**Exhibit 10.24**

** **

**NINTHAMENDMENT AND MODIFICATION TO**

**LOAN AND SECURITY AGREEMENT**

 

**THIS NINTHAMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT** (the **“Amendment”**)is made this 11th day of June, 2004, 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 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 and Lender entered into that certain Loan and Security Agreementdated June 12, 2001 (as amended by that certain First Amendment andModification to Loan and Security Agreement dated April 30, 2002, that certainSecond Amendment and Modification to Loan and Security Agreement datedSeptember 5, 2002, that certain Third Amendment and Modification to Loan andSecurity Agreement dated April 7, 2003, that certain Fourth Amendment andModification to Loan and Security Agreement dated May 30, 2003, that certainFifth Amendment and Modification to Loan and Security Agreement dated July 30,2003,  that certain Sixth Amendment andModification to Loan and Security Agreement dated November 24, 2003; thatcertain Seventh Amendment and Modification to Loan and Security Agreement datedFebruary 13, 2004; and that certain Eighth Amendment and Modification to Loan andSecurity Agreement dated April 8, 2004 and as the same may be further amendedfrom time to time, the **“Loan Agreement”**).

#  

# B.            Borrowersare in default under the Loan Agreement for failure as of April 30, 2004 tocomply with the Tangible Net Worth requirement set forth in Section 6.19(a) ofthe Loan Agreement and the Fixed Charge Coverage Ratio set forth in Section6.19(b) of the Loan Agreement (the **“Existing Defaults”**).

#  

# C.            Notwithstandingthe existence of the Existing Defaults Borrowers and Guarantors have requestedthat Lender extend the Term and further amend the Loan Agreement in accordancewith the terms and conditions set forth herein.

#  

**NOW,THEREFORE**, intendingto be legally bound hereby, the parties hereto agree as follows:

 

## 1.             **Confirmation of Background**.  Borrowers and Guarantor ratify, confirm andacknowledge that the statements contained in the foregoing Background are true,accurate and complete in all respects.

##  

## 2.             **Term**.  Section 10.4 is deleted in its entirety andreplaced with the following:

##  

“10.4  **Term**.  Terminating on July 31, 2004.”

 

----

 

## 3.             **Additional FinancialInformation**.  In additionto any other financial information required to be delivered pursuant to theterms of the Loan Agreement Borrowers shall submit to Lender on or before June30, 2004 a revised budget for the fiscal year ending July 31, 2005 which budgetshall be in form and content satisfactory to Lender and shall include monthlyincome statements and balance sheets together with weekly cash flow andborrowing availability projections from the date of the budget through andincluding July 31, 2005.

##  

## 4.             **Outside Accounts**.

##  

### (a)           Borrowers and Guarantor represent and warrant to Lenderthat attached hereto as **Schedule 1**is a complete listing of all accounts of Borrowers and Guarantor maintainedwith any bank or other financial institution other than Lender (collectively,the **“Outside Accounts”**).

###  

### (b)           On or before July 19, 2004, Borrowers and Guarantorshall cause to be delivered to Lender control agreements with respect toLender’s security interest in each of the Outside Accounts, which controlagreements must be in form and content satisfactory to Lender.

###  

## 5.             **Further Agreementsand 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 fullforce and effect;

###  

### (b)           covenant and agree to perform all of such Borrower’s andGuarantor’s obligations under the Loan Agreement and the other Loan Documents,as amended;

###  

### (c)           acknowledge and agree that as of the date hereof, neitherany Borrower nor Guarantor has any defense, set-off, counterclaim or challengeagainst 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 otherLoan Documents, as amended;

###  

### (d)           acknowledge and agree that except as heretofore disclosedto Lender by Borrowers in writing, all representations and warranties ofBorrowers and Guarantor contained in the Loan Agreement and/or the other LoanDocuments, as amended, are true, accurate and correct on and as of the datehereof as if made on and as of the date hereof;

###  

### (e)           represent and warrant that, except for the ExistingDefaults, 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 willexist; and

###  

### (f)            covenant and agree that Borrowers’ or Guarantor’s failureto comply with the terms of this Amendment or any of the other Loan Documentsshall constitute an Event of Default under the Loan Agreement.

###  

## 6.             **GeneralAcknowledgments**.

##  

### (a)           Borrowers and Guarantor fully andfinally waive any notice or demand from Lender to Borrowers or Guarantor inconnection with the Existing Defaults.

 

2

----

 

### (b)           By reason of the Existing DefaultsLender has the right to, at its option, declare all Obligations immediately dueand payable.

