Exhibit 10.25

 

FIFTH AMENDMENT AND MODIFICATION TO
LOAN AND SECURITY AGREEMENT

 

THIS FIFTH AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT (the
“Amendment”) is made this 30th day of July, 2003, by and among SHERWOOD BRANDS
OF VIRGINIA, LLC (“VA”), SHERWOOD BRANDS, LLC (“MD”), SHERWOOD BRANDS OF RI,
INC. (“RI”), ASHER CANDY, INC. (formerly known as Asher Candy Acquisition
Corporation) (“Asher”), SHERWOOD BRANDS, INC. (“Guarantor”) and WACHOVIA BANK,
NATIONAL ASSOCIATION, formerly known as First Union National Bank (the
“Lender”).  VA, MD, RI and Asher are referred to collectively as “Borrowers” or
each as a “Borrower”.

 

BACKGROUND

 

A.                                   Borrowers, Guarantor and Lender entered
into that certain Loan and Security Agreement dated June 12, 2001 (as amended by
that certain First Amendment and Modification to Loan and Security Agreement
dated April 30, 2002, that certain Second Amendment and Modification to Loan and
Security Agreement dated September 5, 2002, that certain Third Amendment and
Modification to Loan and Security Agreement dated April 7, 2003, that certain
Fourth Amendment and Modification to Loan and Security Agreement dated May 30,
2003 and as the same may be further amended from time to time, the “Loan
Agreement”).

 

B.                                     Borrowers, Guarantor and Lender desire to
further amend the Loan Agreement in accordance with the terms and conditions set
forth herein.

 

NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree
as follows:

 

1.                                     Maximum Revolving Credit.  Section
10.1(a) of the Loan Agreement, “Maximum Revolving Credit”, is hereby amended by
replacing the reference therein to “$25,000,000.00” with “$18,000,000.00”. 
Borrowers’ obligations in respect of sums due under Revolving Loans and Letters
of Credit shall continue to be evidenced by that certain Amended and Restated
Revolving Note from Borrowers to Lender dated April 30, 2002 in the face amount
of Twenty-Five Million Dollars ($25,000,000.00).  However, the Maximum Revolving
Credit shall be Eighteen Million Dollars ($18,000,000.00), notwithstanding the
face amount of such Amended and Restated Revolving Note.

 

2.                                     Subordinated Debt.

 

(A)                                  ON OR BEFORE THE DATE HEREOF, BORROWERS
SHALL RECEIVE CASH PROCEEDS OF A LOAN FROM LANA, LLC IN AN AMOUNT EQUAL TO TWO
MILLION DOLLARS ($2,000,000.00) (THE “SUBORDINATED DEBT”), WHICH AMOUNT SHALL BE
APPLIED TO THE OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOANS.

 

(B)                                 THE SUBORDINATED DEBT SHALL BE SECURED
SOLELY BY A SECURITY INTEREST IN THE ACCOUNTS RECEIVABLE AND INVENTORY OF
BORROWERS (THE “SUBORDINATED DEBT COLLATERAL”).

 

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(C)                                  THE SUBORDINATED DEBT AND THE SUBORDINATED
DEBT COLLATERAL ARE FULLY SUBORDINATED TO ALL OBLIGATIONS AND ALL LIENS,
SECURITY INTERESTS, RIGHTS AND REMEDIES IN FAVOR OF LENDER IN THE SUBORDINATED
DEBT COLLATERAL, PURSUANT TO THAT CERTAIN SUBORDINATION AGREEMENT OF EVEN DATE
HEREWITH AMONG BORROWERS, LENDER AND LANA, LLC.

 

3.                                     Permitted Out-of-Formula Amount.

 

(a)                                  In addition to the sums otherwise available
to Borrowers as Revolving Loans supported by the Borrowing Base, Borrowers may
borrow the following amounts for the following periods (the “Permitted
Out-of-Formula Amount”):

 

Period

 

Permitted Out-of-Formula Amount

 

 

 

 

 

Date hereof through and including October 31, 2003

 

$

1,000,000

 

 

 

 

 

November 1, 2003 through and including November 15, 2003

 

$

600,000

 

 

 

 

 

November 16, 2003 through and including November 30, 2003

 

$

350,000

 

 

(b)                                 At all times after November 30, 2003, no
Permitted Out-of-Formula Amount shall be available to Borrowers.

