**Exhibit10.29**

 

**FOURTEENTHAMENDMENT AND MODIFICATION TO****LOANAND SECURITY AGREEMENT**

 

**THIS FOURTEENTH AMENDMENT AND MODIFICATION TO LOAN ANDSECURITY AGREEMENT**(the **“Amendment”**) is dated as of September 30,2004 by and among **SHERWOOD BRANDS OFVIRGINIA, LLC**(**“VA”**), **SHERWOOD BRANDS, LLC** (**“MD”**), **SHERWOODBRANDS OF RI, INC.**(**“RI”**),**ASHER CANDY, INC. (formerly known as AsherCandy Acquisition Corporation)**(**“Asher”**),**SHERWOOD BRANDS, INC.** (**“Guarantor”**) and **WACHOVIA BANK, NATIONAL ASSOCIATION**, formerly known as FirstUnion National Bank (the **“Lender”**).  VA, MD, RI and Asher are referred tocollectively as **“Borrowers”** oreach as a **“Borrower”**.

 

**BACKGROUND**

 

# A.                                   Borrowers, Guarantor andLender entered into that certain Loan and Security Agreement dated June 12,2001 (as amended by that certain First Amendment and Modification to Loan andSecurity Agreement dated April 30, 2002, that certain Second Amendment andModification to Loan and Security Agreement dated September 5, 2002, thatcertain Third Amendment and Modification to Loan and Security Agreement dated April 7,2003, that certain Fourth Amendment and Modification to Loan and SecurityAgreement dated May 30, 2003, that certain Fifth Amendment and Modification toLoan and Security Agreement dated July 30, 2003 (the **“FifthAmendment”**), that certain Sixth Amendment and Modification to Loanand Security Agreement dated November 24, 2003, that certain SeventhAmendment and Modification to Loan and Security Agreement dated February 13,2004, that certain Eighth Amendment and Modification to Loan and SecurityAgreement dated April 8, 2004, that certain Ninth Amendment andModification to Loan and Security Agreement dated June 11, 2004, thatcertain Tenth Amendment and Modification to Loan and Security Agreement dated July 31,2004, that certain Eleventh Amendment and Modification to Loan and SecurityAgreement dated August 20, 2004, that certain Twelfth Amendment andModification to Loan and Security Agreement dated August 31, 2004, thatcertain Thirteenth Amendment and Modification to Loan and Security Agreementdated September 13, 2004 and as the same may be further amended from timeto time, the **“Loan Agreement”**).

 

# B.                                     Borrowers and Guarantorshave requested that Lender extend the Term and further amend the Loan Agreementin accordance with the terms and conditions set forth herein.

#  

**NOW, THEREFORE**, intending to be legally bound hereby, the parties hereto agree asfollows:

 

## 1.                                       **Confirmation of Background**. Borrowers and Guarantor ratify, confirm and acknowledge that the statementscontained in the foregoing Background are true, accurate and complete in allrespects.

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## 2.                                       **Permitted Out-of-Formula Amount**.  ThePermitted Out-of-Formula Amount, as defined in the Eighth Amendment, shallremain available to Borrowers through October 8, 2004, subject to all ofthe terms and conditions set forth therein and in the Loan Agreement.

 

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## 3.                                       **Term**.  **Section 10.4** of the LoanAgreement is deleted in its entirety and replaced with the following:

##  

“10.4  **Term**.                              Terminating on October 8, 2004.”

 

## 4.                                       **Interest on the Loans**.

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### (a)                                  Interest on Revolving Loans. Commencing September 1, 2004, **Section 10.5(a)**of the Loan Agreement is hereby deleted in its entirety and replaced with thefollowing:

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“(a)                            Applicable Percentage for Revolving Loans                                                        3%”

 

### (b)                                 Interest on Term Loans. Interest on the unpaid principal balance of Term Loan A and Term Loan Bshall accrue from September 1, 2004 until final payment thereof at a perannum rate of interest equal to the Prime Rate, plus three and one-half of onepercent (31⁄2%).

###  

### (c)                                  Eurodollar Loans/LIBOR Market Rate Loans.  Fromand after September 1, 2004, neither Eurodollar Loans, LIBOR Market RateLoans nor loans based on the Term Loan LIBOR Market Rate shall be available toBorrowers.

###  

## 5.                                       **Further Agreements andRepresentations****.** EachBorrower and Guarantor does hereby:

##  

### (a)                                  ratify, confirm and acknowledge that, asamended 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’sand Guarantor’s obligations under the Loan Agreement and the other LoanDocuments, as amended;

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### (c)                                  acknowledge and agree that as of the datehereof, neither any Borrower nor Guarantor has any defense, set-off,counterclaim or challenge against the payment of any sums owing under any ofthe Obligations, as amended, or the enforcement of any of the terms of the LoanAgreement or of the other Loan Documents, as amended;

###  

### (d)                                 acknowledge and agree that except asheretofore disclosed to Lender by Borrowers in writing, all representations andwarranties of Borrowers and Guarantor contained in the Loan Agreement and/orthe other Loan Documents, as amended, are true, accurate and correct on and asof the date hereof as if made on and as of the date hereof;

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### (e)                                  represent and warrant that, no Event ofDefault or event which with the delivery of notice, passage of time or bothwould constitute an Event of Default exists or will exist; and

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### (f)                                    covenant and agree that Borrowers’ orGuarantor’s failure to comply with the terms of this Amendment or any of theother Loan Documents shall constitute an Event of Default under the LoanAgreement.

