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Exhibit 10.25

REVOLVING FUND LOAN AGREEMENT

        THIS LOAN AGREEMENT, made and entered into this 13th day of August,
2002, by and between SHERWOOD BRANDS, INC., a North Carolina corporation, (the
"Borrower") and LAKE COUNTRY DEVELOPMENT CORPORATION, a Virginia non-stock
corporation, (the "Lender").

        WHEREAS, the Borrower desires to borrow from Lender, funds for the
purchase of new equipment for the expansion of its facility located in Chase
City, Mecklenburg County, Virginia (The "Project"), the sum of THREE HUNDRED
FIFTY THOUSAND and 00/100 Dollars ($350,000.00) to be secured as hereinafter
provided; and

        WHEREAS, Borrower and Lender desire to set out certain terms and
provisions which will govern said loan.

        NOW, THEREFORE, THIS AGREEMENT WITNESSETH:

        That for and in consideration of the loan of THREE HUNDRED FIFTY
THOUSAND and 00/100 Dollars ($350,000.00) from Lender to Borrower and the
benefits to be derived by Borrower thereby and the mutual covenants and promises
hereinafter contained. Borrower and Lender agree as follow:

        1.    That Lender agrees to loan and does hereby loan to Borrower the
sum of THREE HUNDRED FIFTY THOUSAND and 00/100 Dollars ($350,000.00) "the Loan"
out of Lender's Revolving Loan Fund, the receipt of which is hereby
acknowledged.

        2.    Borrower shall make and deliver to Lender its promissory note in
writing requiring the repayment of the sum of THREE HUNDRED FIFTY THOUSAND and
00/100 Dollars ($350,000.00) to Lender in monthly installments of Four Thousand
Seven Hundred Eighty Four and 08/100 Dollars ($4,784.08) for eighty-four
(84) months after this date with interest at the rate of four percent (4.0%) per
annum at the office of Lender, 200 South Mecklenburg Avenue, P. O. Box 150,
South Hill, Virginia 23970, or at such other place as Lender may designate in
writing. Payments under said note shall be deemed late if not paid within
fifteen (15) days of the due date, and Borrower shall pay Lender a late penalty
of five percent (5%) of all past due payments in the event of such late payment,
calculated on the accumulated late payments and penalties, as more particularly
provided in the Note.

        3.    The parties hereto covenant and agree that Borrower shall give to
Lender a security interest in the project equipment listed in Exhibit A. Once
the entire indebtedness of the Lender is paid, including principal, interest and
any fees thereon, the lien of Lender shall be released.

        4.    Lender agrees that prepayment of principal may be made at any time
without penalty.

        5.    Borrower and Lender hereby covenant and agree to maintain, or
cause to be maintained, fire and casualty insurance on the building and
equipment, which is the collateral for the Loan which is subject to this
agreement in the amount of the principal balance of all loans made by Wachovia
Bank, N.A. PLUS it least THREE HUNDRED FIFTY THOUSAND and 00/100 Dollars
($350,000.00), with a loss payable clause to Lake Country Development
Corporation, or its assigns as their interests may appear.

        6.    Borrower hereby agrees to provide Lender a copy of its annual
audited financial statements in conformity with generally accepted accounting
principles within 90 days of the end of the fiscal year and prepared by a
certified public accountant. Borrower will provide a statement from Wachovia
Bank every 6 months reflecting the outstanding balance of Borrower's revolving
line of credit with Wachovia. This balance must always exceed the outstanding
balance of this Loan.

        7.    Borrower hereby agrees to use all funds borrowed from Lake Country
Development Corporation solely for the purchase of new equipment to expand
Borrower's business facilities located

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in Chase City, Mecklenburg County, Virginia, as stated in the application. In no
event may the funds be used to generate interest or to arbitrage the loan funds.

        8.    Borrower hereby agrees that it must create sixty five (65) jobs
within twenty four(24) months of the completion of the Project. If at least one
job for every $10,000.00 borrowed (35 jobs) has not been met within two
(2) years, the loan will be called. A good faith effort must be made to create
65 jobs. Borrower will provide a job report to Lender in such format prescribed
by the Lender on a semi-annual basis, due annually in February and July of each
year.