 

(c)                                  Notwithstanding anything in this Amendment
to the contrary, in no event shall the sum of the (i) Revolving Loans and
Letters of Credit supported by the Borrowing Base, plus (ii) Revolving Loans and
Letters of Credit supported by the applicable Permitted Out-of-Formula Amount,
exceed the Maximum Revolving Credit, less any Reserves.

 

4.                                     Financial Covenants.

 

(a)                                  Lender waives Borrowers’ compliance with
the Fixed Charge Coverage Ratio and Tangible Net Worth covenants set forth in
Section 6.19 of the Loan Agreement for the fiscal periods ended October 30,
2002, January 31, 2003 and April 30, 2003 only.

 

(b)                                 The foregoing waiver applies solely to the
Fixed Charge Coverage Ratio and Tangible Net Worth covenants and only for the
periods stated above.  Borrowers shall be in compliance with such covenants, as
amended, for all other periods.

 

(c)                                  Subsections (a)-(c) of Section 6.19 of the
Loan Agreement are hereby deleted in their entirety and replaced with the
following:

 

“(a)                            Borrowers shall maintain Tangible Net Worth of
not less than (i) $5,800,000.00 as of July 31, 2003; (ii) $6,800,000.00 as of
October 31, 2003; (iii) $8,700,000.00 as of January 31, 2004 and of all times
thereafter through April 29, 2004; (iv) $9,100,000.00 as of

 

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April 30, 2004; and (v) $7,250,000.00 as of July 31, 2004 and at all times
thereafter.

 

(b)                                 Borrowers’ shall maintain a Fixed Charge
Coverage Ratio of not less than (i) negative 4.32 to 1.0 for twelve (12) month
period ending July 31, 2003; (ii) negative 3.70 to 1.0 for the twelve (12) month
period ending October 31, 2003; (iii) negative 2.20 to 1.0 for the twelve (12)
month period ending January 31, 2004; (iv) .90 to 1.0 for the twelve (12) month
period ending April 30, 2004; (v) 1.75 to 1.0 for the twelve (12) month period
ending July 31, 2004; and (vi) 1.75 to 1.0 as of the end of each fiscal quarter
of Borrowers’ after July 31, 2004, measured on a rolling four (4) quarter basis.

 

(c)                                  Borrowers and Guarantor shall not, directly
or indirectly, expend or commit to expend, for fixed or capital assets
(including capital lease obligations) (collectively “Capital Expenditures”) in
aggregate amount in excess of $1,100,000.00 in the fiscal year ending July 31,
2003 and in any fiscal year thereafter.”

 

5.                                       ADDITIONAL COLLATERAL.

 

(A)                                  CONTEMPORANEOUSLY WITH THE EXECUTION OF
THIS AMENDMENT, AS ADDITIONAL SECURITY FOR THE OBLIGATIONS, BORROWERS SHALL
EXECUTE AND DELIVER TO LENDER DEEDS OF TRUST AND COLLATERAL AGREEMENTS GRANTING
TO LENDER (I) A FIRST PRIORITY MORTGAGE LIEN ON AND SECURITY INTEREST IN THE
REAL PROPERTY AND IMPROVEMENTS THEREON OWNED BY VA AND LOCATED AT 350 SHERWOOD
DRIVE, KEYSVILLE, VIRGINIA (TOGETHER WITH ALL RENTS, LEASES AND OTHER RIGHTS
WITH RESPECT THERETO) AND (II) A SECOND PRIORITY MORTGAGE LIEN ON AND SECURITY
INTEREST IN THE REAL PROPERTY AND IMPROVEMENTS THEREON OWNED BY VA AND LOCATED
AT 807 SOUTH MAIN STREET, CHASE CITY, VIRGINIA (TOGETHER WITH ALL RENTS, LEASES
AND OTHER RIGHTS WITH RESPECT THERETO) (COLLECTIVELY, THE “ADDITIONAL
COLLATERAL”).  IN CONNECTION WITH THE ADDITIONAL COLLATERAL, CONTEMPORANEOUSLY
WITH THE EXECUTION OF THIS AMENDMENT, BORROWERS SHALL CAUSE TO BE DELIVERED TO
LENDER A TITLE INSURANCE POLICY INSURING LENDER’S LIEN THEREON, WHICH POLICY
SHALL BE FROM AN INSURER AND IN FORM, CONTENT AND AMOUNT SATISFACTORY TO LENDER

 

(B)                                 FROM AND AFTER THE DATE HEREOF, REFERENCES
TO “COLLATERAL” UNDER THE LOAN AGREEMENT SHALL BE DEEMED TO INCLUDE, WITHOUT
LIMITATION, THE ADDITIONAL COLLATERAL.

