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                                                                   EXHIBIT 10.49

                       STOCK PURCHASE AND LOAN AGREEMENT

     This Stock Purchase, Stock Pledge, and Loan Agreement ("Agreement") is made
as of October 1, 1997, by and between ANNIE'S HOMEGROWN, INC. ("Company") and 
Deborah Churchill Luster ("Key Employee").

                                   RECITALS
                                   --------

     WHEREAS, Key Employee has performed and is expected to continue to perform 
valuable services for the Company;

     WHEREAS, the Company granted to Key Employee certain incentive stock 
options ("Options") pursuant to the Company's stockholder-approved 1990 
 Incentive Stock Option Plan;

     WHEREAS, the Options expire on October 1, 1997; and

     WHEREAS, to enable Key Employee to purchase up to Sixty Two Thousand, One 
Hundred Sixty-Nine (62,169) shares of the Company's common stock ($.001 par 
value) ("Shares") pursuant to the Options, the Company and Key Employee desire 
the Company to make a personal loan ("Loan") to Key Employee subject to the 
terms and conditions of this Agreement.

                                   AGREEMENT
                                   ---------

     NOW, THEREFORE, in consideration of the covenants, duties, terms, and 
conditions set forth in this Agreement, the parties agree as follows:

1.   Share Purchase.  Subject to the terms and conditions stated in this 
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Agreement, the Company hereby agrees to sell to Key Employee and Key Employee 
agrees to purchase 62,169 shares at the price of $0.80 per Share.

2.   Loan.  Subject to the terms and conditions stated in this Agreement, the 
     ----
Company hereby agrees to loan Key Employee $49,735.20. The amount of the Loan is
equal to the purchase price of 62,169 Shares at $0.80 per Share.

3.   Use of Proceeds.  Key Employee agrees to use all of the proceeds from the 
     ---------------
Loan to purchase, from the Company, 62,169 Shares at the price of $0.80 per 
Share.

4.   Interest.  The outstanding principal amount of the Loan shall bear interest
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("Interest") at the rate of 6.34%, compounded annually, from the date hereof to 
the date of payment. This interest rate is equal to the Mid-Term Applicable 
Federal Rate as defined in Section 1274(d) of the Internal Revenue Code of 1986,
as amended.
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5.   Payment.  Interest on any outstanding principal balance shall be payable 
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annually on October 1st of each year commencing October 1, 1998, subject to (i) 
acceleration of payment under the circumstances described below in Section 8 of 
this Agreement, and (ii) payment by the Company under Section 6 of this 
Agreement. The outstanding principal balance of the Loan, ("Principal Amount"), 
shall be due and payable in full on October 1, 2002 (the "Maturity Date"), 
subject to (i) acceleration of payment on termination of employment under the 
circumstances described below in Section 8 of this Agreement, and (ii) the 
reductions provided under Section 6 of this Agreement.

6.   Payment of Interest; Reduction of Principal Amount.
     --------------------------------------------------

     6.1.  Payment of Interest.  If, as of September 30 of each year, Key 
           -------------------
Employee is still employed with the Company, the Company agrees to pay, on Key 
Employee's behalf, all Interest associated with the Loan. Any Interest paid by 
the Company on Key Employee's behalf will not be distributed to Key Employee 
but, rather, will be automatically applied against Key Employee's Interest 
payment obligations under this Agreement. Any Interest paid by the Company on 
Key Employee's behalf will be deemed to be additional compensation income to Key
Employee.

     6.2.  Reduction of Principal Amount.  The Company agrees to reduce the 
           -----------------------------
Principal Amount as follows:

           (a)   If, as of September 30, 1998, Key Employee is still employed by
the Company, the Company agrees to forgive $9,947.04 of the Principal Amount;

           (b)   If, as of September 30, 1999, Key Employee is still employed by
the Company, the Company agrees to forgive an additional $9,947.04 of the
Principal Amount;

           (c)   If, as of September 30, 2000, Key Employee is still employed by
the Company, the Company agrees to forgive an additional $9,947.04 of the
Principal Amount;

           (d)   If, as of September 30, 2001, Key Employee is still employed by
the Company, the Company agrees to forgive an additional $9,947.04 of the
Principal Amount;

           (e)   If, as of September 30, 2002, Key Employee is still employed by
the Company, the Company agrees to forgive the remaining $9,947.04 of the
Principal Amount;

It is the parties intention that, if Key Employee continues to be employed by 
the Company as of September 30, 2002, the Principal Amount will be completely 
forgiven.

