences of the
transactions contemplated hereby, and that no party hereto makes any
representation or warranty, express or implied, to any other party with respect
thereto.
SECTION 8.12. ASSIGNMENT. No party shall assign or attempt to assign
any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of each of the other parties hereto.
SECTION 8.13. NOTICES, ETC. Each notice, report, demand, waiver,
consent and other communication required or permitted to be given hereunder
shall be in writing and shall be sent
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(a) by registered or certified first-class mail, postage prepaid and return
receipt requested, (b) by Federal Express or comparable overnight courier, or
(c) by telecopier, addressed as follows:
If to HOLDINGS: John Foraker
Homegrown Holdings Corp.
854 "A" Street
Davis, CA 95616
with a copy to: Dickenson, Peatman & Fogarty
809 Coombs Street
Napa, CA 94559
Attn: C. Richard Lemon, Esq.
Telecopier: (707) 255-6876
If to SELLER: Andrew Martin
P.O. Box 8487
Tauroa Station
Matangi RD, Havelock North
New Zealand
Telecopier: 011-646-874-7735
With a copy to: Davis & Gilbert LLP
1740 Broadway
New York, NY 10019
Attn: Michael Lasky, Esq.
Telecopier: (212) 468-4888
SECTION 8.14. ATTORNEYS' FEES. In the event any party incurs costs in
enforcing this Agreement, the prevailing party in any subsequent litigation
shall be entitled to full reimbursement of their expenses of enforcement
including attorneys' fees. This right shall survive and not merge into any
judgment obtained by a party hereto.
SECTION 8.15. NO THIRD PARTY BENEFICIARY. The provisions of this
Agreement are for the benefit only of the parties hereto, and no third party may
seek to enforce, or benefit from, these provisions. The parties specifically
disavow any desire or intention to create any third party beneficiary hereunder,
and specifically declare that no person or entity, except for the parties and
their successors-in-interest, shall have the right hereunder, nor any right or
enforcement hereof.
SECTION 8.16. NO RELIANCE ON OTHER INFORMATION. Except for the
representations and warranties in this Agreement, neither HOLDINGS nor SELLER
nor other person acting for them makes any other representation or warranty,
express or implied, with respect to the transactions contemplated by the
Agreement, whether oral or written, whether by HOLDINGS or SELLER or any of
their representatives or agents or any other person.
* * * * * * * * *
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<PAGE>
WHEREAS the parties enter into this Agreement on the date set forth
above.
HOMEGROWN HOLDINGS CORP.
By: /s/ John Foraker
--------------------------------
Title: President
----------------------------
SELLER
/s/ Andrew M. Martin
-----------------------------------
ANDREW M. MARTIN
EXHIBIT 10.62
-------------
IRREVOCABLE PROXY AGREEMENT
This Irrevocable Proxy Agreement is made as of December 2, 1999, by and
between Andrew M. Martin ("Martin"), Homegrown Holdings Corp. ("Holdings") and
______________ ("Agent").
1. DELIVERY OF IRREVOCABLE PROXY. Pursuant to the terms of the Stock
Collar Agreement dated the date hereof, between Martin and Holdings (the "Stock
Collar Agreement"), Martin hereby appoints Agent, a representative of Holdings,
the true and lawful substitute, attorney and proxy, with full power of
substitution, of Martin with respect to the 1,677,691 shares of the common stock
("the Shares") of Annie's Homegrown, Inc., a Delaware corporation
("Corporation") which are subject to the Stock Collar Agreement, for, and in the
name, place and stead of Martin, to vote, grant or consent according to the
number of votes which Martin would then be entitled to cast with respect to the
Shares, and with all the powers which Martin would be entitled to exercise with
respect to the Shares, if personally present, at any meeting of the shareholders
of the Company or any action taken or consent granted by shareholders of the
Company, between the date hereof and the termination of the proxy granted
herein, as described below, and does hereby revoke all proxies heretofore given
by Martin as a shareholder in said Company with respect to the Shares.
2. IRREVOCABLE PROXY. The proxy granted hereby shall continue for ten
years from the date hereof, in full force and effect until December 1, 2009, and
shall be irrevocable unless terminated in accordance with Section 3 hereof. The
agreement may be extended for successive ten-year periods. Throughout such
periods the Agent shall have the exclusive right to vote upon such shares or to
give written consents in lieu of voting thereon, subject to any limitation on
the right to vote contained in the Certificate of Incorporation or other
certificate filed pursuant to law, in person or proxy and at all meetings of the
Corporation's shareholders, and in all proceedings wherein the vote or written
consent of shareholders may be required or authorized by law.
3. TERMINATION OF PROXY BY MARTIN. The proxy granted herein shall
terminate five (5) days after Martin gives notice to the Agent and to Holdings
of any of the following events: (a) Holdings fails to exercise any installment
of the "Call Option," as defined in Section 1.1 of the Stock Collar Agreement,
within fifteen (15) days of having the right to do so, and such failure
continues for five (5) days after notice from Martin that the Call Option has
not been exercised, or (b) in the event of any other default by Holdings under
the Stock Collar Agreement or the Pledge and Escrow Agreement, dated this date,
between Holdings, Martin and Ann E. Withey (the "Pledge Agreement"), which
Holdings fails to cure in the applicable notice periods contained therein.
4. OTHER TERMINATION OF PROXY. The proxy shall also terminate with
respect to any and all Shares which are transferred to Holdings pursuant to the
Stock Collar Agreement.
5. LIABILITY. The Agent shall use its best judgment in voting the stock
held by it, but shall not be liable for the consequence of any vote cast, or
consent given by it, in good faith, and in the absence of gross negligence.
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6. CHOICE OF LAW. This Agreement and the proxy given hereby shall be
governed by and construed in accordance with Delaware law. The parties hereby
irrevocably submit to the jurisdiction of the courts of the State of Delaware
for the purpose of any legal action or proceeding in any such court with respect
to, or arising out of, this Agreement or any other agreement, contract or
instrument executed and delivered in connection therewith
7. ATTORNEYS' FEES. In the event any party incurs costs in enforcing
this Agreement, the prevailing party in any subsequent litigation shall be
entitled to full reimbursement of their expenses of enforcement including
attorneys' fees. This right shall survive and not merge into any judgment
obtained by a party hereto whereof the parties have signed this Agreement on the
date set forth above.
8. ENTIRE AGREEMENT. This Agreement, along with the Stock Collar
Agreement and the Pledge Agreement, constitute the full and entire understanding
and agreement between the parties with respect to the subject matter of this
Agreement and such other documents, and supercedes all previous agreement and
understandings, written or oral, concerning the subject matter of this
Agreement.
WHEREFOR the parties enter into this Agreement on the date set forth
above.
--------------------------------
HOMEGROWN HOLDINGS CORP.
By: /s/ John Foraker
--------------------------------
Title: President
ANDREW M. MARTIN
/s/ Andrew M. Martin
--------------------------------
Andrew M. Martin, individually
AGENT
/s/ John Foraker
--------------------------------
EXHIBIT 10.63
-------------
SEPARATION AGREEMENT
SEPARATION AGREEMENT, dated as of December 2, 1999, is by and between
ANNIE'S HOMEGROWN, INC., a Delaware corporation with a principal place of
business at 395 Main Street, Wakefield, MA 01880 (the "Company") and ANDREW M.
MARTIN, an individual with a mailing address of P.O. Box 8487, Tauroa Station,
Matangi RD, Havelock North, New Zealand ("Martin").
WHEREAS, Martin was the Chairman and Chief Executive Officer ("CEO") of
the Company;
WHEREAS, Martin's employment as Chairman and CEO terminated in July
1999;
WHEREAS, Martin borrowed $75,000 from the Company on June 30, 1995
pursuant to a demand note accruing interest at 11% per annum (the "Personal
Loan");
WHEREAS, in December 1997, the Company cancelled the demand note for
the Personal Loan and Martin executed a secured promissory note (the "Secured
Note") in favor of the Company in the principal amount of $75,000, providing for
interest payable quarterly at 6.02% per annum, secured by a pledge of 25,000
shares of the Company's Common Stock, par value $0.001 ("Common Stock") owned by
Martin (the "Secured Personal Loan") pursuant to a Pledge Agreement dated as of
December 31, 1997 (the "Pledge Agreement");
WHEREAS, as of the date of this Agreement, the full balance due on the
Secured Note (including interest) is $82,517.78;
WHEREAS, certain of Martin's expenses advanced by the Company have been
classified as personal expenses ("Advances");
WHEREAS, the total amount of the Advances outstanding as of the date of
this Agreement (including interest at 10% per annum) is $27,192.77;
WHEREAS, in October 1997, the Company entered into a Stock Purchase and
Loan Agreement ("1997 Stock Loan Agreement") pursuant to which the Company made
a five-year loan to Martin in the amount of $67,641.60 bearing interest at the
rate of 6.34% per annum (the "1997 Stock Loan") to enable him to purchase shares
of the Company's Common Stock upon exercise of certain options that were
previously granted to Martin;
WHEREAS, the 1997 Stock Loan Agreement provides for forgiveness of the
1997 Stock Loan over a five-year period if Martin remains employed by the
Company, pursuant to which one-fifth of the 1997 Stock Loan has been forgiven by
the Company as of this date, resulting in an outstanding balance as of the date
of this Agreement of $58,108.03;
WHEREAS, in December 1998, the Company entered into a Stock Purchase
and Loan Agreement ("1998 Stock Loan Agreement") pursuant to which the Company
made a five-year loan to Martin in the amount of $102,468.80 bearing interest at
the rate of 4.51% per annum (the
<PAGE>
"1998 Stock Loan") to enable him to purchase shares of the Company's Common
Stock upon exercise of certain options that were previously granted to him;
WHEREAS, the 1998 Stock Loan Agreement provides for forgiveness of the
1998 Stock Loan over a five-year period if Martin remains employed by the
Company, pursuant to which none of the 1998 Stock Loan has been forgiven by the
Company as of this date, resulting in an outstanding balance as of the date of
this Agreement of $106,811.60;
WHEREAS, Martin currently holds 1,677,691 shares of the Company's
Common Stock; and
WHEREAS, Martin and the Company wish to set forth their respective
rights and obligations in connection with the termination of Martin as Chairman
and CEO and Martin's repayment of the Secured Note, the Advances, the 1997 Stock
Loan and the 1998 Stock Loan.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Martin and the Company agree as
follows:
1. TERMINATION CONFIRMED; CONTINUING SERVICE AS A DIRECTOR. The parties
confirm that Martin's employment as Chairman and CEO terminated on July 7, 1999,
effective July 31, 1999, but he remains a member of the Board of Directors. The
Company agrees to nominate Martin to the Board of Directors at the Company's
1999 Annual Meeting of Stockholders (or Special Meeting in Lieu of such Annual
Meeting) and to use its reasonable efforts to cause its officers and directors
to vote in favor of his election. Martin agrees to resign from the Board of
Directors effective on the Closing date of the transactions with Homegrown
Holdings Corp. ("HHC") described in a Term Sheet between HHC and the Company
executed by HHC on September 21, 1999. Martin's resignation letter, attached
hereto as Exhibit A, shall be signed on the date of this Agreement, held in
escrow by the Company's counsel, and shall be dated by Company counsel and
released to the Company only on the HHC Closing date.
2. SEVERANCE. Upon execution of this Agreement by both parties, Martin
shall be entitled, and the Company will pay to Martin, severance equal to four
months of Martin's base salary as of July 31, 1999 in the gross monthly amount
of $9,000 ("Severance"). The Severance shall be due and payable (and subject to
withholding, FICA, and similar deductions) ratably over a four-month period in
the Company's normal payroll periods. The Severance provided hereunder is in
lieu of the severance and change of control payments in a certain draft Change
of Control and Severance Agreement dated as of December 21, 1998 by and between
the Company and Martin, which the parties acknowledge is null and void.
3. REPAYMENT OF THE SECURED NOTE AND THE ADVANCES. The Company agrees
to accept shares of Common Stock as valid payment for the outstanding balance of
the Secured Note and the Advances, such shares to be valued at the greater of
(i) $1.50 per share, or (ii) the fair market value of such shares determined
with reference to any stock sale by the Company to a third party completed on or
prior to January 31, 2000; provided, however, that all payments in stock shall
be in accordance with the fastest payment schedule allowable under the
Irrevocable Stock Transfer Instructions, as amended, executed by Martin in 1995.
The Secured Note and the Advances, including all accrued interest shall be due
and payable on January 31, 2000 in cash or
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<PAGE>
stock as set forth above, provided, however, that if the Company completes a
transaction with HHC on or before January 31, 2000, the Secured Note and the
Advances shall be due and payable as provided in Section 5 hereof.
4. AMENDMENTS TO STOCK LOAN AGREEMENTS. Simultaneously, with the
execution of this Agreement, the parties shall execute Amendments to the 1997
Stock Loan Agreement and the 1998 Stock Loan Agreement in the form attached as
Exhibits B and C. Exhibits B and C (i) change the due date on the 1997 Stock
Loan and the 1998 Stock Loan (collectively, the "Stock Loans") from 45 days
after termination of employment to January 31, 2000, unless the Company closes
on a transaction with HHC, in which event the Stock Loans shall be due and
payable quarterly over a five (5) year period pursuant to the Omnibus Secured
Promissory Note attached as Exhibit D, (ii) change the Company's repurchase
price for shares purchased with outstanding Stock Loans from the original
exercise price of the stock options to a price equal to the greater of (A) $1.50
per Share, and (B) the fair market value of shares of Common Stock determined
with reference to any sale of stock by the Company to a third party that is
completed on or prior to January 31, 2000, and (iii) delete Section 7 of each
Stock Loan Agreement, which created a pledge to the Company of Martin's Common
Stock to secure the Stock Loans.