###  

### (c)           As a result of the Existing Defaults,Lender has no further obligation to make any further advances or extensions ofcredit to any Borrower.

###  

### (d)           Neither this Agreement nor any otheragreement executed in connection herewith or pursuant to the terms hereof, norany actions taken pursuant to this Agreement or such other agreement shall bedeemed to cure the Existing Defaults or any other Events of Default which mayexist under the Loan Agreement or the other Loan Documents or to be a waiver byLender of the Existing Defaults or any other defaults or Events of Default underthe Loan Agreement or the other Loan Documents, or of any rights or remedies inconnection therewith or with respect thereto, it being the intention of theparties hereto that the obligations of Borrowers and Guarantor with respect tothe Loan Agreement and the other Loan Documents are and shall remain in fullforce and effect

###  

## 7.             **AdditionalDocuments; Further Assurances.** Borrowers and Guarantor covenant and agrees to execute and deliver toLender, or to cause to be executed and delivered to Lender contemporaneouslyherewith, at the sole cost and expense of Borrowers, all documents, agreements,statements, resolutions, certificates, consents and information as Lender mayrequire in connection with the matters or actions described herein.  Borrowers and Guarantor further covenant andagree to execute and deliver to Lender or to cause to be executed and deliveredat the sole cost and expense of Borrowers, from time to time, any and all otherdocuments, agreements, statements, certificates and information as Lender shallreasonably 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 protectLender’s interest in the Collateral.  Allsuch documents, agreements, statements, etc., shall be in form and contentacceptable to Lender in its reasonable sole discretion.

##  

## 8.             **Release.**  Borrowers and Guarantor acknowledge and agreethat they have no claims, suits or causes of action against Lender and herebyremise, release and forever discharge Lender and its officers, directors,shareholders, employees, agents, successors and assigns from any claims, suitsor causes of action whatsoever, in law or equity, which any Borrower orGuarantor has or may have arising from any act, omission or otherwise, at anytime up to and including the date of this Amendment.

##  

## 9.             **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 Loan Documents.

##  

## 10.           **No Further Amendment;No Course of Dealing**. Nothing contained herein constitutes an agreement or obligation byLender to grant any further amendments with respect to any of the LoanDocuments.  Any waiver or implied waiverby Lender of any obligations or covenants of Borrowers, Guarantor or any ofthem, under the Loan Documents is expressly

 

3

----

 

## terminated and rescinded and Borrowers shall strictly perform andcomply with all obligations and covenants under the Loan Documents.

##  

## 11.           **Inconsistencies.**To the extent of any inconsistencies between the terms and conditions of thisAmendment and the terms and conditions of the Loan Agreement, the terms andconditions of this Amendment shall prevail. All terms and conditions of theLoan Agreement not inconsistent herewith shall remain in full force and effectand are hereby ratified and confirmed by Borrowers.

##  

## 12.           **Construction.**  Any capitalized terms used in this Amendmentnot otherwise defined shall have the meaning as set forth in the Loan Agreement.

##  

## 13.           **Binding Effect.**  This Amendment, upon due execution hereof,shall be binding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns.

##  

## 14.           **Governing Law.**  This Amendment shall be governed andconstrued in accordance with the laws of the Commonwealth of Pennsylvania.

##  

## 15.           **Severability**.  The provisions of this Amendment and allother Loan Documents are deemed to be severable, and the invalidity orunenforceability of any provision shall not affect or impair the remainingprovisions which shall continue in full force and effect.

##  

## 16.           **No Third PartyBeneficiaries**.  The rightsand benefits of this Amendment and the Loan Documents shall not inure to thebenefit of any third party.

##  

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

##  

## 18.           **Counterparts**.  This Amendment may be executed in any numberof counterparts, all of which taken together shall constitute one and the sameinstrument, and any of the parties hereto may execute this Amendment by signingany such counterpart.

##  

##  

**(SIGNATURES ON FOLLOWING PAGE)**

 

4

----

 

**IN WITNESSWHEREOF**, the partieshereto, intending to be legally bound hereby, have caused this Amendment to beexecuted 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 |
|                                           |                                   |                                        |  |  |  |  |  |  |  |  |  |

 

**(SIGNATURES CONTINUED ON FOLLOWING PAGE)**

 

5

----

 

**(SIGNATURES CONTINUED FROM PREVIOUS PAGE)**

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

 

6

----

 

**SCHEDULE 1**

 

**OUTSIDE ACCOUNTS**

 

 

Bankof America - Account Number 0000 0070 6660 maintained by Sherwood Brands, Inc.

 

----