###  

## 6.                                       **Additional Documents;Further Assurances****.**  Borrowers and Guarantor covenant and agreesto execute and deliver to Lender, or to cause to be executed and delivered toLender contemporaneously herewith, at the sole cost and expense of Borrowers,all documents, agreements,

 

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## statements, resolutions,certificates, consents and information as Lender may require in connection withthe matters or actions described herein. Borrowers and Guarantor further covenant and agree to execute anddeliver to Lender or to cause to be executed and delivered at the sole cost andexpense of Borrowers, from time to time, any and all other documents,agreements, statements, certificates and information as Lender shall reasonablyrequest 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’sinterest in the Collateral.  All suchdocuments, agreements, statements, etc., shall be in form and contentacceptable to Lender in its reasonable sole discretion.

##  

## 7.                                       **Release****.** Borrowers and Guarantor acknowledge and agree that they have no claims,suits or causes of action against Lender and hereby remise, release and foreverdischarge 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 fromany act, omission or otherwise, at any time up to and including the date ofthis Amendment.

##  

## 8.                                       **Certain Fees, Costs,Expenses And Expenditures**.  Borrowers will pay all of the Lender’sexpenses in connection with the review, preparation, negotiation, documentationand closing of this Amendment and the consummation of the transactionscontemplated hereunder, including without limitation, fees, disbursements,expenses, appraisal costs and fees and expenses of counsel retained by Lenderand all fees related to filings, recording of documents and searches, whetheror not the transactions contemplated hereunder are consummated.  Nothing contained herein shall limit in anymanner whatsoever Lender’s right to reimbursement under any of the LoanDocuments.

##  

## 9.                                       **No Further Amendment; NoCourse of Dealing**.  Nothing contained herein constitutes anagreement or obligation by Lender to grant any further amendments with respectto any of the Loan Documents.  Any waiveror implied waiver by Lender of any obligations or covenants of Borrowers,Guarantor or any of them, under the Loan Documents is expressly terminated andrescinded and Borrowers shall strictly perform and comply with all obligationsand covenants under the Loan Documents.

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## 10.                                 **Inconsistencies.** To the extent of any inconsistencies betweenthe terms and conditions of this Amendment and the terms and conditions of theLoan Agreement, the terms and conditions of this Amendment shall prevail. Allterms and conditions of the Loan Agreement not inconsistent herewith shallremain in full force and effect and are hereby ratified and confirmed byBorrowers.

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## 11.                                 **Construction.**  Anycapitalized terms used in this Amendment not otherwise defined shall have themeaning as set forth in the Loan Agreement.

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## 12.                                 **Binding Effect.**  ThisAmendment, upon due execution hereof, shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns.

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## 13.                                 **Governing Law.**  ThisAmendment shall be governed and construed in accordance with the laws of theCommonwealth of Pennsylvania.

 

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## 14.                                 **Severability**.  Theprovisions of this Amendment and all other Loan Documents are deemed to beseverable, and the invalidity or unenforceability of any provision shall notaffect or impair the remaining provisions which shall continue in full forceand effect.

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## 15.                                 **No Third Party Beneficiaries**.  Therights and benefits of this Amendment and the Loan Documents shall not inure tothe benefit of any third party.

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## 16.                                 **Headings**.  Theheadings of the Articles, Sections, paragraphs and clauses of this Amendmentare inserted for convenience only and shall not be deemed to constitute a partof this Amendment.

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## 17.                                 **Counterparts**.  ThisAmendment may be executed in any number of counterparts, all of which takentogether shall constitute one and the same instrument, and any of the partieshereto may execute this Amendment by signing any such counterpart.

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## **[SIGNATURESON FOLLOWING PAGE]**

 

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**IN WITNESS WHEREOF**, the parties hereto, intending to be legally bound hereby, have causedthis 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.,** |
|                                     | Georgios C. Kyvernitis, Director         |   | 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 |
|                                          |                                          |  |  |  |  |  |  |  |  |  |  |  |  |

 

**(SIGNATURESCONTINUED ON FOLLOWING PAGE)**

 

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**(SIGNATURES CONTINUED FROM PREVIOUS PAGE)**

 
| ** ** | **GUARANTOR:**            |
|------------|---------------------------|
|       |                      |   |
| ** ** | **SHERWOOD BRANDS, INC.** |
|       |                      |   |
|       |                      |   |
|       | By:                       | /s/  Amir Frydman |   |
|       |                      | Amir Frydman |
|       |                      | Executive  Vice President |
|            |                           |  |  |  |

 

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