5. OMNIBUS SECURED PROMISSORY NOTE. Upon the closing of a transaction
with HHC on or before January 31, 2000, Martin agrees to execute the five-year
Omnibus Secured Promissory Note (the "Omnibus Note") substantially in the form
attached as Exhibit D and the Security Agreement attached as Exhibit E, pursuant
to which Martin agrees to repay the entire principal and accrued interest due to
the Company as of the date of the Omnibus Note under the Secured Note, Advances,
1997 Stock Loan and 1998 Stock Loan, bearing interest at the rate of nine
percent (9%) per annum, payable quarterly commencing with the first payment to
Martin from HHC. Upon execution of the Omnibus Note, the Pledge Agreement shall
terminate. Pursuant to the Security Agreement, the Omnibus Note shall be secured
by an assignment to the Company of payments by HHC to Martin pursuant to a Stock
Collar Agreement between HHC and Martin, provided, however, that if HHC defaults
in its quarterly payments to Martin, Martin's repayment obligation to the
Company for that same time period shall be tolled, with no further interest
accruing until the HHC default is cured, at which point Martin's repayments to
the Company shall resume. The Omnibus Note shall be due and payable in full,
regardless of any default by HHC, five (5) years after the closing of the HHC
transaction. At Martin's option, the Omnibus Note may be paid in cash or by
surrender of Martin's Common Stock (if he then owns any unencumbered shares), at
the then fair market value as determined by the last sale price on the principal
exchange on which the Company's Common Stock is then listed, if any, or by the
Board of Directors, acting in good faith, if not so listed. If Martin disputes
the Board's determination, the Company and Martin will negotiate in good faith
and will use their best efforts to appoint an independent appraiser of the
Company's Common Stock, whose determination will be binding on the parties. In
the event that the parties fail to agree and appoint a mutually acceptable
appraiser within sixty (60) days, the determination of value of the Company's
Common Stock made by the Board will be binding on the parties. The costs of any
appraiser appointed under this Section will be borne by Martin, unless the
appraiser's determination of the value of the Common Stock exceeds the Board's
valuation by at least 10%, in which case the Company will bear the costs of that
appraiser.
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<PAGE>
6. RELEASES.
(a) Other than those set forth in this Agreement, Martin, his heirs,
successors and assigns hereby remise, release and fully and forever discharge
the Company, and similarly release and discharge each of the Company's officers,
directors, stockholders, attorneys, assigns, agents, contractors,
representatives, servants, and employees who are, were or hereafter could be
liable, of and from all debts, demands, actions, causes of action, suits,
accounts, sums of money, reckoning, bonds, promises, acts, omissions, covenants,
policies, contracts, agreements, damages, executions, and any and all claims,
obligations, demands and liabilities, of whatever name, kind and nature, both in
law and in equity, both common law and statutory, both state and federal, which
against the Company or such agents Martin now has or ever had to this date with
respect or in connection with his employment by the Company or his service on
the Company's Board of Directors including his service as Chairman.
(b) Without limiting the generality of the foregoing, Martin
specifically and forever releases the Company from any and all claims and
damages arising therefrom, whether past, present or future, asserted or which
might have been asserted against the Company, including, but not limited to,
those related to Martin's employment with the Company or the termination
thereof, or those arising out of any claim of wrongful and unlawful discharge,
violations of Title VII of the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, as amended, violations of the Equal Pay Act, as amended, the
Age Discrimination in Employment Act of 1967, as amended, the Americans with
Disabilities Act of 1991, as amended, violations of any state or municipality
fair employment statutes or laws, or violations of any other law, rule,
regulation, or ordinance pertaining to employment wages, hours or any other
terms and conditions of employment, and termination of employment.
(c) Martin further agrees not to commence or cause to be commenced on
his behalf or otherwise any administrative charge or claim, administrative
review or legal action of any kind against the Company asserting any claim or
charge arising from, or in any way relating to, his employment with the Company.
(d) Martin acknowledges and agrees that he freely and voluntarily
entered into this Agreement and, more specifically, the General Release
provisions herein. Martin agrees that no fact, evidence, event or transaction
occurring before the execution of this Agreement, which is currently unknown to
Martin, but which may hereafter become known to Martin, shall affect in any
manner the final and unconditional nature of the agreements and releases set
forth herein. Martin acknowledges that he has been advised that he has
twenty-one (21) days to consider the General Release contained in this Agreement
and that he should consult with his attorney prior to executing it. For a period
of seven (7) days after executing this Agreement, Martin may revoke this
Agreement (including the General Release contain herein) by providing written
notice of revocation to the Company and the General Release shall not become
effective or enforceable until the seven-day period has expired. In the event
Martin revokes this Agreement, the entire Agreement shall be null and void and
unenforceable against either party.
(e) Other than as set forth in this Agreement, the Company and each of
its officers, directors, stockholders, attorneys, assigns, agents, contractors,
representatives, servants, and employees hereby release and fully and forever
discharges Martin, his heirs, successors, assigns
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<PAGE>
and attorneys of and from all debts, demands, actions, causes of action, suits,
accounts, sums of money, reckoning, bonds, promises, acts, omissions, covenants,
policies, contracts, agreements, damages, executions, and any and all claims,
obligations, demands and liabilities, of whatever name, kind and nature, both in
law and in equity, both common law and statutory, both state and federal, which
against Martin the Company or its agents now has or ever had to this date with
respect or in connection with his employment by the Company or his service on
the Company's Board of Directors.
(f) Without limiting the generality of the foregoing, the Company
specifically and forever releases Martin from any and all claims and damages
arising therefrom, whether past, present or future, asserted or which might have
been asserted against Martin, including, but not limited to any claim for COBRA
payments or any claims related to Martin's employment with the Company and/or
the termination thereof.
(g) The Company further agrees not to commence or cause to be commenced
on its behalf or otherwise any administrative charge or claim, administrative
review or legal action of any kind against Martin asserting any claim or charge
arising from, or in any way relating to, Martin's employment with the Company.
7. GOVERNING LAW/VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts. The
parties, for themselves and their respective successors and assigns, irrevocably
submit to the jurisdiction of the state courts in Essex County, Massachusetts
(the county in which the Company's principal executive offices are located) or
the United States District Court for the District of Massachusetts with respect
to the entry of judgments arising out of arbitration as provided in Section 8
hereof. The parties irrevocably consent to service of any and all process in any
such action or proceeding to be made upon a party not having a last and usual
address in such state by substitute service effected by registered or certified
mail to the address for that party outside such state last known to the party
commencing such proceeding. In addition, the parties irrevocably waive, to the
fullest extent permitted by law, all objections they may now or hereafter have
to the laying of venue in such courts, and further irrevocably waive any claim
that any such forum is an inconvenient forum. The parties further agree that
final judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law.
8. ARBITRATION. If any dispute concerning this Agreement including but
not limited to, its existence, validity, interpretation, performance or
non-performance, arising before or after termination or expiration of this
Agreement, cannot be settled by negotiation, the parties agree first to try in
good faith to settle the dispute by mediation by the American Arbitration
Association in Boston, Massachusetts, under its Commercial Mediation Rules. If
mediation is unsuccessful, such dispute shall be settled by final and binding
arbitration before a single arbitrator in Boston, Massachusetts, in accordance
with the expedited commercial rules then in effect of the American Arbitration
Association. Judgment upon any award may be entered as provided in Section 7.
The cost of such arbitration shall be borne equally between the parties thereto
unless otherwise determined by the arbitrator.
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<PAGE>
9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which (including signatures reproduced via facsimile)
shall be deemed an original.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understanding or agreements
concerning the subject matter hereof. This agreement may be amended, modified or
terminated only by a written instrument signed by the parties hereto.
11. INVALIDITY. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision. If any provision of this Agreement is or becomes or is deemed
invalid, illegal or unenforceable, such provision shall be deemed amended to
conform to applicable laws to the maximum extent permissible in any jurisdiction
so as to be valid and enforceable or, if it cannot be so amended without
materially altering the intention of the parties, it shall be stricken and the
remainder of this Agreement shall remain in full force and effect.
12. NON-DISPARAGEMENT. The Company and each of its officers and
directors agrees not to comment in a detrimental fashion or make any disparaging
remarks about Martin, his employment by the Company, his service on the Board of
Directors or his departure from the Company. Similarly, Martin agrees not to
comment in a detrimental fashion about the Company, its management and its Board
of Directors or about his departure from the Company. In addition to the
restrictions set forth in this Section 12, Martin agrees not to (i) publicly or
privately solicit proxies relating to the voting of any of the Company's Stock;
or (ii) contact, write to or otherwise communicate with, directly or indirectly,
any shareholder of the Company (other than relatives, family members, officers
or directors of the Company) making statements that are critical or disparaging
to the Company, its management, Board of Directors, business plans, financial
condition or prospects.
13. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Martin agrees not to
disclose and will maintain in confidence any confidential information of or
concerning the Company that he has obtained.
14. CONSULTATION WITH COUNSEL. Each party represents that it has been
represented by counsel in the negotiation of this Agreement, and Martin agrees
that (i) the payments, terms of repayment of the Secured Note, Advances, 1997
Stock Loan and 1998 Stock Loan and value of the consideration set forth in this
Agreement are more favorable to Martin than his prior obligations to the
Company; (ii) in deciding whether to sign this Agreement, Martin has not relied
on any statement or representation other than that which is expressly set forth
in this Agreement; (iii) he knowingly and voluntarily agrees to the terms set
forth in this Agreement; and (iv) he knowingly and voluntarily intends to be
legally bound by the same.
15. NOTICES. All notices, demands and communications provided for
herein or made hereunder shall be delivered in person, sent via certified or
registered mail, return receipt requested, or sent via overnight courier
requiring a signature for delivery, or sent via facsimile, provided notice is
also given by another approved means, addressed in each case as follows, until
some other address shall have been designated in a written notice to the other
parties hereto in like manner.
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<PAGE>
If to the Company: Annie's Homegrown, Inc.
395 Main Street
Wakefield, MA 01880
Attn: President
With a copy to: Kirkpatrick & Lockhart LLP
75 State Street, 6th Floor
Boston, Massachusetts 02109
Attn: Stephen L. Palmer, Esquire
If to Martin: Andrew M. Martin
P.O. Box 8487
Tauroa Station
Matangi RD , Havelock North
New Zealand
With a copy to: Davis & Gilbert LLP
1740 Broadway
New York, NY 10019
Attn: Michael C. Lasky, Esquire
16. FURTHER ASSURANCES. The parties shall each, at the request of any
of the others, furnish, execute and deliver such documents, instruments,
certificates, notices and further assurances as counsel for the requesting party
shall reasonably require as necessary or desirable to effect complete
consummation of this Agreement, or in connection with the preparation and filing
of reports required or requested by governmental agencies or other regulatory
bodies. The party requesting such documents or further assurances shall be
responsible for the costs of producing same.
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
it to be executed by their duly authorized officers as of the day and date first
hereinabove written.
ANNIE'S HOMEGROWN, INC.
/s/ Andrew M. Martin By: /s/ Paul B. Nardone
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Andrew M. Martin, Individually Paul Nardone, President
EXHIBIT 10.64
-------------
OMNIBUS SECURED
PROMISSORY NOTE
$274,630.18 WAKEFIELD, MASSACHUSETTS
DECEMBER 2, 1999
FOR VALUE RECEIVED the undersigned, ANDREW M. MARTIN ("Martin")
promises to pay to the order of ANNIE'S HOMEGROWN, INC. (the "Company") at the
offices of the Company at 395 Main Street, Wakefield, MA 01880, or at such other
place as the holder of this Note may from time to time designate, in lawful
monies of the United States and in immediately available funds, the principal
sum of Two Hundred Seventy-Four Thousand Six Hundred Thirty and 18/100 Dollars
($274,630.18) (or such greater amount as may result from adding thereto interest
not paid when due) (the "Principal") payable until paid in twenty (20) quarterly
installments, commencing on the date Martin receives the first payment under an
agreement or agreements with Homegrown Holdings Corp. ("HHC") (such agreement or
agreements being hereafter referred to as the "Stock Collar Agreement") and
continuing on the same day of every third month thereafter (or, if later, that
date on which either HHC exercises a call or Martin exercises a put under the
Stock Collar Agreement), each installment to be equal to five percent (5%) of
the original principal amount of this Promissory Note except that the final
installment, which shall be due on the fifth anniversary of the Closing of the
HHC Transaction (as defined below), shall be in the amount of the unpaid balance
of the Principal (if any), provided that if HHC defaults by failing to make any
quarterly payment due under the Stock Collar Agreement, the due date for the
installment hereunder corresponding to such payment shall be postponed until
such default is cured, provided further that in all events the entire unpaid
balance of principal and interest of this Note shall be due on the fifth
anniversary of the closing of the HHC transaction.
The undersigned also promises to pay interest from the date hereof on
the principal balance of this Note outstanding from time to time, until the
principal balance is paid in full, at the rate of nine percent (9%) per annum
(the "Interest Rate"), payable on the dates principal installments are due,
provided that in the event HHC defaults by failing to make any quarterly payment
due under the Stock Collar Agreement, interest on the Principal balance then
outstanding shall cease to accrue until such default is cured.
Attached to this Note as Schedule A is a schedule of the amount of each
principal installment, plus accrued interest pre-computed to the date each of
said principal installments is due, which calculation shall be conclusive absent
manifest error. The Company shall have the right to revise such schedule to
reflect changes in the pre-computed interest as a result of late payments and
any delinquent interest charges added to principal as provided below. The first
installment shall be due on December 2, 1999. To the extent permitted by law,
any interest not paid when due shall be added to the principal amount of this
Note then outstanding. The principal amount of this Note set forth above shall
be deemed to be increased to reflect such addition, and such additional
principal amount shall thenceforth bear interest at the Interest Rate.