 

(C)                                  ON OR BEFORE SEPTEMBER 15, 2003, BORROWERS
SHALL CAUSE TO BE DELIVERED TO LENDER, AT THE SOLE COST AND EXPENSE OF BORROWERS
(I) AN APPRAISAL ON THE ADDITIONAL COLLATERAL IN FORM, CONTENT AND PREPARED BY
AN APPRAISER SATISFACTORY TO LENDER AND (II) AN ENVIRONMENTAL AUDIT WITH RESPECT
TO THE ADDITIONAL COLLATERAL IN FORM, CONTENT AND PERFORMED BY AN ENVIRONMENTAL
ENGINEER SATISFACTORY TO LENDER.

 

6.                                     Inventory.

 

(A)                                  ON OR BEFORE SEPTEMBER 30, 2003, AT
BORROWERS’ SOLE COST AND EXPENSE, BORROWERS SHALL CAUSE TO BE DELIVERED TO
LENDER AN APPRAISAL ON BORROWERS’ INVENTORY IN FORM, CONTENT AND FROM AN
APPRAISER ACCEPTABLE TO LENDER.

 

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(B)                                 ON OR BEFORE AUGUST 22, 2003, BORROWERS,
LENDER AND BORROWERS’ CUSTOMS BROKER SHALL ENTER IN AN AGREEMENT IN THE FORM
ATTACHED HERETO AS EXHIBIT “A” REGARDING BORROWERS’ IN-TRANSIT INVENTORY AND THE
DOCUMENTS OF TITLE WITH RESPECT THERETO.

 

(C)                                  FROM AND AFTER THE DATE HEREOF, AND WITHOUT
IN ANY WAY LIMITING THE GENERALITY OF ANY PROVISIONS OF THE LOAN AGREEMENT, THE
FOLLOWING ITEMS OF INVENTORY, AS DETERMINED BY LENDER FROM TIME TO TIME, SHALL
IN NO EVENT BE DEEMED ELIGIBLE INVENTORY:

 

(I)                                     INVENTORY WHICH IS EQUAL TO OR GREATER
THAN 12 MONTHS OLD;

 

(II)                                  THAT PORTION OF A PARTICULAR ITEM OF
INVENTORY WHICH IS IN EXCESS OF THE QUANTITY OF SUCH ITEM OF INVENTORY SOLD BY
THE BORROWERS DURING THE IMMEDIATELY PRECEDING 12 MONTH PERIOD;

 

(III)                               ALL INVENTORY OF A PARTICULAR TYPE
(EXCLUDING NEW ITEMS OF INVENTORY WHICH HAD NOT BEEN PREVIOUSLY OFFERED FOR SALE
BY BORROWERS), REGARDLESS OF THE AGE THEREOF, IF NO SALES OF THAT TYPE OF
INVENTORY HAVE BEEN MADE WITHIN THE IMMEDIATELY PRECEDING 12 MONTH PERIOD; AND

 

(IV)                              INVENTORY PURCHASED OR MANUFACTURED BY
BORROWERS FOR A PARTICULAR HOLIDAY SEASON, DURING THE APPLICABLE PERIOD SHOWN ON
EXHIBIT “B” ATTACHED HERETO.  BY WAY OF EXAMPLE ONLY, INVENTORY PURCHASED OR
MANUFACTURED BY BORROWERS AND CONSISTING OF CHRISTMAS CANES WOULD NOT BE
ELIGIBLE INVENTORY FOR THE PERIOD FROM DECEMBER 26 THROUGH AND INCLUDING MARCH
1.

 

7.                                     Key Man Life Insurance.  On or before the
date hereof, Borrowers shall cause to be delivered to Lender an assignment
agreement (with the acknowledgment of the insurance issuer) in form and content
satisfactory to Lender, with respect to a key-man life insurance policy on the
life of Uziel Frydman in an amount equal to at least One Million Dollars
($1,000,000).

