EXHIBIT 10.67
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SECURITY AGREEMENT
AND
COLLATERAL ASSIGNMENT
XXXXXX X. XXXXXX, an individual with a mailing address of X.X. Xxx 0000
Xxxxxx Xxxxxxx, Xxxxxxx XX, Xxxxxxxx Xxxxx, Xxx Xxxxxxx (hereinafter called
"Xxxxxx"), hereby grants, pledges and assigns collaterally to ANNIE'S HOMEGROWN,
INC., a Delaware corporation having a place of business at 000 Xxxx Xxxxxx,
Xxxxxxxxx, XX 00000 (hereinafter called "Creditor"), to secure payment of
$274,630.18 as provided in Xxxxxx'x Omnibus Secured Promissory Note of even date
herewith (the "Note") and also to secure the payment and performance of all
obligations of Xxxxxx 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 Xxxxxx 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 Xxxxxx, present and future,
in, to and under or arising out of that certain Put Agreement and that certain
Call Agreement, each between Xxxxxx 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 X.
Xxxxxx hereby warrants and covenants that:
1. NO VIOLATION. The execution, delivery and performance of this
Agreement by Xxxxxx does not violate or contravene any indenture, agreement or
undertaking to which Xxxxxx is a party or by which he is bound.
2. NO OTHER LIENS OR DISPOSITIONS; INTERCREDITOR AGREEMENT. Except for
the security interest granted hereby, Xxxxxx is the owner of the Collateral free
from all encumbrances and will defend the same against the claims and demands of
all persons. Xxxxxx 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 Xxxxxx
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
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. Xxxxxx is
delivering to Creditor herewith an executed counterpart original copy of the
Stock Collar Agreement. Xxxxxx agrees that said copy of the Stock Collar
Agreement will be held by Creditor until the Note is paid in full. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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. Xxxxxx 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 Xxxxxx to make any such expenditures nor shall the making thereof
relieve Xxxxxx 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
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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 Xxxxxx can give authority therefor, enter upon any premises on
which the Collateral, or any part thereof, may be situated and remove the same
therefrom. Xxxxxx 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 Xxxxxx 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 Xxxxxx; Xxxxxx, 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)
Xxxxxx 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) Xxxxxx
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
Xxxxxx 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 Xxxxxx 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 Xxxxxx, notify
HHC and escrow agent that an Event of Default has occurred and direct them to
make payment directly to Creditor; (iii) Xxxxxx shall hold the proceeds received
from any payment in trust for the Creditor without commingling the same with
other funds of Xxxxxx and shall turn the same over
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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, xxx 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 Xxxxxx 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. Xxxxxx 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. Xxxxxx 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, Xxxxxx 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 XXXXXX 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 XXXXXX 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
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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 XXXXXX 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 XXXXXX 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
XXXXXX'X 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. XXXXXX HEREBY WAIVES ANY
OBJECTION WHICH HE MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON-CONVENIENS. XXXXXX FURTHER AGREES THAT SERVICE OF ANY
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY AN INTERNATIONAL EXPRESS
DELIVERY SERVICE ADDRESSED TO XXXXXX 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 XXXXXX'X 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]
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IN WITNESS WHEREOF, Xxxxxx has executed two (2) original counterparts
of this Agreement under seal on this 2nd day of December, 1999.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Witness:
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