<PAGE>
All payments shall be made in lawful money of the United States in
immediately available funds, provided that at Martin's option, payment may be
made by surrendering to the Company any shares of Common Stock of the Company
which Martin is not obligated to sell to HHC. Any shares so surrendered shall be
valued for purposes of this Note as set forth in the Separation Agreement, dated
December 2, 1999, between Martin and the Company (the "Separation Agreement").
Principal and all accrued interest shall be due and payable in full on
the fifth anniversary of the closing of the HHC transaction. For purpose of this
Note, the closing of the HHC transaction shall mean the Closing date of an
Investment and Stock Purchase Agreement by and between the Company and HHC dated
December 2, 1999. Overdue principal shall bear interest, payable on demand, at
the rate of fourteen percent (14%) per annum (but any installment as to which
the due date is postponed because of the existence of a payment default under
the Stock Collar Agreement shall not be deemed "overdue"). All payments
received, whether or not designated as principal or interest, shall be applied
first to any premiums, costs or expenses payable by Martin hereunder or under
the Separation Agreement as defined below, then to interest then due and the
remainder to Principal. If any payment on this Note becomes due and payable on a
Saturday, Sunday or legal holiday in Massachusetts, the maturity thereof shall
be extended to the next succeeding business day and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
This Note is the Omnibus Secured Promissory Note referred to in the
Separation Agreement and is subject to and entitled to the benefit of all the
terms and conditions contained in said Separation Agreement. Terms used herein
and not otherwise defined herein shall have the meanings ascribed thereto in the
Separation Agreement. This Note is secured by a Security Agreement and
Collateral Assignment (the "Security Agreement"). Martin may prepay all or any
part of the principal of this Note at any time without premium or penalty,
provided that any prepayment in part shall be applied first to accrued interest
to the date of prepayment and then to principal, and that any partial prepayment
shall be applied to installments of principal in the inverse order of maturity.
Each of the following shall constitute an Event of Default hereunder:
(a) Any default by Martin in the payment when due and payable of any
principal of or interest on this Note or any part thereof provided that such
default continues unremedied for a period of twenty (20) days from the date upon
which such payment is due;
(b) Any default in the performance or observance by Martin of any
terms, conditions, covenants or agreements contained herein or in the Separation
Agreement or the Security Agreement (other than those referred to elsewhere in
this paragraph) and continuance thereof unremedied for (or if such default can
not be remedied within thirty (30) days, if action satisfactory to the Company
is not taken with respect thereto within) thirty (30) days after notice of such
default has been received by Martin from any source;
(c) The death, adjudication of bankruptcy or insolvency of, or the
making of an assignment for the benefit of creditors by Martin;
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<PAGE>
(d) The institution of bankruptcy, reorganization, arrangement,
liquidation, receivership, moratorium or similar proceedings by or against
Martin, and if instituted against Martin, his consent thereto or the pendency
thereof for sixty (60) days;
(e) Any statement or other information furnished by Martin to the
Company under or in connection with the Separation Agreement shall prove to be
false or misleading in any material respect as of the time made or furnished; or
(f) Loss, theft, damage or destruction of any substantial portion of
any collateral for the obligations of Martin or the making of any levy, seizure
or attachment of such collateral or the failure to pay when due any tax thereon.
Martin acknowledges that if any of the events described in clauses (c)
or (d) above shall occur, this Note shall become immediately due and payable
without notice or demand, and that upon the occurrence and during the
continuance of any other Event of Default described below, the principal of this
Note and the interest accrued thereon may be declared to be immediately due and
payable, whereupon the same shall be immediately due and payable without
presentment, demand, protest or notice of any kind, all of which are expressly
waived. Upon the principal of this Note and the interest accrued thereon
becoming due and payable, the holder shall thereupon be entitled to exercise any
or all of the remedies provided herein, in the Security Agreement or otherwise
available by law.
Without limiting the foregoing, any sums at any time credited by, due
from or distributable by the Company to Martin and any securities or other
property of Martin in the possession of the Company may at all times be held and
treated as collateral security for payment of Martin's obligations. Regardless
of the adequacy of any collateral, any such sums may be applied to, set-off
against or recouped at any time with respect to any obligations of Martin on
which Martin is primarily liable, or after the maturity thereof if Martin is
secondarily liable thereon. Without limiting the foregoing, Martin expressly
acknowledges that the Company may apply to, set-of against or recoup with
respect to Martin's obligations hereunder any amounts which become distributable
to Martin from the Company under any circumstances whatsoever.
No delay or omission on the part of the holder in exercising any rights
hereunder shall operate as a waiver of such right or of any other right of such
holder, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Martin
and every endorser and guarantor of this Note, regardless of the time, order or
place of signing, waives presentment, demand, protest and notices of every kind
in connection with the execution, delivery, acceptance, performance, default or
enforcement of this Note, and assents to any one or more extensions or
postponements of the time of payment and any other indulgences, to any
impairment, substitution, exchange or release of any property securing this
obligation, and to the addition or release of, or agreement by the holder not to
sue, any other party or person primarily or secondarily liable.
Martin agrees to pay on demand all costs of collection, including
without limitation court costs and reasonable attorneys' fees, incurred by the
holder in the enforcement or protection of holder's rights under this Note or
with respect to any collateral securing payment of this Note, or incurred in
connection with the collection of the principal of or interest on this Note.
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<PAGE>
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF MARTIN AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND MUTUALLY WAIVES HIS OR
ITS (AS THE CASE MAY BE) RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM,
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING
TO THIS NOTE OR ANY COLLATERAL HEREFOR OR ANY OTHER DOCUMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, AND MARTIN
WAIVES ALL RIGHTS TO REQUIRE THE COMPANY TO ELECT AMONG ANY OF ITS REMEDIES WITH
RESPECT TO THIS NOTE OR ANY COLLATERAL. MARTIN REPRESENTS THAT HE HAS REVIEWED
THE FOREGOING WAIVERS WITH HIS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED HIS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH HIS LEGAL COUNSEL, AND
AGREES THAT IN THE EVENT OF LITIGATION THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY. THIS WAIVER CONSTITUTES A
MATERIAL INDUCEMENT FOR THE COMPANY TO ACCEPT THIS NOTE AND MAKE THE
ACCOMODATIONS CONTEMPLATED HEREBY.
All agreements between Martin and the Company with respect to the Loan
are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of this Note or otherwise, shall
the amount paid or agreed to be paid to the Company for the use, forbearance or
detention of the indebtedness evidenced hereby (hereinafter referred to in this
paragraph as "interest") exceed the maximum permissible charge or rate under
applicable law. As used herein, the term "applicable law" shall mean the law in
effect as of the date hereof, provided, however, that in the event there is a
change in the law which results in a higher permissible rate of interest, then
this Note shall be governed by such new law as of its effective date. In this
regard, Martin and the Company expressly stipulate that it is their intent in
the execution, delivery and acceptance of this Note to contract in strict
compliance with the laws of the Commonwealth of Massachusetts from time to time
in effect, and that this Note shall conclusively be deemed to have been
delivered in and to be performed in the Commonwealth of Massachusetts. If from
any circumstance whatsoever, fulfillment of any provision of this Note, or any
other agreement between Martin and the Company at the time performance of such
provision shall be due, shall involve exceeding the limit allowed by law, then
the obligation to be fulfilled shall automatically be reduced to said limit, and
if from any circumstances the Company should ever receive as interest an amount
or amounts which would exceed the highest lawful rate, such amount which would
be excessive interest shall be applied to the reduction of the principal balance
of the Note and not to the payment of interest. This provision shall control
every other provision of all agreements between Martin and the Company.
This Note shall be governed in all respects by, and construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts
without application of its laws regarding choice of law. EACH OF MARTIN AND THE
COMPANY HEREBY CONSENTS AND AGREES THAT THE SUPERIOR COURT OF ESSEX COUNTY IN
SAID COMMONWEALTH AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS SHALL HAVE JURISDICTION TO HEAR AND DETERMINE ANY
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<PAGE>
CLAIMS OR DISPUTES BETWEEN MARTIN AND THE COMPANY PERTAINING TO THIS NOTE OR TO
THE SECURITY AGREEMENT AND COLLATERAL ASSIGNMENT SECURING THIS NOTE OR ANY
COLLATERAL COVERED THEREBY OR ANY MATTER PERTAINING TO ANY OF THE SAME, AND EACH
HEREBY SUBMITS TO THE JURISDICTION OF SAID COURTS, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW
SOUGHT FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF ANY OF MARTIN'S OBLIGATIONS UNDER OR WITH RESPECT TO
THIS NOTE OR ANY MATTER RELATING THERETO, PROVIDED, THAT NOTHING IN THIS NOTE
SHALL BE DEEMED OR OPERATE TO PRECLUDE THE COMPANY FROM BRINGING SUIT OR TAKING
OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO ENFORCE THIS NOTE. MARTIN
EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR
SUIT COMMENCED IN ANY SUCH COURT, AND HE HEREBY WAIVES ANY OBJECTION WHICH HE
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS. MARTIN AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS MAY BE MADE BY INTERNATIONAL EXPRESS DELIVERY SERVICE ADDRESSED TO
MARTIN AT THE ADDRESS FOR NOTICE SET FORTH IN THE SEVERANCE AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED AND TO CONSTITUTE PERSONAL SERVICE
UPON THE EARLIER OF MARTIN'S ACTUAL RECEIPT THEREOF OR THIRTY (30) DAYS AFTER
DELIVERY TO FEDERAL EXPRESS INTERNATIONAL OR OTHER ESTABLISHED INTERNATIONAL
EXPRESS DELIVERY SERVICE, DELIVERY CHARGES PREPAID.
Executed as an instrument under seal as of the day and year first above
written.
/s/ Andrew M. Martin
--------------------------
Andrew M. Martin
--------------------------
--------------------------
Witness:
- ------------------------------
- ------------------------------
Printed Name
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EXHIBIT 10.65
-------------
AMENDMENT TO
STOCK PURCHASE AND LOAN AGREEMENT
Reference is made to that certain Stock Purchase and Loan Agreement
(the "Original Loan Agreement"), dated as of December 21, 1998 by and between
ANNIE'S HOMEGROWN, INC. (the "Company"), a Delaware corporation and Andrew M.
Martin ("Key Employee"). This Amendment to the Original Loan Agreement is made
as of December 2, 1999 by and between the Company and Key Employee. Capitalized
terms not defined in this Amendment shall have the meaning given to them in the
Original Loan Agreement.
BACKGROUND
----------
A. Key Employee and the Company entered into the Original Loan
Agreement to enable Key Employee to purchase one hundred and one thousand, nine
hundred and fifty-nine (101,959) Shares at a price of $1.005 per Share pursuant
to certain Options which previously were granted by the Company to Key Employee.
B. Key Employee and the Company wish to amend the Original Loan
Agreement as set forth herein.
AGREEMENT
---------
In consideration of the foregoing background and the mutual agreements
of the parties set forth in this Amendment, the Company and Key Employee agree
as follows:
1. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(i) by striking "within 45 days of the
termination date" and replacing it with "by January 1, 2000,
unless the Company closes on a transaction with Homegrown
Holdings Corp. on or before January 1, 2000, in which event
Key Employee agrees to execute an Omnibus Secured Promissory
Note in the form attached providing for repayment of the
[loan] quarterly over a five-year period, together with a
Security Agreement and any other required documents or
instruments."
2. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(ii) by striking "for the price of
$1.005 per share (plus accrued interest)" and replacing it
with "at a price equal to the greater of (A) $1.50 per Share,
and (B) the fair market value of shares of Common Stock
determined with reference to any sale of stock by the Company
to a third party that is completed on or prior to January 1,
2000."
3. The Original Loan Agreement, as amended, is hereby further
amended by striking Section 7 Pledge of Stock in its entirety.
<PAGE>
4. In all other respects, the Original Loan Agreement is hereby
ratified and confirmed.
5. This Amendment may be executed in counterparts, each of which
will be considered an original and each of which will
constitute one and the same document.
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Neil Raiff
-----------------------------------
Neil Raiff, Chief Financial Officer
KEY EMPLOYEE:
/s/ Andrew M. Martin
----------------------------------------
Andrew M. Martin
EXHIBIT 10.66
-------------
THIRD AMENDMENT TO
STOCK PURCHASE AND LOAN AGREEMENT
Reference is made to that certain Stock Purchase and Loan Agreement
(the "Original Loan Agreement"), dated as of October 1, 1997, and amended by an
Amendment to Stock Purchase and Loan Agreement dated December 31, 1997 (the
"First Amendment"), and an Amendment dated as of December 21, 1998 (the "Second
Amendment") by and between ANNIE'S HOMEGROWN, INC. (the "Company"), a Delaware
corporation and Andrew M. Martin ("Key Employee"). This third amendment ("Third
Amendment") to the Original Loan Agreement, as amended, is made as of December
2, 1999 by and between the Company and Key Employee. Capitalized terms not
defined in this Third Amendment shall have the meaning given to them in the
Original Loan Agreement.
BACKGROUND
----------
A. Key Employee and the Company entered into the Original Loan
Agreement to enable Key Employee to purchase Eighty Four Thousand Five Hundred
Fifty-Two (84,552) Shares at a price of $0.80 per Share pursuant to certain
Options which previously were granted by the Company to Key Employee.
B. The Original Loan Agreement stated in Section 6 thereof that the
Principal Amount of the loan will be repaid by the Company under certain
circumstances. A computational error was made in computing the amounts of such
repayments.
C. Key Employee and the Company pursuant to the First Amendment amended
the Original Loan Agreement to correct this error, among other things.
D. Key Employee and the Company pursuant to the Second Amendment
clarified the language in the Original Loan Agreement relating to the Company's
rights upon a change of control and termination of Key Employee's employment.