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     6.3.  Change in Control. In the event that a single person or entity (other
           -----------------
than the current shareholders of the Company) acquires more than 50% of the 
outstanding stock of the Company, then:

           (a)  The full amount of the Principal Amount not yet paid plus all 
accrued interest thereon, will become due and payable on either of such events.

           (b)  The payment of interest and reduction in Principal Amount 
provisions of Section 6.1 and 6.2 of this Agreement will also be accelerated and
the Shares will be released from the Pledge as provided in Section 7.

7.   Pledge Stock.
     ------------

     7.1.  Pledged Shares. Key Employee's obligations under this Agreement are 
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secured by the Shares, and Key Employee hereby grants the Company a security 
interest in the Shares (the "Pledged Shares"). The foregoing security interest 
shall constitute a first priority interest to secure the payment of the 
Principal Amount as such amount is reduced by Section 6 of this Agreement. All 
certificates representing the Shares, if any shall have been issued, shall be 
fully endorsed in blank by Key Employee and delivered by Key Employee to the 
Company.

     7.2   Rights of the Company as Secured Party. The Company shall have all
           --------------------------------------  
rights and remedies set forth in this Agreement and all other rights of a
secured party at law or in equity.

     7.3.  Rights Regarding Pledged Shares. The Company has the right to deliver
           -------------------------------
any or all of the Pledged Shares to any person, to have any or all of the 
Pledged Shares registered in its name or in the name of any other person, and 
Key Employee irrevocably appoints the Company its attorney-in-fact authorized at
any time during the term of this Agreement to take any actions or exercise any 
rights available to the Company under this Agreement.

     7.4.  Voting Rights. Key Employee hereby grants the Company the right to 
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vote the Pledged Shares until either Key Employee makes full payment of the 
Principal Amount and any applicable Interest or the Principal Amount is 
completely forgiven pursuant to Section 6.2 of this Agreement.

     7.5.  Key Employee's Representations Regarding Shares. Key Employee 
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represents that, as of the date of this Agreement, Key Employee has not taken 
any action that would result in the Pledged Shares being subject to any adverse 
claims, liens, or encumbrances (other than the pledge under this Agreement),
and, to her knowledge, there are no adverse claims, liens, or encumbrances on
the Pledged Shares as of the date of this Agreement.

     7.6.  Release of Security. As the Principal Amount is reduced pursuant to 
           -------------------
Section 6, Shares (at a value of $0.80/Share for this purpose) will be released 
from the

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pledge to Key Employee, i.e., 20% of the Shares after one (1) year, an 
additional 20% after two (2) years, an additional 20% after three (3) years, an 
additional 20% after (4) years, and the balance after five (5) years of 
employment. Upon full payment of the Principal Amount and any applicable 
Interest or complete forgiveness of the Principal Amount pursuant to Section 6.2
of this Agreement, the Company shall cause the Shares representing the balance 
of the Pledged Shares to Key Employee to be registered on the books of the 
Company's transfer agent.

     7.7.  Remedies Related to Collateral. Upon an Event of Default (as defined 
           ------------------------------
in Section 11 of this Agreement), the Company may, in its sole discretion and 
with or without further notice to Key Employee (in addition to all rights or 
remedies available at law or equity or otherwise): (i) register the Pledged 
Shares in the name of the Company or in any such name as the Company may decide,
and (ii) exercise any rights provided to a secured party under the applicable 
commercial code.