 

8.                                     Movement of Equipment.

 

(A)                                IN THE EVENT THAT BORROWERS DESIRE TO MOVE
ANY EQUIPMENT OF BORROWERS TO A LOCATION OUTSIDE OF THE UNITED STATES, BORROWERS
SHALL (I) PROVIDE LENDER WITH AT LEAST 5 BUSINESS DAYS PRIOR NOTICE THEREOF
(WHICH NOTICE SHALL INCLUDE IDENTIFICATION OF THE EQUIPMENT BEING MOVED), AND
(II) ON OR BEFORE THE DATE SUCH EQUIPMENT IS MOVED, PAY TO LENDER AN AMOUNT (THE
“ADDITIONAL TERM LOAN PAYMENT”) EQUAL TO THE VALUE OF SUCH EQUIPMENT AS SHOWN ON
THAT CERTAIN EQUIPMENT APPRAISAL PREPARED BY MICHAEL FOX, INC. DATED SEPTEMBER
24, 2002.

 

(B)                               EACH ADDITIONAL TERM LOAN PAYMENT SHALL BE
APPLIED TO THE OUTSTANDING PRINCIPAL BALANCE OF TERM LOAN A AND/OR TERM LOAN B
AS LENDER SHALL DETERMINE.  BORROWERS SHALL NOT BE REQUIRED TO PAY ANY
PREPAYMENT PREMIUM WITH RESPECT TO ANY ADDITIONAL TERM LOAN PAYMENT.  THE
ADDITIONAL TERM LOAN PAYMENTS SHALL BE DEEMED TO BE APPLIED TO PRINCIPAL
PAYMENTS DUE UNDER TERM LOAN A AND/OR TERM LOAN B, AS APPLICABLE, IN THE INVERSE
ORDER OF MATURITY AND SHALL NOT CHANGE THE TIMING OR AMOUNT OF THE REGULARLY
SCHEDULED PAYMENTS DUE THEREUNDER.

 

(C)                                NOTHING IN THIS SECTION 7, NOR THE RECEIPT BY
LENDER OF ANY ADDITIONAL TERM LOAN PAYMENTS, SHALL BE DEEMED TO BE A RELEASE BY
LENDER OF ITS SECURITY INTERESTS IN OR RIGHTS AND REMEDIES WITH RESPECT TO ANY
EQUIPMENT IN RESPECT OF WHICH AN ADDITIONAL TERM LOAN PAYMENT IS

 

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MADE, ALL OF WHICH SECURITY INTERESTS, RIGHTS AND REMEDIES SHALL CONTINUE IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE LOAN AGREEMENT AND EACH OF THE
OTHER LOAN DOCUMENTS.

 

9.                                     K-Mart Receivables.

 

(a)                                Without in any way limiting the generality of
any provisions of the Loan Agreement, accounts receivable of Borrowers due from
K-Mart (the “K-Mart Receivables”) which are created after the date of this
Amendment shall in no event be deemed Eligible Accounts.

 

(b)                               Lender will consent to Borrowers entering into
a factoring arrangement with a third party with respect to the K-Mart
Receivables, provided that the factor shall have an interest solely in the
K-Mart Receivables and the proceeds thereof and all documentation in connection
therewith shall be otherwise in form and content satisfactory to Lender.

 

10.                               Collateral Servicing Fee.  Section 10.5(f) of
the Loan Agreement is hereby amended by replacing the reference to “$500”
therein with “$1,900.00”.  The foregoing increase shall be deemed effective
beginning with the month of June, 2003.

 

11.                               Asher Candy, Inc.

 

(a)                                Asher has been deemed “administratively
dissolved” by the State of Wyoming.

 

(b)                               Within ten (10) days following the date
hereof, Borrower shall have completed all action necessary to cause Asher to be
in good standing in the State of Wyoming and shall have delivered evidence
satisfactory to Lender of all such action.

 

(c)                                On or before October 30, 2003, Borrower shall
cause to be delivered to Lender a good standing certificate for Asher from the
State of Wyoming, which shall be in form and content satisfactory to Lender.

 

12.                               Amendment Fee.

 

(a)                                Borrowers shall pay to Lender an amendment
fee in the amount of $100,000.00 (the “Amendment Fee”), which has been fully
earned by Lender as of the date hereof.

 

(b)                               The Amendment Fee shall be paid as follows:

 

(I)                                     $5,000.00 ON THE DATE OF EXECUTION OF
THIS AMENDMENT; AND

 

(II)                                  $95,000.00 ON THE EARLIER OF (1) DECEMBER
1, 2003, (2) THE OCCURRENCE OF AN EVENT OF DEFAULT AND DEMAND BY LENDER FOR
PAYMENT IN FULL OF THE OBLIGATIONS OR (3) TERMINATION OF THE LOAN AGREEMENT FOR
ANY REASON.