E.Key Employee and the Company wish to further amend the Original Loan
Agreement, as amended, as set forth herein.
AGREEMENT
---------
In consideration of the foregoing background and the mutual agreements
of the parties set forth in this Third Amendment, the Company and Key Employee
agree as follows:
1. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(i) by striking "within 45 days of the
termination date" and replacing it with "by January 1, 2000,
unless the Company closes on a
<PAGE>
transaction with Homegrown Holdings Corp. on or before January
1, 2000, in which event Key Employee agrees to execute an
Omnibus Secured Promissory Note in the form attached providing
for repayment of the loan quarterly over a five-year period,
together with a Security Agreement and any other required
documents or instruments."
2. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(ii) by striking "for the price of $0.80
per share (plus accrued interest)" and replacing it with "at a
price equal to the greater of (A) $1.50 per Share, and (B) the
fair market value of shares of Common Stock determined with
reference to any sale of stock by the Company to a third party
that is completed on or prior to January 1, 2000."
3. The Original Loan Agreement, as amended, is hereby further
amended by striking Section 7 Pledge of Stock in its entirety.
4. In all other respects, the Original Loan Agreement, as
amended, is hereby ratified and confirmed.
5. This Third Amendment may be executed in counterparts, each of
which will be considered an original and each of which will
constitute one and the same document.
IN WITNESS WHEREOF, this Third Amendment has been executed as of the
date first set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Neil Raiff
-----------------------------------
Neil Raiff, Chief Financial Officer
KEY EMPLOYEE:
/s/ Andrew M. Martin
----------------------------------------
Andrew M. Martin
EXHIBIT 10.67
-------------
SECURITY AGREEMENT
AND
COLLATERAL ASSIGNMENT
ANDREW M. MARTIN, an individual with a mailing address of P.O. Box 8487
Tauroa Station, Matangi RD, Havelock North, New Zealand (hereinafter called
"Martin"), hereby grants, pledges and assigns collaterally to ANNIE'S HOMEGROWN,
INC., a Delaware corporation having a place of business at 395 Main Street,
Wakefield, MA 01880 (hereinafter called "Creditor"), to secure payment of
$274,630.18 as provided in Martin's Omnibus Secured Promissory Note of even date
herewith (the "Note") and also to secure the payment and performance of all
obligations of Martin to Creditor under this Agreement, whether now existing or
hereafter arising (all of the foregoing, including said note, being hereafter
called the "Obligations"), and grants a security interest in, the personal
property of Martin described below, wherever located and whether now existing or
hereafter acquired or arising, and any and all additions, substitutions,
accessions, proceeds and products thereto or thereof (all of the same being
hereinafter called the "Collateral"):
All right, title and interest of Martin, present and future,
in, to and under or arising out of that certain Put Agreement and that certain
Call Agreement, each between Martin as Seller and Homegrown Holdings Corp., a
Delaware corporation ("HHC"), dated December 2, 1999 (said Agreements, whether
in separate documents or combined in a single document, being referred to
collectively as the "Stock Collar Agreement") and all rights to the payment of
money thereunder, provided that so long as no Event of Default under the Note
exists at the time HHC makes a payment under the Stock Collar Agreement,
Creditor agrees to release its security interest in that portion of such payment
equal to the difference between (i) the total amount being paid by HHC and (ii)
the amounts then due to Creditor under the Note. A true and complete executed
copy of the Stock Collar Agreement is attached hereto as Exhibit A.
Martin hereby warrants and covenants that:
1. NO VIOLATION. The execution, delivery and performance of this
Agreement by Martin does not violate or contravene any indenture, agreement or
undertaking to which Martin is a party or by which he is bound.
2. NO OTHER LIENS OR DISPOSITIONS; INTERCREDITOR AGREEMENT. Except for
the security interest granted hereby, Martin is the owner of the Collateral free
from all encumbrances and will defend the same against the claims and demands of
all persons. Martin will not pledge, mortgage, create or suffer to exist a
security interest in the Collateral, or in any of the shares of stock of the
Company subject to the Stock Collar Agreement, in favor of any person other than
Creditor, and will not sell or transfer the Collateral or any interest therein
without the prior written consent of Creditor, provided, however, that if Martin
hereafter desires to sell, assign or borrow against that portion of the amounts
payable under the Stock Collar Agreement which exceeds the amounts payable under
the Note, Creditor agrees to negotiate in good faith with the proposed
purchaser, assignee or lender, as the case may be, provisions for an
intercreditor
<PAGE>
agreement which will reasonably protect Creditor's priority position while
allowing such transaction to proceed, so long as such transaction does not
involve a pledge of more than a pro-rata portion of the stock subject to the
Stock Collar Agreement.
3. RESIDENCE ADDRESS; ACCESS TO RECORDS; FURTHER ASSURANCES. Martin is
delivering to Creditor herewith an executed counterpart original copy of the
Stock Collar Agreement. Martin agrees that said copy of the Stock Collar
Agreement will be held by Creditor until the Note is paid in full. Martin shall
notify HHC of the collateral assignment and grant of security interest in the
Stock Collar Agreement made herein and that payments thereunder are to be made
to Creditor as provided in Section 8 below. Martin will immediately notify
Creditor in writing of any change in name or address from that shown in this
Agreement and shall furnish to Creditor such further information as Creditor may
request, including the address(es) of each residence and each place of business
and shall at all reasonable times and from time to time allow Creditor, by or
through any of its officers, agents, attorneys or accountants, to examine,
inspect or make extracts from his books and records pertaining to the
Collateral, and shall do, make, execute and deliver all such additional and
further acts, things, deeds, assurances and instruments as Creditor may require
more completely to vest in and assure to Creditor its rights hereunder or in any
of the Collateral, including Uniform Commercial Code financing statements, and
any notices or other filings which may be necessary or appropriate under the
laws of New Zealand to perfect, protect or enforce with respect to any
Collateral located in New Zealand the security interest, pledge and assignment
created hereby.
4. NOTICE OF DEFAULT UNDER STOCK COLLAR AGREEMENT. Martin agrees to
give Creditor prompt written notice, with all relevant details, in the event of
any default by HHC under the Stock Collar Agreement.
5. PERFORMANCE; NO AMENDMENTS; PAYMENT OF TAXES. Martin will perform on
a timely basis all of his obligations under the Stock Collar Agreement and will
not, without the prior written consent of Creditor, amend, modify, change,
terminate, waive any rights under or any default on the part of HHC with respect
to, or commit or allow to exist any default on his part under, the Stock Collar
Agreement. Martin will pay promptly when due all taxes and other impositions,
whether under any federal or state law of the United States or New Zealand,
including income taxes and capital gains taxes, which if unpaid could constitute
a lien or encumbrance on the Collateral.
6. CREDITOR'S RIGHT TO REMEDY CERTAIN DEFAULTS. In its discretion,
Creditor may discharge taxes and other encumbrances at any time levied or placed
on the Collateral and pay any necessary filing fees. Martin agrees to reimburse
Creditor on demand for any and all expenditures so made, and until paid the
amount thereof shall be a debt secured by the Collateral. Creditor shall have no
obligation to Martin to make any such expenditures nor shall the making thereof
relieve Martin of any default.
7. EVENTS OF DEFAULT AND REMEDIES. Upon the happening of any Event of
Default under the Note (an "Event of Default"), and as long as such Event of
Default continues, Creditor may, at its option, without notice or demand declare
all of the Obligations to be immediately due
-2-
<PAGE>
and payable, and Creditor shall then have the right to take immediate possession
of any Collateral not already in its possession, and for that purpose Creditor
may, so far as Martin can give authority therefor, enter upon any premises on
which the Collateral, or any part thereof, may be situated and remove the same
therefrom. Martin will make the Collateral available to Creditor at a place and
time designated by Creditor which is reasonably convenient to both parties.
Except for Collateral which is of a type customarily sold on a recognized
market, Creditor will give Martin at least ten days' prior written notice of the
time and place of any public sale of the Collateral or of the time after which
any private sale thereof is to be made. The Creditor shall also have in any
jurisdiction where enforcement hereof is sought, in addition to all other rights
and remedies, the rights and remedies of a secured party under the Uniform
Commercial Code of Massachusetts. From the proceeds of any sale or collection,
Creditor shall be entitled to retain (i) all sums secured hereby, (ii) its
reasonable expenses of retaking, holding, preparing for sale and selling, and
(iii) reasonable legal expenses, attorneys' fees and all other costs incurred by
it in connection with the interpretation, administration and enforcement of this
Agreement or any Collateral or with such sale or other disposition or any
collection. The residue, if any, of any proceeds of collection or sale shall be
paid to Martin; Martin, however, shall remain liable for any deficiency. No
waiver by Creditor of any default shall be effective unless in writing nor
operate as a waiver of any other default or of the same default on another
occasion.
8. REGARDING THE STOCK COLLAR AGREEMENT.
a. Concurrently with his execution of this Agreement: (i)
Martin agrees to instruct HHC to remit directly to Creditor that portion of each
payment coming due under the Stock Collar Agreement equal to the amount of the
corresponding payment due under the Note (as set forth on Schedule A attached to
the Note), and to obtain HHC's acknowledgement of and agreement to honor such
instruction, and its acknowledgement that such instruction is irrevocable and
cannot be changed without the prior written consent of Creditor; and (ii) Martin
also agrees to notify HHC and any escrow agent in writing of the security
interest of the Creditor in the amounts payable by HHC under the Stock Collar
Agreement and obtain HHC's acknowledgement of the security interest and that
upon receipt of written notice from Creditor that an Event of Default has
occurred, the full amount of all payments under the Stock Collar Agreement is to
be made directly to the Creditor.
b. At any time after the occurrence of an Event of Default:
(i) Creditor shall have the right, in addition to all other rights and remedies
provided herein, at its discretion to collect and receive directly from HHC (or
any escrow agent under the Stock Collar Agreement) all sums due or payable to
Martin under the Stock Collar Agreement and to retain and apply on the
Obligations such portion thereof equal to the amount then due and payable under
the Note and may in its own name or in the name of Martin take such proceedings
at law or in equity as it deems proper or desirable to enforce its rights of
possession or to collect such payments, and the Creditor is hereby granted power
of attorney for that purpose; (ii) Creditor may itself at any time after an
Event of Default has occurred, without notice to or demand upon Martin, notify
HHC and escrow agent that an Event of Default has occurred and direct them to
make payment directly to Creditor; (iii) Martin shall hold the proceeds received
from any payment in trust for the Creditor without commingling the same with
other funds of Martin and shall turn the same over
-3-
<PAGE>
to the Creditor immediately upon receipt in the form received; and (iv) insofar
as Collateral shall include instruments, contract rights, causes of action,
other claims and rights to the payment of money, or the like, Creditor may
demand, collect, draw on, receipt for, settle, compromise, adjust, sue for,
foreclosure or realize upon Collateral and any proceeds thereof as the Creditor
may determine, whether or not Obligations or Collateral are then due, and for
the purpose of realizing the Creditor's rights therein, the Creditor may
receive, open and dispose of mail addressed to Martin and endorse notes, checks,
drafts, money orders, documents of title or other evidences of payment, shipment
or storage or any form of collateral on behalf of and in his name.
9. WAIVERS; ASSENTS. Martin waives demand, notice, protest, notice of
acceptance of this Agreement, notice of credit extended, collateral received or
delivered or other action taken in reliance hereon and all other demands and
notices of any description. Martin also waives any and all rights that it may
have to a judicial hearing in advance of the enforcement of any of Creditor's
rights hereunder, including without limitation, Creditor's rights following an
event of default to take immediate possession of the Collateral and exercise its
rights with respect thereto. With respect both to the Obligations and the
Collateral, Martin assents to any extension or postponement of the time of
payment or any other indulgence, to any substitution, exchange or release of
Collateral, to the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payment thereon and the
settlement, compromising, adjusting or discharge of any thereof, all in such
manner and at such time or times as Creditor may deem advisable. Creditor shall
have no duty as to the collection or protection of the Collateral or any income
thereon, nor as to the preservation of rights pertaining thereto beyond the safe
custody of any thereof in the possession of the Creditor. Creditor may exercise
its rights with respect to the Collateral without resorting or regard to other
collateral or sources of reimbursement for the Obligations. Creditor shall not
be deemed to have waived any of its rights upon or under the Obligations or the
Collateral unless such waiver be in writing and signed by Creditor. No delay or
omission on the part of Creditor in exercising any right shall operate as a
waiver of such right or any other right. A waiver on any one occasion shall not
be construed as a bar to or waiver of any right on any future occasion. All
rights and remedies of Creditor on the Obligations or the Collateral, whether
evidenced hereby or by any other instrument or paper, shall be cumulative and
may be exercised separately or concurrently.
10. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF MARTIN AND THE COMPANY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
HIS OR ITS (AS THE CASE MAY BE) RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY
CLAIM, ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF,
UNDER, IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, THE NOTE, THE
SEPARATION AGREEMENT, THE COLLATERAL OR THE OBLIGATIONS, OR ANY TRANSACTIONS
CONTEMPLATED HEREIN OR THEREIN OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTION OF ANY PARTY, AND MARTIN WAIVES
ALL RIGHTS TO REQUIRE THE CREDITOR TO ELECT AMONG ANY OF ITS REMEDIES WITH
RESPECT TO THIS AGREEMENT OR ANY COLLATERAL. EACH PARTY REPRESENTS THAT IT HAS
REVIEWED THE FOREGOING WAIVERS WITH LEGAL COUNSEL AND HAS KNOWINGLY AND
-4-
<PAGE>
VOLUNTARILY WAIVED HIS OR ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH HIS
OR ITS LEGAL COUNSEL, AND AGREES THAT IN THE EVENT OF LITIGATION THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY. EACH
PARTY RECOGNIZES AND AGREES THAT THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT
FOR THE OTHER PARTY TO ENTER INTO THIS AGREEMENT AND FOR THE CREDITOR TO MAKE
THE ACCOMODATIONS CONTEMPLATED IN THE SEPARATION AGREEMENT.