8.   Termination of Employment. In the event that Key Employee ceases to be 
     -------------------------
employed by the Company, the Company may purchase the Shares sold to Key 
Employee as provided in this section.

     8.1.  Termination of Employment Before July 29, 1999. In the event of 
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termination of Key Employee's employment with the Company before September 30, 
2002, the Company shall be entitled to buy back from Key Employee, Shares 
purchased pursuant to the terms of this Agreement, at a price equal to $0.80 per
Share plus 140% of interest accrued and not yet forgiven on the Loan, as 
follows:

           (a) If Key Employee's employment is terminated before September 30, 
1998, the Company will be entitled to buy back from key Employee all of the 
Shares purchased pursuant to this Agreement;

           (b) If Key Employee's employment is terminated on or after September 
30, 1998 but before September 30, 1999, the Company will be entitled to buy back
from Key Employee 49,735 Shares purchased pursuant to this Agreement;           

           (c) If Key Employee's employment is terminated on or after September 
30, 1999 but before September 30, 2000, the Company will be entitled to buy back
from Key Employee 37,301 Shares purchased pursuant to this Agreement;           

           (d) If Key Employee's employment is terminated on or after September 
30, 2000 but before September 30, 2001, the Company will be entitled to buy back
from Key Employee 24,868 Shares purchased pursuant to this Agreement;           

           (e) If Key Employee's employment is terminated on or after September 
30, 2001 but before September 30, 2002, the Company will be entitled to buy back
from Key Employee 12,434 Shares purchased pursuant to this Agreement.

     8.2.  Company's Election Not to Buy Back Shares. In the event that the 
           -----------------------------------------
Company elects not to buy back Key Employee's Shares pursuant to the terms of 
Section

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8.1 of this Agreement, Key Employee may either (i) obtain title to the Pledged 
Shares and a release of the Company's security interest in the Pledged Shares by
making full payment of the Principal Amount and any applicable Interest within 
45 days of the termination date, or (ii) sell some or all of the Shares to the 
Company for the price of $0.80 per Share (plus accrued interest) in repayment of
the Principal Amount and any applicable Interest. The Company will be obligated 
to purchase the Shares from Key Employee pursuant to this Section 8.2 if the 
Company elects not to purchase the Shares pursuant to Section 8.1 of this 
Agreement and Key Employee elects to sell the Shares back to the Company 
pursuant to the terms of this Section 8.2.

     8.3.  Termination of Employment On or After September 30, 2002 or Before 
           ------------------------------------------------------------------
September 30, 2002 for Other Than Good Cause. In the event of termination of Key
--------------------------------------------
Employee's employment with the Company on or after September 30, 2002 for any 
reason whatsoever, or in the event that the Company terminates Key Employee's 
employment before September 30, 2002 for other than Good Cause (as defined 
below), the Company will not be entitled to buy back the Shares purchased by Key
Employee pursuant to this Agreement other than as provided in Section 8.4 of 
this Agreement. Notwithstanding the foregoing, the parties may enter into a 
subsequent agreement whereby the Company agrees to purchase Shares held by Key
Employee.

           As used herein, the term "Good Cause" shall mean (i) any act or 
omission of gross negligence, willful misconduct, dishonesty, or fraud by Key 
Employee in the performance of her duties, (ii) the failure or refusal of Key 
Employee to perform the duties or to render the services assigned to her from 
time to time, (iii) the charging or indictment of Key Employee in connection 
with a felony or any misdemeanor involving dishonesty or moral turpitude, (iv) 
the material breach by Key Employee of her fiduciary duty or duty of trust to 
the Company, (v) death of Key Employee, or (vi) voluntary termination of 
employment by Key Employee.

     8.4.  Principal Amount and Interest in the Event of Termination. In the 
           ---------------------------------------------------------
event the Company exercises its right to buy back the Shares from Key Employee 
pursuant to Section 8.1 of this Agreement, 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. In the event that 
the Company terminates Key Employee's employment before September 30, 2002 for 
other than Good Cause, Key Employee may either (i) obtain title to the Pledged 
Shares and a release of the Company's security interest in the Pledged Shares by
making full payment of the Principal Amount and any applicable interest within 
45 days of the termination date, or (ii) sell Shares to the Company (and the 
Company agrees to purchase the Shares) for the price of $0.80 per Share (plus 
accrued interest) in repayment of the Principal Amount and any applicable 
Interest.