 

13.                               Further Agreements and Representations.  Each
Borrower and Guarantor does hereby:

 

(A)                                RATIFY, CONFIRM AND ACKNOWLEDGE THAT, AS
AMENDED HEREBY, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS ARE VALID,
BINDING AND IN FULL FORCE AND EFFECT;

 

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(B)                               COVENANT AND AGREE TO PERFORM ALL OF SUCH
BORROWER’S AND GUARANTOR’S OBLIGATIONS UNDER THE LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS, AS AMENDED;

 

(C)                                ACKNOWLEDGE AND AGREE THAT AS OF THE DATE
HEREOF, NEITHER ANY BORROWER NOR GUARANTOR HAS ANY DEFENSE, SET-OFF,
COUNTERCLAIM OR CHALLENGE AGAINST THE PAYMENT OF ANY SUMS OWING UNDER ANY OF THE
OBLIGATIONS, AS AMENDED, OR THE ENFORCEMENT OF ANY OF THE TERMS OF THE LOAN
AGREEMENT OR OF THE OTHER LOAN DOCUMENTS, AS AMENDED;

 

(D)                               ACKNOWLEDGE AND AGREE THAT EXCEPT AS
HERETOFORE DISCLOSED TO LENDER BY BORROWERS IN WRITING, ALL REPRESENTATIONS AND
WARRANTIES OF BORROWERS AND GUARANTOR CONTAINED IN THE LOAN AGREEMENT AND/OR THE
OTHER LOAN DOCUMENTS, AS AMENDED, ARE TRUE, ACCURATE AND CORRECT ON AND AS OF
THE DATE HEREOF AS IF MADE ON AND AS OF THE DATE HEREOF;

 

(E)                                REPRESENT AND WARRANT THAT, AFTER GIVING
EFFECT TO THIS AMENDMENT, NO EVENT OF DEFAULT OR EVENT WHICH WITH THE DELIVERY
OF NOTICE, PASSAGE OF TIME OR BOTH WOULD CONSTITUTE AN EVENT OF DEFAULT EXISTS
OR WILL EXIST AND ALL INFORMATION DESCRIBED IN THE FOREGOING BACKGROUND IS TRUE
AND ACCURATE; AND

 

(F)                                  COVENANT AND AGREE THAT BORROWERS’ OR
GUARANTOR’S FAILURE TO COMPLY WITH THE TERMS OF THIS AMENDMENT OR ANY OF THE
DOCUMENTS EXECUTED OR DELIVERED TO LENDER PURSUANT TO THE TERMS HEREOF SHALL
CONSTITUTE AN EVENT OF DEFAULT UNDER THE LOAN AGREEMENT.

 

14.                               Additional Documents; Further Assurances. 
Borrowers and Guarantor covenant and agrees to execute and deliver to Lender, or
to cause to be executed and delivered to Lender contemporaneously herewith, at
the sole cost and expense of Borrowers, all documents, agreements, statements,
resolutions, certificates, consents and information as Lender may require in
connection with the matters or actions described herein.  Borrowers and
Guarantor further covenant and agree to execute and deliver to Lender or to
cause to be executed and delivered at the sole cost and expense of Borrowers,
from time to time, any and all other documents, agreements, statements,
certificates and information as Lender shall reasonably request to evidence or
effect the terms hereof, the Loan Agreement, as amended, or any of the other
Loan Documents, or to enforce or to protect Lender’s interest in the
Collateral.  All such documents, agreements, statements, etc., shall be in form
and content acceptable to Lender in its reasonable sole discretion.

 

15.                               Release.  Borrowers and Guarantor acknowledge
and agree that they have no claims, suits or causes of action against Lender and
hereby remise, release and forever discharge Lender and its officers, directors,
shareholders, employees, agents, successors and assigns from any claims, suits
or causes of action whatsoever, in law or equity, which any Borrower or
Guarantor has or may have arising from any act, omission or otherwise, at any
time up to and including the date of this Amendment.

 

16.                               Certain Fees, Costs, Expenses And
Expenditures.  Borrowers will pay all of the Lender’s expenses in connection
with the review, preparation, negotiation, documentation and closing of this
Amendment and the consummation of the transactions contemplated hereunder,
including without limitation, fees, disbursements, expenses, appraisal costs and
fees and expenses of counsel retained by Lender and all fees related to filings,
recording of documents and searches, whether or not the transactions
contemplated hereunder are consummated.  Nothing contained herein shall limit in
any manner whatsoever Lender’s right to reimbursement under any of the Loan
Documents.