11. GENERAL. This Agreement and all rights and obligations hereunder,
including matters of construction, validity and performance, shall be governed
by the law of Massachusetts. EACH OF MARTIN AND THE CREDITOR HEREBY CONSENTS AND
AGREES THAT THE SUPERIOR COURT OF ESSEX COUNTY IN SAID COMMONWEALTH AND THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS SHALL HAVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN MARTIN AND THE
CREDITOR PERTAINING TO THE NOTE OR TO THIS AGREEMENT OR ANY COLLATERAL COVERED
HEREBY OR ANY MATTER PERTAINING TO ANY OF THE SAME, AND EACH HEREBY SUBMITS TO
THE JURISDICTION OF SAID COURTS, AS WELL AS TO THE JURISDICTION OF ALL COURTS TO
WHICH AN APPEAL MAY BE TAKEN OR OTHER REVIEW SOUGHT FROM THE AFORESAID COURTS,
FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF
MARTIN'S OBLIGATIONS UNDER OR WITH RESPECT TO THE NOTE OR THIS AGREEMENT OR ANY
MATTER RELATING THERETO, BUT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE CREDITOR FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION
IN ANY OTHER JURISDICTION TO ENFORCE THIS AGREEMENT. MARTIN HEREBY WAIVES ANY
OBJECTION WHICH HE MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON-CONVENIENS. MARTIN FURTHER AGREES THAT SERVICE OF ANY
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY AN INTERNATIONAL EXPRESS
DELIVERY SERVICE ADDRESSED TO MARTIN AT THE ADDRESS FOR NOTICE SET FORTH IN THE
SEVERANCE AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED AND TO
CONSTITUTE PERSONAL SERVICE UPON THE EARLIER OF MARTIN'S ACTUAL RECEIPT THEREOF
OR THIRTY (30) DAYS AFTER DELIVERY TO FEDERAL EXPRESS INTERNATIONAL OR OTHER
ESTABLISHED INTERNATIONAL EXPRESS DELIVERY SERVICE, DELIVERY CHARGES PREPAID.
[THIS SPACE INTENTIONALLY LEFT BLANK]
-5-
<PAGE>
IN WITNESS WHEREOF, Martin has executed two (2) original counterparts
of this Agreement under seal on this 2nd day of December, 1999.
/s/ Andrew M. Martin
-------------------------------
Andrew M. Martin
Witness:
------------------------------
-6-
EXHIBIT 10.68
-------------
SEPARATION AGREEMENT
SEPARATION AGREEMENT, dated as of December 2, 1999, is by and between
ANNIE'S HOMEGROWN, INC., a Delaware corporation with a principal place of
business at 395 Main Street, Wakefield, MA 01880 (the "Company") and DEBORAH
CHURCHILL LUSTER, an individual with a mailing address of 179 Homestead Blvd.,
Mill Valley, CA 94941 ("Luster").
WHEREAS, Luster was an employee of the Company;
WHEREAS, Luster's employment with the Company terminated in April 1999;
WHEREAS, in October 1997, the Company entered into a Stock Purchase and
Loan Agreement ("1997 Stock Loan Agreement"), as amended by Exhibit D, pursuant
to which the Company made a five-year loan to Luster in the amount of $49,735.20
bearing interest at the rate of 6.34% per annum (the "1997 Stock Loan") to
enable her to purchase shares of the Company's Common Stock upon exercise of
certain options that were previously granted to her;
WHEREAS, the 1997 Stock Loan Agreement provides for forgiveness of the
1997 Stock Loan over a five-year period if Luster remains employed by the
Company, pursuant to which one-fifth of the 1997 Stock Loan has been forgiven by
the Company as of this date;
WHEREAS, in December 1998, the Company entered into a Stock Purchase
and Loan Agreement ("1998 Stock Loan Agreement"), as amended by Exhibit E,
pursuant to which the Company made a five-year loan to Luster in the amount of
$43,236.11 bearing interest at the rate of 4.51% per annum (the "1998 Stock
Loan") to enable her to purchase shares of the Company's Common Stock upon
exercise of certain options that were previously granted to her;
WHEREAS, the 1998 Stock Loan Agreement provides for forgiveness of the
1998 Stock Loan over a five-year period if Luster remains employed by the
Company, pursuant to which none of the 1998 Stock Loan has been forgiven by the
Company as of this date;
WHEREAS, Luster currently holds, of record or beneficially, 149,092
shares of Company Common Stock; and
WHEREAS, Luster and the Company wish to set forth their respective
rights and obligations in connection with the termination of her employment with
the Company and Luster's repayment of the 1997 Stock Loan and the 1998 Stock
Loan.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Luster and the Company agree as
follows:
1. TERMINATION CONFIRMED; CONTINUING SERVICE AS A DIRECTOR.
(a) The parties confirm that Luster's employment with the Company
terminated as of April 30, 1999. Luster agrees to resign from the Board of
Directors and as Secretary effective on the Closing date of the transactions
with Homegrown Holdings Corp. ("HHC") described in a
<PAGE>
Term Sheet between HHC and the Company executed by HHC on September 21, 1999.
Luster's resignation letter, attached hereto as Exhibit A, shall be signed on
the date of this Agreement, held in escrow by the Company's counsel, and shall
be dated by Company counsel and released to the Company only on the HHC Closing
date.
(b) Upon execution of this Agreement by both parties, Luster
shall be entitled, and the Company will pay to Luster severance equal to
$6,964.16 (the "Severance"). The Severance shall be due and payable (and subject
to withholding, FICA, and similar deductions) ratably over a four-month period
in the Company's normal payroll periods.
2. OMNIBUS SECURED PROMISSORY NOTE. Luster agrees to execute the
five-year Omnibus Secured Promissory Note (the "Omnibus Note") substantially in
the form attached as Exhibit B and the Pledge Agreement attached as Exhibit C,
pursuant to which Luster agrees to repay the entire principal and accrued
interest due to the Company under the 1997 Stock Loan and the 1998 Stock Loan as
set forth on the Omnibus Note, and bearing interest at the rate of ten percent
(10%) per annum. Pursuant to the Pledge Agreement, the Omnibus Note shall be
secured by all of her shares of Company Common Stock and any proceeds therefrom.
Upon maturity, and at Luster's option, the Omnibus Note may be paid in cash or
by surrender of Luster's Common Stock, at the then fair market value as
determined by the last sale price on the principal exchange on which the
Company's Common Stock is then listed, if any, or by the Board of Directors,
acting in good faith, if not so listed. If Luster disputes the Board's
determination, the Company and Luster will negotiate in good faith and will use
their best efforts to appoint an independent appraiser of the Company's Common
Stock, whose determination will be binding on the parties. In the event that the
parties fail to agree and appoint a mutually acceptable appraiser within sixty
(60) days, the determination of value of the Company's Common Stock made by the
Board will be binding on the parties. The costs of any appraiser appointed under
this Section will be borne by Luster, unless the appraiser's determination of
the value of the Common Stock exceeds the Board's valuation by at least 10%, in
which case the Company will bear the costs of that appraiser.
3. RELEASES.
(a) Other than as expressly set forth herein, Luster, her heirs,
successors and assigns hereby remise, release and fully and forever discharge
the Company, and similarly release and discharge each of the Company's officers,
directors, stockholders, attorneys, assigns, agents, contractors,
representatives, servants, and employees who are, were or hereafter could be
liable, of and from all debts, demands, actions, causes of action, suits,
accounts, sums of money, reckoning, bonds, promises, acts, omissions, covenants,
policies, contracts, agreements, damages, executions, and any and all claims,
obligations, demands and liabilities, of whatever name, kind and nature, both in
law and in equity, both common law and statutory, both state and federal, which
against the Company or such agents Luster now has or ever had to this date with
respect or in connection with her employment by the Company or her service on
the Company's Board of Directors.
(b) Without limiting the generality of the foregoing and other
than as expressly set forth herein, Luster specifically and forever releases the
Company from any and all claims and damages arising therefrom, whether past,
present or future, asserted or which might have been
-2-
<PAGE>
asserted against the Company, including, but not limited to, those related to
Luster's employment with the Company or the termination thereof, or those
arising out of any claim of wrongful and unlawful discharge, violations of Title
VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991,
as amended, violations of the Equal Pay Act, as amended, the Age Discrimination
in Employment Act of 1967, as amended, the Americans with Disabilities Act of
1991, as amended, violations of any state or municipality fair employment
statutes or laws, or violations of any other law, rule, regulation, or ordinance
pertaining to employment wages, hours or any other terms and conditions of
employment, and termination of employment.
(c) Luster further agrees not to commence or cause to be
commenced on her behalf or otherwise any administrative charge or claim,
administrative review or legal action of any kind against the Company asserting
any claim or charge arising from, or in any way relating to, her employment with
the Company.
(d) Luster acknowledges and agrees that she freely and
voluntarily entered into this Agreement and, more specifically, the release
herein. Luster agrees that no fact, evidence, event or transaction occurring
before the execution of this Agreement, which is currently unknown to Luster,
but which may hereafter become known to Luster, shall affect in any manner the
final and unconditional nature of the agreements and releases set forth herein.
Luster acknowledges that she has been advised that she has twenty-one (21) days
to consider the releases contained in this Agreement and that she should consult
with her attorney prior to executing it. For a period of seven (7) days after
executing this Agreement, Luster may revoke this Agreement (including all of the
releases) by providing written notice of revocation to the Company and the
releases shall not become effective or enforceable until the seven-day period
has expired. In the event Luster revokes this Agreement, the entire Agreement
shall be null and void and unenforceable against either party.
(e) Other than as set forth in this Agreement, the Company and
each of its officers, directors, stockholders, attorneys, assigns, agents,
contractors, representatives, servants, and employees hereby release and fully
and forever discharges Luster, her heirs, successors, assigns and attorneys of
and from all debts, demands, actions, causes of action, suits, accounts, sums of
money, reckoning, bonds, promises, acts, omissions, covenants, policies,
contracts, agreements, damages, executions, and any and all claims, obligations,
demands and liabilities, of whatever name, kind and nature, both in law and in
equity, both common law and statutory, both state and federal, which against
Luster the Company or its agents now has or ever had to this date with respect
or in connection with her employment by the Company or her service on the
Company's Board of Directors.
(f) Without limiting the generality of the foregoing, the Company
specifically and forever releases Luster from any and all claims and damages
arising therefrom, whether past, present or future, asserted or which might have
been asserted against Luster, including, but not limited to any claim for COBRA
payments or any claims related to Luster's employment with the Company and/or
the termination thereof.
(g) The Company further agrees not to commence or cause to be
commenced on its behalf or otherwise any administrative charge or claim,
administrative review or legal action
-3-
<PAGE>
of any kind against Luster asserting any claim or charge arising from, or in any
way relating to, Luster's employment with the Company.
4. GOVERNING LAW/VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts. The
parties, for themselves and their respective successors and assigns, irrevocably
submit to the jurisdiction of the state courts in Essex County, Massachusetts
(the county in which the Company's principal executive offices are located) or
the United States District Court for the District of Massachusetts with respect
to the entry of judgments arising out of arbitration as provided in Section 6
hereof. The parties irrevocably consent to service of any and all process in any
such action or proceeding to be made upon a party not having a last and usual
address in that state by substitute service effected by registered or certified
mail to the address for that party outside that state last known to the party
commencing such proceeding. In addition, the parties irrevocably waive, to the
fullest extent permitted by law, all objections they may now or hereafter have
to the laying of venue in such courts, and further irrevocably waive any claim
that any such forum is an inconvenient forum. The parties further agree that
final judgment in any such action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by law.
5. ARBITRATION. If any dispute concerning this Agreement including but
not limited to, its existence, validity, interpretation, performance or
non-performance, arising before or after termination or expiration of this
Agreement, cannot be settled by negotiation, the parties agree first to try in
good faith to settle the dispute by mediation by the American Arbitration
Association in Boston, Massachusetts, under its Commercial Mediation Rules. If
mediation is unsuccessful, such dispute shall be settled by final and binding
arbitration before a single arbitrator in Boston, Massachusetts, who will be
mutually acceptable to the parties, in accordance with the expedited commercial
rules then in effect of the American Arbitration Association. Judgment upon any
award may be entered as provided in Section 4. The cost of such arbitration
shall be borne equally between the parties thereto unless otherwise determined
by the arbitrator.
6. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which (including signatures reproduced via facsimile)
shall be deemed an original.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understanding or agreements
concerning the subject matter hereof. This agreement may be amended, modified or
terminated only by a written instrument signed by the parties hereto.
8. INVALIDITY. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision. If any provision of this Agreement is or becomes or is deemed
invalid, illegal or unenforceable, such provision shall be deemed amended to
conform to applicable laws to the maximum extent permissible in any jurisdiction
so as to be valid and enforceable or, if it cannot be so amended without
materially altering the intention of the parties, it shall be stricken and the
remainder of this Agreement shall remain in full force and effect.
-4-
<PAGE>
9. NON-DISPARAGEMENT. The Company and each of its officers and
directors agrees not to comment in a detrimental fashion or make any disparaging
remarks about Luster, her employment by the Company, her service on the Board of
Directors or her departure from the Company. Similarly, Luster agrees not to
comment in a detrimental fashion about the Company, its management and its Board
of Directors or about her departure from the Company.
10. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Luster agrees not to
disclose and will maintain in confidence any confidential information of or
concerning the Company that she has obtained.