        9.    Borrower hereby agrees that if its facility is intended for use by
the public or for the employment of physically handicapped, it must be
accessible to the physically handicapped, pursuant to Public Law 90-480, as
amended (42 U.S.C. 4151, et seq.), and the regulations issued thereunder.

        10.  Borrower agrees to comply with civil rights requirements which
prohibit borrower from discriminating against employees or applicants for
employment or providers of goods and services.

        11.  Borrower agrees to comply with all applicable environmental
protection laws and statutes and represents the following:

a.The Borrower (including for purposes of this Section any former or current
Affiliate of the Borrower) is in, material compliance with all applicable laws,
rules, regulations and orders of all governmental authorities, agencies and
officials relating to environmental matters and the release, handling and
disposal of hazardous, toxic and polluting substances.

b.The Borrower has obtained and is in material compliance with all required
Governmental permits, certificates, licenses, approvals and other
authorizations, and has filed all notifications relating to air emissions,
effluent discharges and solid and hazardous waste storage, treatment and
disposal required in connection with its ownership or use of real estate or the
operation of its business.

c.There are no outstanding notices of violation, orders, claims, citations,
complaints, penalty assessments, suits or other proceedings, administrative,
criminal or civil, at law or in equity, pending against the Borrower or its
properties that would have a material adverse effect on the Borrower's business,
financial position, results of operations or prospects or on any facility or the
operation of any facility. No investigation or review is pending or to the
knowledge of the Borrower threatened against the Borrower by any governmental
body, agency or official with respect to any alleged violation of any
Environmental Law, regulation, ordinance, standard, pen-nit or order in
connection with its ownership or use of any real estate or the conduct of its
business.

d.No toxic or hazardous substances have been generated by the Borrower. No
notification of release of a hazardous substance pursuant to any Environmental
Law has been filed as to any property now or formerly occupied or owned by the
Borrower.

e.No hazardous, toxic or polluting substances have been released, discharged or
disposed of on property now or formerly owned or occupied by the Borrower which
could result in an action under any Environmental Law which could have a
material adverse effect on the Borrower's business, financial position, results
of operations or prospects or any facility or operation of such facility.

f.The Borrower has not received from any environmental regulatory entity any
requests for information, notices of claim, demand letters or other notification
that in connection with the ownership or use of any real estate or the conduct
of the Borrower's business is or may be potentially responsible with respect to
any investigation or clean-up of hazardous substances or toxic waste or
pollutants at any sites.

g.To the best knowledge of the Borrower, no waste generated by the Borrower has
ever been sent, nor is waste: generated by the Borrower being sent, directly or
indirectly, to any site

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listed or formerly, proposed for listing on the National Priority, List
promulgated pursuant to CERCLA or to any site listed on any state list of
hazardous substances sites requiring investigation or clean up.

h."Environmental Law" means and includes any present and future local, state,
federal or intentional law or treaty (whether under common law, statute, rule,
regulation or otherwise) relating to public health, safety or the environment,
including, by way of example, but not limitation, the following: the Recourse
Conservation and Recovery Act 42 U.S.C. 6901, et seq., as amended by the
Hazardous and Solid Waste Act Amendments of 1984; the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq.,
as amended by the Superfund Amendments and Reauthorization Act of 1986, the
Hazardous Materials Transportation Act, 49 U.S.C. 1802, et seq.; the Rivers and
Harbors Act of 1899, 33 U..S.C. 401, et seq.; the Clean Water Act, 33 U.S.C.
1251, et seq.; the Clean Water Act, 42 U.S.C. 7401, et seq.; the Toxic
Substances Control Act, 15 U.S.C. 26015 et seq.; the Safe Drinking Water Act, 42
LI.S.C. 7901.300f, et seq.; the Uranium Mill Tailings Radiation Control Act, 42
U.S.C. 7901, et seq.; the Federal Occupational Safety and Health Act, 29 U.S.C.
651, et seq.; the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
136, et seq., the National Environmental Policy Act, 42 U.S.C. 4321, et seq.;
the Noise Control Act, 42 U.S.C. 4901, et seq., the Emergency Planning and
Community Right to Know Act of 1986, 42 U.S.C. 11001, et seq.; the Lead Based
Paint Poisoning Prevention Act, 42 U.S.C. 4821, et seq., The Chesapeake Bay,
Prevention Act, VA Code Section 10.1-2100 et seq., and any Regulations now or
hereafter promulgated pursuant thereto and, as to all of the foregoing, the
amendments, regulations, orders, decrees, permits or licenses now or hereafter
promulgated thereunder as any of the foregoing now exist or may be changed or
amended or come into effect in the future.