 

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17.                               No Further Amendment; No Course of Dealing. 
Nothing contained herein constitutes an agreement or obligation by Lender to
grant any further amendments with respect to any of the Loan Documents.  Except
as expressly set forth in Section 3(a) above, any waiver or implied waiver by
Lender of any obligations or covenants of Borrowers, Guarantor or any of them,
under the Loan Documents is expressly terminated and rescinded and Borrowers
shall strictly perform and comply with all obligations and covenants under the
Loan Documents.

 

18.                               Inconsistencies. To the extent of any
inconsistencies between the terms and conditions of this Amendment and the terms
and conditions of the Loan Agreement, the terms and conditions of this Amendment
shall prevail. All terms and conditions of the Loan Agreement not inconsistent
herewith shall remain in full force and effect and are hereby ratified and
confirmed by Borrowers.

 

19.                               Construction.  Any capitalized terms used in
this Amendment not otherwise defined shall have the meaning as set forth in the
Loan Agreement.

 

20.                               Binding Effect.  This Amendment, upon due
execution hereof, shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.

 

21.                               Governing Law.  This Amendment shall be
governed and construed in accordance with the laws of the Commonwealth of
Pennsylvania.

 

22.                               Severability.  The provisions of this
Amendment and all other Loan Documents are deemed to be severable, and the
invalidity or unenforceability of any provision shall not affect or impair the
remaining provisions which shall continue in full force and effect.

 

23.                               No Third Party Beneficiaries.  The rights and
benefits of this Amendment and the Loan Documents shall not inure to the benefit
of any third party.

 

24.                               Headings.  The headings of the Articles,
Sections, paragraphs and clauses of this Amendment are inserted for convenience
only and shall not be deemed to constitute a part of this Amendment.

 

25.                               Counterparts.  This Amendment may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may execute this
Amendment by signing any such counterpart.

 

(SIGNATURES ON FOLLOWING PAGE)

 

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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have caused this Amendment to be executed the day and year first above written.

 

LENDER:

 

BORROWERS:

 

 

 

WACHOVIA BANK,
NATIONAL ASSOCIATION

 

SHERWOOD BRANDS OF VIRGINIA,
LLC

 

 

a Virginia limited liability company

 

 

 

By:

/s/ George C. Kyvernitis

 

 

By:

SHERWOOD BRANDS, INC.,

 

George C. Kyvernitis, Vice President

 

 

Sole Member

 

 

 

 

 

 

 

 

By:

/s/ Amir Frydman

 

 

 

 

 

Amir Frydman

 

 

 

 

 

SHERWOOD BRANDS, LLC,

 

 

a Maryland limited liability company

 

 

 

 

 

By:

SHERWOOD BRANDS, INC.,

 

 

 

Sole Member

 

 

 

 

 

 

 

By:

/s/ Amir Frydman

 

 

 

 

 

Amir Frydman

 

 

 

 

Executive Vice President

 

 

 

 

 

SHERWOOD BRANDS OF RI, INC.

 

 

 

 

 

By:

/s/ Amir Frydman

 

 

 

 

Amir Frydman

 

 

 

Executive Vice President

 

 

 

 

 

ASHER CANDY, INC.

 

 

 

 

 

By:

/s/ Amir Frydman

 

 

 

 

Amir Frydman

 

 

 

Executive Vice President

 

 

 

 

 

 

 

 

GUARANTOR:

 

 

 

 

 

SHERWOOD BRANDS, INC.

 

 

 

 

 

By:

/s/ Amir Frydman

 

 

 

 

Amir Frydman

 

 

 

Executive Vice President

 

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EXHIBIT “B”

 

Type of Inventory

 

Period of Exclusion from Eligible Inventory

 

 

 

Christmas Canes

 

December 26 through and including March 1

 

 

 

Christmas Gift items

 

December 26 through and including April 30

 

 

 

All other Christmas Categories

 

December 26 through and including June 30

 

 

 

Valentines items

 

February 15 through and including May 31

 

 

 

Easter items consisting of finished goods

 

Day after Easter through and including September 30

 

 

 

Halloween items

 

October 31 through and including March 31

 

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