11. CONSULTATION WITH COUNSEL. Each party represents that she or it has
been represented by counsel in the negotiation of this Agreement, and Luster
agrees that (i) the payments, terms of repayment of the 1997 Stock Loan and the
1998 Stock Loan and value of the consideration set forth in this Agreement are
more favorable to Luster than her prior obligations to the Company; (ii) in
deciding whether to sign this Agreement, Luster has not relied on any statement
or representation other than that which is expressly set forth in this
Agreement; (iii) she knowingly and voluntarily agrees to the terms set forth in
this Agreement; and (iv) she knowingly and voluntarily intends to be legally
bound by the same.
12. NOTICES. All notices, demands and communications provided for
herein or made hereunder shall be delivered in person, sent via certified or
registered mail, return receipt requested, or sent via overnight courier
requiring a signature for delivery, or sent via facsimile, provided notice is
also given by another approved means, addressed in each case as follows, until
some other address shall have been designated in a written notice to the other
parties hereto in like manner.
If to the Company: Annie's Homegrown, Inc.
395 Main Street
Wakefield, MA 01880
Attn: President
With a copy to: Kirkpatrick & Lockhart LLP
75 State Street, 6th Floor
Boston, Massachusetts 02109
Attn: Stephen L. Palmer, Esquire
If to Luster: Deborah Churchill Luster
179 Homestead Blvd.
Mill Valley, CA 94941
13. FURTHER ASSURANCES. The parties shall each, at the request of any
of the others, furnish, execute and deliver such documents, instruments,
certificates, notices and further assurances as counsel for the requesting party
shall reasonably require as necessary or desirable to effect complete
consummation of this Agreement, or in connection with the preparation and filing
of reports required or requested by governmental agencies or other regulatory
bodies. The party requesting such documents or further assurances shall be
responsible for the costs of producing same.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
it to be executed by their duly authorized officers as of the day and date first
hereinabove written.
ANNIE'S HOMEGROWN, INC.
/s/ Deborah Churchill Luster By: /s/ Paul B. Nardone
- -------------------------------------- -----------------------
Deborah Churchill Luster, Individually Paul Nardone, President
-6-
EXHIBIT 10.69
-------------
OMNIBUS SECURED
PROMISSORY NOTE
$87,793.93 WAKEFIELD, MASSACHUSETTS
DECEMBER 2, 1999
FOR VALUE RECEIVED the undersigned, DEBORAH CHURCHILL LUSTER ("Luster")
promises to pay to the order of ANNIE'S HOMEGROWN, INC. (the "Company") at the
offices of the Company at 395 Main Street, Wakefield, MA 01880, or at such other
place as the holder of this Note may from time to time designate, in lawful
monies of the United States and in immediately available funds, the principal
sum of eighty seven thousand, seven hundred and ninety three and 93/100
($87,793.93) (or such greater amount as may result from adding thereto interest
not paid when due) (the "Principal") payable until paid in twenty (20) quarterly
installments, commencing on the date of closing of any definitive investment or
similar agreement with Homegrown Holdings Corp. ("HHC") or January 1, 2000, if
later, and on each three month and anniversary thereafter, each installment to
be equal to five percent (5%) of the original principal amount of this
Promissory Note, except that the final installment, which shall be due on the
fifth anniversary of the first installment shall be in the amount of the unpaid
balance of the Principal (if any), provided further that in all events the
entire unpaid balance of Principal and interest of this Note shall be due on the
fifth anniversary of the due date of the first installation. Interest shall be
calculated on the basis of a 365 day year.
The undersigned also promises to pay interest from the date hereof on
the principal balance of this Note outstanding from time to time, until the
principal balance is paid in full, at the rate of nine percent (9%) per annum
(the "Interest Rate"), payable on the dates principal installments are due.
Attached to this Note as Schedule A is a schedule of the amount of each
principal installment, plus accrued interest pre-computed to the date each of
said principal installments is due, which calculation shall be conclusive absent
manifest error. The Company shall have the right to revise such schedule to
reflect changes in the pre-computed interest as a result of late payments and
any delinquent interest charges added to principal as provided below. To the
extent permitted by law, any interest not paid when due shall be added to the
principal amount of this Note then outstanding. The principal amount of this
Note set forth above shall be deemed to be increased to reflect such addition,
and such additional principal amount shall thenceforth bear interest at the
Interest Rate.
All payments shall be made in lawful money of the United States in
immediately available funds, provided that at Luster's option, payment may be
made by surrendering to the Company any shares of Common Stock of the Company
which Luster owns. Any shares so surrendered shall be valued for purposes of
this Note as set forth in the Separation Agreement, dated December 2, 1999,
between Luster and the Company (the "Separation Agreement").
Overdue principal shall bear interest, payable on demand, at the rate
of fourteen percent (14%) per annum. All payments received, whether or not
designated as principal or interest,
<PAGE>
shall be applied first to any costs or expenses payable by Luster hereunder or
under the Separation Agreement, then to interest then due and the remainder to
Principal. If any payment on this Note becomes due and payable on a Saturday,
Sunday or legal holiday in Massachusetts, the maturity thereof shall be extended
to the next succeeding business day and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension.
This Note is the Omnibus Secured Promissory Note referred to in the
Separation Agreement and is subject to and entitled to the benefit of all the
terms and conditions contained in said Separation Agreement. Terms used herein
and not otherwise defined herein shall have the meanings ascribed thereto in the
Separation Agreement. This Note is secured by a Pledge Agreement (the "Pledge
Agreement"). Luster may prepay all or any part of the principal of this Note at
any time without premium or penalty, provided that any prepayment in part shall
be applied first to accrued interest to the date of prepayment and then to
principal, and that any partial prepayment shall be applied to installments of
principal in the inverse order of maturity.
Each of the following shall constitute an Event of Default hereunder:
(a) Any default by Luster in the payment when due and payable of any
principal of or interest on this Note or any part thereof provided that such
default continue for a period of fifteen days from the date upon which such
payment is due;
(b) Any default in the performance or observance by Luster of any
terms, conditions or agreements contained herein or in the Separation Agreement
or the Pledge Agreement (other than those referred to elsewhere in this
paragraph) and continuance thereof unremedied for (or if such default can not be
remedied within thirty (30) days, if action satisfactory to the Company is not
taken with respect thereto within) thirty (30) days after notice of such default
has been received by Luster from any source;
(c) The death of, adjudication of bankruptcy or insolvency of, or the
making of an assignment for the benefit of creditors by, Luster;
(d) The institution of bankruptcy, reorganization, arrangement,
liquidation, receivership, moratorium or similar proceedings by or against
Luster, and if instituted against Luster, her consent thereto or the pendency
thereof for sixty (60) days;
(e) Any statement or other information furnished by Luster to the
Company under or in connection with the Separation Agreement shall prove to be
false or misleading in any material respect as of the time made or furnished; or
(f) [Intentionally omitted.]
Luster acknowledges that if any of the events described in clauses (c)
or (d) above shall occur, this Note shall become immediately due and payable
without notice or demand, and that upon the occurrence and during the
continuance of any other Event of Default described below, the principal of this
Note and the interest accrued thereon may be declared to be immediately due and
payable, whereupon the same shall be immediately due and payable without
presentment,
-2-
<PAGE>
demand, protest or notice of any kind, all of which are expressly waived. Upon
the principal of this Note and the interest accrued thereon becoming due and
payable, the holder shall thereupon be entitled to exercise any or all of the
remedies provided herein, in the Pledge Agreement or otherwise available by law.
Without limiting the foregoing, any sums at any time credited by, due
from or distributable by the Company to Luster and any securities or other
property of Luster in the possession of the Company may at all times be held and
treated as collateral for payment of Luster's obligations. Regardless of the
adequacy of any collateral, any such sums may be applied to, set-off against or
recouped at any time with respect to any obligations of Luster on which Luster
is primarily liable, or after the maturity thereof if Luster is secondarily
liable thereon. Without limiting the foregoing, Luster expressly acknowledges
that the Company may apply to, set-off-against or recoup with respect to
Luster's obligations hereunder any amounts which become distributable to Luster
from the Company under any circumstances whatsoever.
No delay or omission on the part of the holder in exercising any rights
hereunder shall operate as a waiver of such right or of any other right of such
holder, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or waiver of the same or any other right on any future occasion. Luster
waives presentment, demand, protest and notices of every kind in connection with
the execution, delivery, acceptance, performance, default or enforcement of this
Note, and assents to any one or more extensions or postponements of the time of
payment and any other indulgences, to any impairment, substitution, exchange or
release of any property securing this obligation, and to the addition or release
of, or agreement by the holder not to sue, any other party or person primarily
or secondarily liable.
Luster agrees to pay on demand all costs of collection, including
without limitation court costs and reasonable attorneys' fees, incurred by the
holder in the enforcement or protection of holder's rights under this Note or
with respect to any collateral securing payment of this Note, or incurred in
connection with the collection of the principal of or interest on this Note.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF LUSTER AND THE
COMPANY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND MUTUALLY WAIVES HER OR
ITS (AS THE CASE MAY BE) RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM,
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATING
TO THIS NOTE OR ANY COLLATERAL HEREFOR OR ANY OTHER DOCUMENT CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, AND LUSTER
WAIVES ALL RIGHTS TO REQUIRE THE COMPANY TO ELECT AMONG ANY OF ITS REMEDIES WITH
RESPECT TO THIS NOTE OR ANY COLLATERAL. LUSTER REPRESENTS THAT SHE HAS REVIEWED
THE FOREGOING WAIVERS WITH HER LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY
WAIVED HER JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH HER LEGAL COUNSEL, AND
AGREES THAT IN THE EVENT OF LITIGATION THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT WITHOUT A JURY.
-3-
<PAGE>
THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR THE COMPANY TO ACCEPT THIS
NOTE AND MAKE THE ACCOMODATIONS CONTEMPLATED HEREBY.
All agreements between Luster and the Company with respect to the Note
are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of this Note or otherwise, shall
the amount paid or agreed to be paid to the Company for the use, forbearance or
detention of the indebtedness evidenced hereby (hereinafter referred to in this
paragraph as "interest") exceed the maximum permissible charge or rate under
applicable law. As used herein, the term "applicable law" shall mean the law in
effect as of the date hereof. In this regard, Luster and the Company expressly
stipulate that it is their intent in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the Commonwealth of
Massachusetts from time to time in effect, and that this Note shall conclusively
be deemed to have been delivered in and to be performed in the Commonwealth of
Massachusetts. If from any circumstance whatsoever, fulfillment of any provision
of this Note, or any other agreement between Luster and the Company at the time
performance of such provision shall be due, shall involve exceeding the limit
allowed by law, then the obligation to be fulfilled shall automatically be
reduced to said limit, and if from any circumstances the Company should ever
receive as interest an amount or amounts which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance of the Note and not to the payment of
interest. This provision shall control every other provision of all agreements
between Luster and the Company.
This Note shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts without application of its laws
regarding choice of law. Luster hereby consents and submits to the jurisdiction
of the Superior Courts of Essex County in the Commonwealth and the United States
District Court for the District of Massachusetts, as well as to the jurisdiction
of all courts to which an appeal may be taken or other review sought from the
aforesaid courts, for the purpose of any suit, action or other proceeding
arising out of any of Luster's obligations under or with respect to this Note or
any matter relating thereto, expressly waives any and all objections she may
have as to venue in any of such courts and personal service of the summons or
complaint or other process in any such action or suit, agrees that service of
process may be made by mailing a copy of the summons to her at her address for
notices under the Separation Agreement and consents to the granting of such
legal or equitable relief as is deemed appropriate by any such court.
-4-
<PAGE>
Executed as an instrument under seal as of the day and year first above
written.
/s/ Deborah Churchill Luster
--------------------------------------
Deborah Churchill Luster
--------------------------------------
--------------------------------------
--------------------- Zip ------------
Witness:
- ------------------------
- ------------------------
Printed Name
-5-
EXHIBIT 10.70
-------------
PLEDGE AGREEMENT
Agreement made as of December 2, 1999 by and between Deborah Churchill
Luster, an individual with a residence at 179 Homestead Boulevard, Mill Valley,
CA 94941 and ("Luster"), and Annie's Homegrown, Inc., a Delaware corporation
with a principal place of business at 395 Main Street, Wakefield, MA 01880 (the
"Company").
In consideration of loans, advances and financial accommodations made
by the Company in favor of Luster, as provided in a certain Omnibus Note of even
date herewith (the "Note"), it is hereby agreed as follows:
1. GRANT OF SECURITY INTEREST. As security for all obligations of
Luster to the Company described in Section 2 below, Luster hereby delivers and
pledges to the Company, and grants to the Company a security interest in and
lien on, all of her shares of Common Stock, par value $.001, of the Company,
together with all dividends, interest, distributions, accessions, additions and
substitutions therefor, thereto or thereon and the proceeds and products of all
the foregoing (collectively, the "Collateral"). The stock certificates
evidencing these shares have been duly endorsed or are accompanied by stock
powers duly executed in blank by Luster as the registered owner of such stock
certificates.
2. OBLIGATIONS SECURED. The Collateral from time to time held hereunder
shall secure the payment and performance of all liabilities and obligations of
Luster to the Company, whether such liabilities and obligations be direct or
indirect, absolute or contingent, secured or unsecured, due or to become due,
primary or secondary, now existing or hereafter arising or acquired, whether or
not arising under this Agreement or evidenced by any writing, including Luster's
obligations under the Note (collectively, the "Obligations").
3. REPRESENTATIONS AND WARRANTIES. Luster hereby represents and
warrants to the Company that she is the legal and beneficial owner of and has
good title to all of the Collateral, free and clear of any claim, mortgage,
pledge, lien, security interest or other encumbrance of any nature whatsoever,
except to or in favor of the Company under this Agreement.