        12.  Borrower hereby agrees that it shall be responsible for all closing
costs of this Loan, and shall pay upon closing this Loan to Lake Country
Development Corporation for a fee of TWO THOUSAND FIVE HUNDRED and 00/100
Dollars ($2,500.00), for its administrative/service fee.

        13.  The parties hereto acknowledge, agree and understand that the
Lender cannot be a sole lender and that, accordingly, an additional loan was
made to Borrower by Wachovia Bank, Primary Lender, for the improvement of
Borrower's facilities in the Town of Chase City, Mecklenburg County, Virginia,
Accordingly, the parties hereto, acknowledge and covenant that the loan to
Borrower by Wachovia Bank has been completed and the loan funds were disbursed
to Borrower prior to the disbursement of these funds.

        14.  If all or any part of the property securing the loan or an interest
therein is sold or transferred by Borrower without Lender's prior written
consent, excluding the creation of a lien or encumbrance subordinate to this
lien, Lender, by operation of law, may at Lender's option declare all sums
secured by this agreement to be immediately due and payable. Lender shall have
waived such option to accelerate if, prior to the sale or transfer, Lender and
the entity to whom the property is to be sold or transferred reach an agreement
in writing that the credit of such entity is satisfactory to Lender and that the
interest payable on the sums secured by this agreement shall be at such rate as
Lender shall request. If Lender has waived the option to accelerate provided
herein, and if Borrower's successor in interest has executed a written
assumption agreement accepted in writing by Lender, Lender shall release
Borrower from all obligations under this agreement.

        15.  If any clause, provision or section of this Revolving Loan Fund
Agreement be held illegal or invalid by any court, the illegality or invalidity
of such clause, provision or section shall not affect any of the remaining
clauses, provisions or sections hereof, and this Revolving Fund Loan Agreement
shall be construed and enforced as if such illegal or invalid clause, provisions
or sections had not been contained herein.

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        16.  Feminine or neuter pronouns are to be substituted for those of the
masculine form and the plural is to be substituted for the singular number in
any place or places herein in which the context may require such substitution.

        17.  THE BORROWER ACKNOWLEDGES THAT THE FAILURE TO COMPLY WITH ANY
PROVISION OF THIS AGREEMENT MAY RESULT IN THE LENDER, AT ITS OPTION,
ACCELERATING THE DUE DATE OF THIS LOAN AND DECLARING THAT THE ENTIRE BALANCE,
PRINCIPAL AND INTEREST, SHALL BECOME DUE AND PAYABLE AT T HE OPTION OF T HE
HOLDER OF THE PROMISSORY NOTE.

        18.  This Agreement shall be construed and interpreted according to the
laws of the Commonwealth of Virginia.

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        IN WITNESS WHEREOF, Sherwood Brands, Inc., (Borrower), and Lake Country
Development Corporation (Lender), have caused this agreement to be duly executed
by their respective proper corporate officers who have been duly and properly
empowered to do so by proper resolution of any board of directors, and they have
hereunto set their hands and seals, all on the day and year first above written.