9.   Arbitration. If a dispute arises between the Company and Key Employee 
     -----------
concerning this Agreement, the disputed matter shall be submitted to arbitration
in the City of San Francisco, California, in accordance with the commercial 
arbitration rules of the American Arbitration Association ("AAA Rules"). Any 
judgment upon the award

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rendered by the arbitrators may be entered in any court having jurisdiction 
thereof. The arbitrators shall have the authority to grant any equitable and 
legal remedies that would be available in any judicial proceeding instituted to 
resolve the disputed matter. The arbitrators shall apply the laws of the State
of California in making any determination hereunder. Notwithstanding anything to
the contrary which may now or hereafter be contained in the AAA Rules, the
parties agree any such arbitration shall be conducted before a panel of three
arbitrators who shall be compensated for their services at a rate to be
determined by the American Arbitration Association in the event the parties are
not able to agree upon their rate of compensation. Each party shall have the
right to appoint one arbitrator (to be appointed within 20 days of the notice of
a dispute to be resolved by arbitration hereunder), and the two arbitrators so
chosen shall mutually agree upon the selection of the third, impartial
arbitrator. The majority decision of the arbitrators will be final and
conclusive upon the parties hereto.

10.  Payments. Any payments due from Key Employee under this Agreement shall be 
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made payable to Annie's Homegrown, Inc. and shall be sent to the Company's 
offices at 180 Second Street, Suite 202, Chelsea, MA 02150, Attention: Neil 
Raiff.

11.  Event of Default. It shall be an event of default (an "Event of Default") 
     ----------------
if Key Employee fails to pay the Company pursuant to Section 5.

12.  No Right of Employment. Nothing herein shall confer upon Key Employee the 
     ----------------------
right to continue in the employment of the Company nor affect any right which 
the Company may have to terminate the employment of Key Employee.

13.  Miscellaneous.
     -------------

     13.1.  This Agreement contains the full and complete understanding of the 
parties and supercedes all prior representations, promises, agreements, and 
warranties, whether oral or written.

     13.2.  This Agreement shall be governed by and interpreted according to the
laws of the State of California, without regard to the choice of law provisions 
thereunder.

     13.3.  With respect to the Company, this Agreement shall inure to the 
benefit of and be binding upon any successors or assigns of the Company. With 
respect to Key Employee, this Agreement shall not be assignable but shall inure 
to the benefit of estate of Key Employee or her legal successor upon death or 
disability.

     13.4.  The captions of the various sections of this Agreement are inserted 
only for convenience and shall not be considered in construing this Agreement.

     13.5.  This Agreement can be modified, amended, or any of its terms waived 
only by a writing signed by both parties.

     13.6.  If any provision of this Agreement shall be held invalid, illegal, 
or unenforceable, the remaining provisions of the Agreement shall remain in full
force and

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effect and the invalid, illegal, or unenforceable provision shall be limited or 
eliminated only to the extent necessary to remove such invalidity, illegality or
unenforceability in accordance with the applicable law at that time.

     13.7.  No remedy made available to the Company by any of the provisions of 
this Agreement is intended to be exclusive of any other remedy. Each and every 
remedy shall be cumulative and shall be in addition to every other remedy given 
hereunder as well as those remedies existing at law, in equity, by statute, or 
otherwise.

     13.8.  This Agreement 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 Agreement has been executed as of the date 
specified in the first paragraph.

                                        ANNIE'S HOMEGROWN, INC.

                                        By:   ______________________________
                                              Neil Raiff
                                        Its:  Chief Financial Officer

                                        KEY EMPLOYEE:

                                              ______________________________
                                              Deborah Churchill Luster.

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