4. ISSUANCE OR SALE OF COLLATERAL. Luster hereby covenants and agrees
that, except as consented to by the Company in writing, she will not directly or
indirectly sell, assign, pledge or otherwise encumber or dispose of the
Collateral or any interest therein.
5. VOTING RIGHTS OF LUSTER. Provided that no Event of Default (as
defined in Section 8 of this Agreement) shall have occurred and be continuing,
for so long as Luster shall be the record owner of the Collateral, Luster shall
be entitled, to the extent permitted by applicable law, to exercise voting power
with respect to any Pledged Shares; PROVIDED, HOWEVER, that in no event shall
Luster exercise such voting power in any manner contrary to or inconsistent with
the terms hereof or with the terms of the Note.
6. DISTRIBUTION ON LIQUIDATION; STOCK DIVIDENDS, ETC. In the event of
the dissolution, winding up, liquidation or reorganization of the Company,
whether in bankruptcy, insolvency or receivership proceedings, or upon an
assignment for the benefit of creditors or
<PAGE>
otherwise, except as expressly permitted by the Note, any sum to be paid or any
property to be distributed upon or with respect to any Collateral shall be paid
over to the Company to be held by it as collateral security for the Obligations.
In the event that any stock dividend shall be declared on the Collateral, or any
shares of stock or fractions thereof shall be issued pursuant to any stock split
involving any of such stock, or any distribution of capital shall be made on any
of such stock, or any property of any kind shall be distributed upon or with
respect to any of such stock pursuant to any recapitalization, reclassification,
merger, consolidation, or reorganization of the capital of the issuing
corporation, the shares or other property so distributed shall be delivered to
the Company, to be held by the Company as part of the Collateral. Any
distribution or payment of principal with respect to any note or bond included
in the Collateral shall be delivered to the Company, to be held by the Company
as part of the Collateral.
7. DIVIDENDS, VOTING RIGHTS, ETC. ON DEFAULT. If an Event of Default
shall occur and be continuing, the Company, for so long as that Event of Default
shall continue to exist, shall be entitled to receive and retain as collateral
security for the Obligations any and all dividends and other distributions at
any time and from time to time declared upon or paid with respect to any of the
Collateral and to exercise any and all voting rights and all rights of payment,
conversion, exchange, subscription or any other rights, privileges or options
pertaining to the Collateral as if the Company were the absolute owner thereof,
including, without limitation, the right to exchange, at the discretion of the
Company any and all of the Collateral consisting of securities upon any merger,
consolidation, reorganization, recapitalization or other readjustment of the
issuing corporation, and, upon the exercise of any such right, privilege or
option pertaining to the Collateral, to deposit and deliver any and all of the
Collateral with any committee, depository, transfer agent, registrar or other
designated agency upon such terms and conditions as the Company may determine,
all without liability except to account for property actually received by the
Company; PROVIDED, HOWEVER, that the Company shall have no duty to Luster to
exercise any of the aforesaid rights, privileges or options and shall not be
responsible for any failure or delay with respect to the exercise of any such
rights, privileges or options.
8. DEFAULT. If any one or more of the following events (herein referred
to as "Events of Default") shall occur:
(a) the occurrence of an Event of Default as defined by
the Note; or
(b) [intentionally omitted]
then upon the occurrence of any such Event of Default or at any time or times
thereafter, unless such Event of Default shall have been waived in writing by
the Company, the Company shall have all of the rights and remedies of a secured
party under the Uniform Commercial Code of Massachusetts and shall have full
power and authority to sell or otherwise dispose of the Collateral or any part
thereof, and, after giving written notice of such Event of Default to Luster, to
vote any Collateral consisting of voting securities with respect to any and all
matters. Any such sale or other disposition, subject to the provisions of
applicable law, may be by public or private proceedings and may be made by one
or more contracts, as a unit or in parcels, at such time and place, by such
method, in such manner and on such terms as the Company may determine. Except as
required by law, such sale or other disposition may be made without
advertisement or notice of any kind or to any person. Where reasonable
notification of the time
2
<PAGE>
or place of such sale or other disposition is required by law, such requirement
shall have been met if such notice is telegraphed, cabled or mailed, postage
prepaid, at least five days before the time of such sale or other disposition to
each person entitled thereto at each such person's address (which in the case of
Luster is as specified in Section 15 below). The Company or any other holder of
the Obligations may buy any or all of the Collateral upon any sale thereof, and
upon any such sale or sales, and the Collateral so purchased shall be held by
the purchaser absolutely free from any claims or rights of whatsoever kind or
nature, including any equity of redemption or any similar rights, all such
equity of redemption and any similar rights being hereby expressly waived and
released by Luster to the extent permitted by applicable law. In the event any
consent, approval or authorization of any governmental agency shall be necessary
to effectuate any such sale or sales, Luster shall execute, as necessary, all
applications or other instruments as may be required. After deducting all
reasonable costs and expenses of collection, custody, sale or other disposition
or delivery (including legal costs and reasonable attorneys' fees) and all other
charges due with respect to the Collateral (including any charges of the type
described in Section 10 below), the residue of the proceeds of any such sale or
other disposition shall be applied to the payment of the Obligations in such
order of priorities as is determined at the time by the Company except as
otherwise provided by law or directed by any court purporting to have
jurisdiction thereof, and any surplus shall be returned to Luster, except as
otherwise provided by law. Luster shall be liable for any deficiency.
Luster recognizes that it may not be possible or feasible for Company
to effect a public sale of all or a part of the Collateral by reason of certain
registration or filing requirements contained in the Securities Act of 1933, as
amended, or applicable state securities laws, and that Company may be compelled
to resort to one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such Collateral for
their own account for investment and not with a view to the distribution or
resale thereof. Luster agrees that private sales so made may be at a price and
on other terms less favorable to the seller than if such Collateral were sold at
public sales, and that the Company has no obligation to delay the sale of any
such Collateral for the period of time necessary to permit the same to be
registered for public sale under the Securities Act of 1933 or any applicable
state securities laws. Luster further agrees that sales made under the foregoing
circumstances shall not be deemed to have been made in a commercially
unreasonable manner by virtue of any sale being made on terms less favorable to
the seller than a public sale due to the private nature of the sale. Subject to
the foregoing, the Company agrees that any sale of the Collateral made by the
Company shall be made in a commercially reasonable manner.
9. TRANSFER OF PLEDGED STOCK AND OTHER COLLATERAL. Luster hereby
irrevocably appoints the Company as agent of Luster to arrange for any and all
transfers of the Collateral as the Company may from time to time deem advisable
to assist the Company in obtaining the benefit of the Company's security
interest therein, including, but not limited to, the transfer of the Collateral
into the name of the Company or its nominee at any time, the foregoing
appointment being deemed a power coupled with an interest.
10. PAYMENT OF TAXES, CHARGES, ETC. The Company, at its option, may
discharge any taxes, charges, assessments, security interests, liens or other
encumbrances upon the Collateral and otherwise take such actions and incur or
pay such expenses as Company deems
3
<PAGE>
necessary or advisable to protect the value of the Collateral. All such
expenditures incurred by the Company shall become payable by Luster to the
Company upon demand and shall be secured by the Collateral.
11. DUTIES WITH RESPECT TO COLLATERAL. The Company shall have no duty
to Luster with respect to the Collateral other than the duty to use reasonable
care in the safe custody of any Collateral in its possession. Without limiting
the generality of the foregoing, the Company, although it may do so at its
option, shall be under no obligation to Luster to take any steps necessary to
preserve rights in the Collateral against other parties.
12. COMPANY'S RIGHTS AND REMEDIES NOT EXCLUSIVE. All of the Company's
rights and remedies on the Obligations or the Collateral, whether evidenced
hereby or by any other agreement, instrument or paper, shall be cumulative and
may be exercised singly or concurrently, and nothing herein shall be deemed to
limit in any way any rights the Company might otherwise have under any other
instrument or by law, including, without limiting the generality thereof, the
right to negotiate any note or other instrument together with any collateral
specifically described therein.
13. WAIVERS BY LUSTER. Luster (a) waives presentment, notice, protest,
notice of acceptance of this Agreement, notice of any loans made, extensions
granted, collateral received or delivered or other action taken in reliance
hereon and all demands and notices of every kind in connection with the
delivery, acceptance, performance, default or enforcement of this Agreement, the
Collateral or the Obligations, (b) assents to any one or more renewals,
extensions or postponements of the time of payment of any of the Obligations or
any other indulgence with respect thereto, to any acquisition, substitution,
exchange or release of collateral therefor and to the addition or release of any
person primarily or secondarily liable thereon, to the acceptance of partial
payment and the settlement, compromise, adjustment or discharge of any thereof,
all in such manner and at such time or times as Company may deem advisable, (c)
agrees to the provisions of any instrument, security or other writing evidencing
any of the Obligations, and (d) shall not assert any right arising from the
discharge of any of the Obligations through realization upon Collateral or from
other payment or performance hereunder until all of the Obligations shall have
been paid, performed and fulfilled.
14. TERMINATION. The obligations of Luster under this Agreement shall
continue regardless of any reduction or increase in the Obligations until all
Collateral has been either applied thereto or returned to Luster. The Company
shall, upon written request therefor by Luster, return the Collateral to Luster
at any time after the payment in full of all Obligations.
15. NOTICES. All notices and other communications hereunder shall be
deemed to have been sufficiently given when mailed, postage prepaid by certified
or registered mail, return receipt requested,
4
<PAGE>
if to the Company, to: Annie's Homegrown, Inc.
395 Main Street
Wakefield, MA 01880
Attn: President
with a copy to: Kirkpatrick & Lockhart LLP
75 State Street
Boston, MA 02109
Attn: Stephen L. Palmer, Esq.
if to Luster, to: 179 Homestead Boulevard
Mill Valley, CA 94941
or at such other address as the party to whom such notice or demand is directed
may have designated in writing to the other party hereto in the manner provided
above.
16. RIGHTS, AMENDMENTS AND WAIVERS. No course of dealing between Luster
and the Company, nor any delay in exercising, on the part of the Company, any
right, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. Company may exercise its rights with respect to the
Collateral without resorting or regard to other collateral or sources of
reimbursement for the Obligations. No amendment, modification, consent or waiver
of any provision of this Agreement or of any of the rights of Company hereunder
or with respect to the Obligations or the Collateral shall be effective unless
in a writing executed by Company, and then such amendment, modification, consent
or waiver shall be effective only in the specific instance and for the purpose
for which given. No notice or demand on Luster in any case shall entitle Luster
to any other or further notice or demand in similar or other circumstances, or
constitute a waiver of any right of Company to take action without notice or
demand. To the extent permitted by applicable law, Luster waives its right to
trial by jury with respect to this Agreement and all rights to require Company
to elect among any of its remedies with respect to this Agreement or any other
collateral for or sources of payment of the Obligations.
17. CONSENT TO JURISDICTION; GOVERNING LAW; MISCELLANEOUS. Luster
hereby submits to the jurisdiction of the state courts in Essex County,
Massachusetts and the United States District Court for the District of
Massachusetts, as well as to the jurisdiction of all courts to which an appeal
may be taken or other review sought from the aforesaid courts, for the purpose
of any suit, action or other proceeding arising out of any of Luster's
obligations under or with respect to this Agreement, expressly waives any and
all objections it may have as to venue in any of such courts, and agrees that
service of process may be made by mailing a copy of the summons to Luster at its
address as set forth in Section 15 of this Agreement. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective, valid and enforceable under applicable law. The provisions of this
Agreement are severable, however, and if any of the provisions of this Agreement
shall be held by any court of competent jurisdiction to be unenforceable, such
holding shall not affect or impair any other provision hereof or, to the extent
not invalidated, the effect of said unenforceable provisions in other
5
<PAGE>
jurisdictions. This Agreement shall take effect as a sealed instrument and inure
to the benefit of the Company and its successors and assigns and shall be
binding upon Luster and the heirs, executors, administrators, other legal
representatives, successors and assigns of Luster. This Agreement and all the
rights and remedies of the Company and Luster shall be determined as to their
validity, construction, effect and enforcement by the laws of the Commonwealth
of Massachusetts.
IN WITNESS WHEREOF, Luster has caused this Agreement to be duly
executed as of the date first set forth above.
-------------------------
Deborah Churchill Luster
ACCEPTED AND AGREED:
ANNIE'S HOMEGROWN, INC.
/s/ Paul B. Nardone
- ------------------------------------
Paul B. Nardone, President
6
EXHIBIT 10.71
-------------
AMENDMENT TO
STOCK PURCHASE AND LOAN AGREEMENT
Reference is made to that certain Stock Purchase and Loan Agreement
(the "Original Loan Agreement"), dated as of December 21, 1998 by and between
ANNIE'S HOMEGROWN, INC. (the "Company"), a Delaware corporation and DEBORAH
LUSTER ("Key Employee"). This Amendment to the Original Loan Agreement is made
as of November __, 1999 by and between the Company and Key Employee. Capitalized
terms not defined in this Amendment shall have the meaning given to them in the
Original Loan Agreement.
BACKGROUND
----------
A. Key Employee and the Company entered into the Original Loan
Agreement to enable Key Employee to purchase Shares pursuant to certain Options
which previously were granted by the Company to Key Employee.
B. Key Employee and the Company wish to amend the Original Loan
Agreement as set forth herein.
AGREEMENT
---------
In consideration of the foregoing background and the mutual agreements
of the parties set forth in this Amendment, the Company and Key Employee agree
as follows:
1. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(i) by striking "within 45 days of the
termination date" and replacing it with "by January 1, 2000,
unless the Company closes on a transaction with Homegrown
Holdings Corp. on or before January 1, 2000, in which event Key
Employee agrees to execute an Omnibus Secured Promissory Note in
the form attached providing for repayment of the loan quarterly
over a five-year period, together with a Security Agreement and
any other required documents or instruments."
2. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(ii) by striking "for the price of $1.005
per share (plus accrued interest)" and replacing it with "at a
price equal to the greater of (A) $1.50 per Share, and (B) the
fair market value of shares of Common Stock determined with
reference to any sale of stock by the Company to a third party
that is completed on or prior to January 1, 2000."
3. The Original Loan Agreement, as amended, is hereby further
amended by striking Section 7 Pledge of Stock in its entirety.
4. In all other respects, the Original Loan Agreement is hereby
ratified and confirmed.
<PAGE>
5. This Amendment may be executed in counterparts, each of which
will be considered an original and each of which will constitute
one and the same document.
IN WITNESS WHEREOF, this Amendment has been executed as of the date
first set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Neil Raiff
-------------------------------
Neil Raiff, Chief Financial Officer
KEY EMPLOYEE:
/s/ Deborah Luster
-------------------------------
Deborah Luster
EXHIBIT 10.72
-------------
THIRD AMENDMENT TO
STOCK PURCHASE AND LOAN AGREEMENT
Reference is made to that certain Stock Purchase and Loan Agreement
(the "Original Loan Agreement"), dated as of October 1, 1997, and amended by an
Amendment to Stock Purchase and Loan Agreement dated December 31, 1997 (the
"First Amendment"), and an Amendment dated as of December 21, 1998 (the "Second
Amendment") by and between ANNIE'S HOMEGROWN, INC. (the "Company"), a Delaware
corporation and DEBORAH LUSTER ("Key Employee"). This third amendment ("Third
Amendment") to the Original Loan Agreement, as amended, is made as of
_____________________, 1999 by and between the Company and Key Employee.
Capitalized terms not defined in this Third Amendment shall have the meaning
given to them in the Original Loan Agreement.
BACKGROUND
----------
A. Key Employee and the Company entered into the Original Loan
Agreement to enable Key Employee to purchase Shares pursuant to certain Options
which previously were granted by the Company to Key Employee.
B. The Original Loan Agreement stated in Section 6 thereof that the
Principal Amount of the loan will be repaid by the Company under certain
circumstances. A computational error was made in computing the amounts of such
repayments.
C. Key Employee and the Company pursuant to the First Amendment amended
the Original Loan Agreement to correct this error, among other things.
D. Key Employee and the Company pursuant to the Second Amendment
clarified the language in the Original Loan Agreement relating to the Company's
rights upon a change of control and termination of Key Employee's employment.
E.Key Employee and the Company wish to further amend the Original Loan
Agreement, as amended, as set forth herein.
AGREEMENT
---------
In consideration of the foregoing background and the mutual agreements
of the parties set forth in this Third Amendment, the Company and Key Employee
agree as follows:
1. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(i) by striking "within 45 days of the
termination date" and replacing it with "by January 1, 2000,
unless the Company closes on a transaction with Homegrown
Holdings Corp. on or before January 1,
<PAGE>
2000, in which event Key Employee agrees to execute an Omnibus
Secured Promissory Note in the form attached providing for
repayment of the loan quarterly over a five-year period, together
with a Security Agreement and any other required documents or
instruments."
2. The Original Loan Agreement, as amended, is hereby further
amended in Section 8.4(ii) by striking "for the price of $0.80
per share (plus accrued interest)" and replacing it with "at a
price equal to the greater of (A) $1.50 per Share, and (B) the
fair market value of shares of Common Stock determined with
reference to any sale of stock by the Company to a third party
that is completed on or prior to January 1, 2000."
3. The Original Loan Agreement, as amended, is hereby further
amended by striking Section 7 Pledge of Stock --------------- in
its entirety.
4. In all other respects, the Original Loan Agreement, as amended,
is hereby ratified and confirmed.
5. This Third Amendment may be executed in counterparts, each of
which will be considered an original and each of which will
constitute one and the same document.
IN WITNESS WHEREOF, this Third Amendment has been executed as of the
date first set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Neil Raiff
--------------------------------
Neil Raiff, Chief Financial Officer
KEY EMPLOYEE:
/s/ Deborah Luster
--------------------------------
Deborah Luster
EXHIBIT 10.73
-------------
GENERAL RELEASE
---------------
In consideration for US$100,000.00, made as payment for (i) this
general release; (ii) the provision of investment banking advisory services to
Annie's Homegrown, Inc. ("Annie's") subsequent to the expiration of the
exclusive financial advisory agreement between the undersigned and Annie's,
dated September 10, 1998 (the "Engagement Letter"); and (iii) receipt of a
fairness opinion, prepared in a manner consistent with industry standards,
regarding a possible investment in Annie's by Homegrown Holdings Corp.
("Holdings"), which opinion will include (but not be limited to) an analysis of
the fairness of (a) the purchase of Annie's Preferred Stock, par value $2.00, by
Holdings, including the valuation of that Preferred Stock; (b) the execution of
a US$1 million promissory note by Annie's, and the terms and conditions thereof,
(c) the valuation and exercise price of warrants to purchase Annie's Common
Stock, par value $.001 to be issued in conjunction with that investment; and (d)
the entire transaction, including any related transactions, to Annie's and
Annie's stockholders, and for other good and valuable consideration, the receipt
and sufficiency of which the undersigned hereby acknowledges, the undersigned
hereby remises, releases and forever discharges Annie's, its predecessors and
successors in interest, and its officers, directors, stockholders, agents,
attorneys, employees, assigns and heirs ("the Releasees") of and from any and
all debts, demands, actions, causes of action, suits, accounts, covenants,
contracts, guaranties, bonds, warranties, agreements, torts, damages, statutes,
and any and all claims and liabilities whatsoever of every name and nature, both
in law and in equity, which the undersigned or any of its officers or agents may
have, have had, or may hereafter have against the Releasees, or which are based
on facts on which the undersigned now has knowledge, and specifically (but
without limiting the generality hereof) on account of or arising out of or in
connection with the engagement of the undersigned by Annie's as Annie's
exclusive financial advisor and the termination of that engagement, including,
without limitation, all claims for further compensation (including so-called
"tail compensation") or expense reimbursement of any kind in connection with
that engagement; PROVIDED, HOWEVER, that, notwithstanding any other provision in
this General Release to the contrary, the undersigned does not waive its right
to indemnification and contribution set forth in Article V of the Engagement
Letter.
The undersigned acknowledges that this is the entire agreement between
the undersigned and Annie's, and it supercedes all prior agreements,
understandings, or writings. This release may be signed in counterparts.
IN WITNESS WHEREOF, the undersigned has made this full and final
release this ____ day of November, 1999.
MCCABE, MINTZ & COMPANY, L.L.C.
/s/ Joan Y. McCabe
-------------------------
By: Joan Y. McCabe
/s/ Steven J. Mintz
-------------------------
By: Steven J. Mintz
EXHIBIT 10.74
-------------
LICENSE TERMINATION AGREEMENT
LICENSE TERMINATION AGREEMENT, by and between ANNIE'S HOMEGROWN, INC.,
("Annie's") and AHA! INK PUBLISHING, LLC, a California Limited Liability Company
a/k/a "Ah Ha Ink" ("Aha"), dated as of August 20, 1998.
WHEREAS, Annie's and Aha entered into an agreement, dated March 21,
1997, by which Annie's granted to Aha an exclusive license to various
trademarks, servicemarks, and associated goodwill for the publication of
children's books and other publications for children (the "License Agreement");
WHEREAS, pursuant to the License Agreement, Annie's has paid twenty
thousand dollars (US$20,000) for approximately 1,700 children's books;
WHEREAS, Section 11 of the License Agreement provides that the License
Agreement may not be amended or changed in any way except by a written
instrument signed by each of the parties to that agreement;
WHEREAS, Aha has ceased operations relative to the License Agreement;
WHEREAS, Annie's and Aha mutually wish to terminate the License
Agreement and all of the rights, duties, and obligations arising under that
agreement;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. TERMINATION OF LICENSE AGREEMENT. The License Agreement is hereby
terminated effective as of the date of this Termination Agreement and shall have
no further force or effect; all rights, duties, and obligations arising under
the License Agreement are hereby terminated; and all rights to tradenames,
trademarks, servicemarks, and all associated goodwill shall hereby revert to
Annie's.
2. RELEASE; WAIVER; COVENANT NOT TO SUE. Each of Annie's and Aha hereby
releases and waives all claims that they may have or ever had to this date
against the other (or any of their officers, directors, or agents) relating in
any manner to the License Agreement or this Termination Agreement, whether such
claims are matured or unmatured, liquidated or unliquidated, fixed or
contingent, arising at law or in equity; and each of Annie's and Aha covenant
not to sue the other (or any of their officers, directors, or agents) for any
claims relating in any manner to the License Agreement or this Termination
Agreement.
3. ENTIRE AGREEMENT. This Termination Agreement is complete, reflects
the entire agreement of the parties with respect to its subject matter, and
supersedes all previous written or oral negotiations, commitments, and writings.
No promises, representations, understandings, warranties, or agreements have
been made by any of the parties hereto except as referred to
<PAGE>
herein, and all inducements to the making of this Termination Agreement relied
upon by both parties hereto have been expressed herein.
4. EXECUTION IN COUNTERPARTS. For the convenience of the parties and to
facilitate execution, this Termination Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but both of which shall
constitute one and the same document.
5. FURTHER ASSURANCES. The parties shall each, at the request of any of
the others, furnish, execute and deliver such documents, instruments,
certificates, notices and further assurances as counsel for the requesting party
shall reasonably require as necessary or desirable to effect complete
consummation of this Agreement, or in connection with the preparation and filing
of reports required or requested by governmental agencies, stock exchanges or
other regulatory bodies. The party requesting such documents or further
assurances shall be responsible for the costs of producing same.
6. AMENDMENTS. This Termination Agreement may not be amended or
modified, nor may compliance with any condition or covenant set forth herein be
waived, except by a writing duly and validly executed by both parties hereto.
7. GOVERNING LAW. This Termination Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts, notwithstanding
any principle of Massachusetts law to the contrary.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date first written above.
ANNIE'S HOMEGROWN, INC. AHA! INK PUBLISHING, LLC
A/K/A AH HA INK
By: /s/ Paul Nardone By: /s/ Andrew M. Martin
----------------------- ---------------------------------
Paul Nardone, President Andrew M. Martin, CEO and Manager
Duly Authorized
By: /s/ Heather Smith Martin
---------------------------------
Heather Smith Martin, President
and Manager
-2-
EXHIBIT 10.75
-------------
SECOND AMENDMENT TO
EMPLOYMENT AGREEMENT
Reference is made to that certain Employment Agreement (the "Original
Agreement"), dated as of December 21, 1998, by and between ANNIE'S HOMEGROWN,
INC. (the "Company"), a Delaware corporation, and Paul B. Nardone (the
"Employee"), and an Amendment made to the Original Agreement, as of August 26,
1999, by and between the Company and the Employee (the "First Amendment"). This
Second Amendment to the Original Agreement is made as of December , 1999, by and
between the Company and the Employee. Capitalized terms not defined in this
Second Amendment shall have the meaning given to them in the Original Agreement.
BACKGROUND
----------
A. The Company and the Employee entered into the Original Agreement to
define and/or establish the terms and conditions of the Employee's employment
with the Company, including, but not limited to, the duration of his employment
with the Company and the compensation and bonuses to be paid to the Employee.
B. The Company and the Employee executed the First Amendment to the
Original Agreement to memorialize their intent to change or otherwise alter
certain terms and conditions of the Employee's employment with the Company,
including the duration of his employment with the Company and the compensation
to be paid to the Employee.
C. The Company and the Employee now wish to further amend the Original
Agreement as set forth herein. The intent of these amendments is to reflect the
Employee's new status as the Chief Executive Officer of the Company, effective
as of the date of this Second Amendment, and that the Employee shall no longer
serve as the Chief Operating Officer for the Company as of the date of this
Second Amendment.
AGREEMENT
---------
In consideration of the foregoing background, the mutual agreement of
the parties, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Employee agree
as follows:
1. The first and second recitals of the Original Agreement (which are
the two phrases immediately following the introductory paragraph
of the Original Agreement and beginning with the term "WHEREAS")
are hereby amended by striking the term "Chief Operating Officer,"
and inserting the term "Chief Executive Officer" in place thereof,
such that the first and second recitals shall hereinafter read as
follows:
WHEREAS, Employee is President and Chief Executive Officer of the
Company and has made and is expected to continue to make major
contributions to the Company; and
<PAGE>
WHEREAS, the Company desires Employee to continue to serve as
President and Chief Executive Officer, and Employee is willing to
provide such services under mutually satisfactory conditions as
set forth herein.
2. The first and second sentences of Section 3(a) of the Original
Agreement are hereby amended by striking the term "Chief Operating
Officer," and inserting the term "Chief Executive Officer" in
place thereof, such that the first and second sentences of Section
3(a) shall hereinafter read as follows:
During the Term, the Employee shall serve as the President and
Chief Executive Officer. In the performance of his
responsibilities as the President and Chief Executive Officer, the
Employee shall be subject to all of the Company's policies, rules
and regulations applicable to its Employees of comparable status
and shall report directly to, and shall be subject to the
direction and control of, the Board of Directors of the Company
(the "Board"), and shall perform such duties as shall be assigned
to him by the Board.
3. In all other respects, the Original Agreement is hereby ratified
and confirmed.
4. This Second Amendment may be executed in counterparts, each of
which will be considered an original and each of which will
constitute one and the same document.
IN WITNESS WHEREOF, this Second Amendment has been executed as of the
date set forth above.
ANNIE'S HOMEGROWN, INC.
By: /s/ Neil Raiff
-----------------------------------
Neil Raiff, Chief Financial Officer
EMPLOYEE:
/s/ Paul B. Nardone
---------------------------------------
Paul B. Nardone