    SHERWOOD BRANDS, INC.
A North Carolina Corporation
 
 
By:
/s/  UZIEL FRYDMAN      

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Uziel Frydman
Chairman, President and CEO
ATTEST:
 
 
 
/s/  CHRISTOPHER J. WILLI      

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Christopher J. Willi, Secretary
 
 
 
 
 
LAKE COUNTRY DEVELOPMENT CORPORATION
A Virginia Non-Stock Corporation
 
 
By
/s/  F. RANDOLPH JONES      

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F. Randolph Jones, President
ATTEST:
 
 
 
/s/  GERALD VINCENT      

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Gerald Vincent, Secretary
 
 
 

ANY PROVISION OF THIS AGREEMENT MAY RESULT IN THE LENDER, AT ITS OPTION,
ACCELERATING THE DUE DATE OF THIS LOAN AND DECLARING THAT THE ENTIRE BALANCE,
PRINCIPAL AND INTEREST, SHALL BECOME DUE AND PAYABLE AT THE OPTION OF THE HOLDER
OF THE PROMISSORY NOTE.

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PROMISSORY NOTE

$350,000.00

August 13, 2002
South Hill, Virginia

        FOR VALUE RECEIVED, SHERWOOD BRANDS, INC., a North Carolina Corporation,
Borrower, promises to pay to the order of Lake County Development Corporation, a
Virginia Non-Stock Corporation, Lender, the sum of THREE HUNDRED FIFTY THOUSAND
AND 00/100 DOLLARS ($350,000.00), with interest thereon from date until paid, at
Four Percent (4.0%) per annum, negotiable and payable at the office of the
payee, 200 South Mecklenburg Avenue, P. 0. Box 150, South Hill, Virginia 23970,
or at such other place as the holder of the note may designate in writing from
time to time, without offset. It is further agreed by the makers and endorsers
hereof that time is of the essence. And the makers and endorsers hereof waive
the benefit of the homestead exemptions as to this debt; and waive notice of
maturity, presentment, demand, protest, and notice of nonpayment and dishonor of
this note; and agree to pay all costs of collection, including reasonable
attorney's fees, if it becomes necessary to place this note in the hands of an
attorney for collection. The makers and endorsers hereof agree that 15 days
after the giving of 10 days notice to the undersigned of default (a) of a
payment of any installment hereof, or (b) in the observance of any uncured
violation of any covenant contained in the Revolving Fund Loan Agreement, or any
other document executed in connection with this loan, the entire balance,
principal and interest, shall become due and payable at the option of the holder
or holders hereof. Failure to exercise said option shall not constitute a waiver
of the right to exercise the same in the event of any subsequent default.

        This note is payable in eighty four (84) equal monthly installments of
FOUR THOUSAND SEVEN HUNDRED EIGHTY FOUR and 08/100 DOLLARS ($4,784.08)
commencing on the lst day of October, 2002 and on the lst day of each and every
month thereafter until paid, except if not sooner paid, the entire indebtedness
shall be due and payable on September 1, 2009.

        Optional prepayment is permitted at any time in whole or in part without
Penalty. Any such partial payment shall be applied to installments of principal
in inverse chronological order, but such prepayments shall not reduce the amount
of the monthly payments set forth above. Payments not received by the 15th day
of the month in which they are due shall be subject to a late charge of five
percent (.5%), provided said late charge shall apply on the accumulated late
monthly installments and penalty as set forth herein or as determined in
accordance herewith, and shall not operate or be construed to apply to the
outstanding principal balance of this Note in the event the same becomes due and
payable prior to maturity.

        This note is secured by Personal properly listed on Exhibit A located in
Chase City, Mecklenburg County, Virginia.

        IN WITNESS WHEREOF, SHERWOOD BRANDS, INC., a North Carolina Corporation,
have caused this note to be duly executed by its proper corporate officers who
have been duly and properly empowered to do so this 13th day of August, 2002.

    SHERWOOD BRANDS, INC.
 
 
By
/s/  UZIEL FRYDMAN      

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Uziel Frydman
Chairman, President and CEO
ATTEST:
 
 
 
/s/  CHRISTOPHER J. WILLI      

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Christopher J. Willi, Secretary
 
 
 

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Exhibit 10.25

REVOLVING FUND LOAN AGREEMENT
PROMISSORY NOTE