Document:

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                                                                   Exhibit 10.21

                       FIRST AMENDMENT AND MODIFICATION TO
                           LOAN AND SECURITY AGREEMENT

     THIS FIRST AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is made this 30 day of April, 2002, by and among SHERWOOD BRANDS OF
VIRGINIA, LLC ("VA"), SHERWOOD BRANDS, LLC ("MD"), SHERWOOD BRANDS OF RI, INC.
("RI"), 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.   VA, MD, RI (the "Existing Borrowers") and Lender entered into that
certain Loan and Security Agreement dated June 12, 2001 (as the same may be
amended from time to time, the "Loan Agreement") pursuant to which Lender agreed
to make available to Existing Borrowers a revolving line of credit in the
maximum principal amount of up to Twenty Million Dollars ($20,000,000.00) (the
"Revolving Loans").

     B.   Lender has also issued for the account of Existing Borrowers (i)
letter of credit no. 874-096052 for the benefit of Suntrust Bank in the face
amount of Five Hundred Eighty-Nine Thousand Eight Hundred Fifty-Three Dollars
($589,853.00) and (ii) letter of credit no. 874-096042 for the benefit of
Suntrust Bank in the face amount of Nine Hundred Fifty Thousand Eight Hundred
Eighty-Three ($950,883.00) (collectively, the "Existing Letters of Credit").

     C.   Guarantor, Sherwood Acquisition Corp. ("Sherwood Acquisition"), a
wholly-owned subsidiary of Guarantor, Asher and the shareholders of Asher have
entered into that certain Agreement and Plan of Merger dated April 25, 2002 (the
"Plan of Merger"), pursuant to which, inter alia, (i) Sherwood Acquisition
merged into Asher, with Asher being the surviving entity, and (ii) Asher became
a wholly owned subsidiary of Guarantor (such transaction being referred to
herein as the "Merger").

     D.   The Existing Borrowers, Asher and Lender desire to amend the Loan
Agreement to provide, inter alia, for (i) an increase in the maximum principal
amount available under the Revolving Loans to Twenty-Five Million Dollars
($25,000,000.00); (ii) the extension of an additional term loan in the original
principal amount of Six Hundred Fifty Thousand Dollars ($650,000.00); (iii) the
extension of a second additional term loan in the original principal amount of
Six Hundred Fifty Thousand Dollars ($650,000.00); and (iv) the addition of Asher
as a joint and several Borrower; all of which the Lender is willing to do
subject to the terms and conditions described herein.

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

     1.   Addition of Asher as a Borrower. The parties hereto acknowledge and
agree that Asher is hereby added as a joint and several Borrower under the Loan
Agreement. By

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execution of this Amendment, Asher becomes a party to and agrees to be bound by
the terms of the Loan Agreement to the same extent as Existing Borrowers. The
parties hereto agree that each reference to "Borrower" or "Obligor" in the Loan
Agreement shall be deemed to include Asher, mutatis mutandis; except that all
references to "Borrower" in the definition of "Eligible Inventory" contained in
Section 2.1(d) of the Loan Agreement shall not include Asher but shall mean
Existing Borrowers only. Asher joins in all of the representations, warranties
and waivers of Existing Borrowers under the Loan Agreement and agrees to be
bound by the covenants and other provisions thereof, in each case as if Asher
was an original signatory thereto.

     2.   Existing Letters of Credit. Asher hereby agrees to be bound by and
obligated under the Existing Letters of Credit and all documents executed in
connection therewith (collectively, the "Letter of Credit Documents") as if such
Existing Letters of Credit were issued for the account of Asher. Asher shall be
jointly and severally liable with the Existing Borrowers for all payment and
performance obligations under the Existing Letters of Credit and the Letter of
Credit Documents.

     3.   Security Interest.

          (a)  Grant of Security Interest. To secure the payment and performance
in full of all Obligations, Asher hereby grants to Lender a continuing security
interest in and lien upon and a right of setoff against, and Asher hereby
assigns and pledges to Lender all of the Asher Collateral, including any Asher
Collateral not deemed eligible for lending purposes.

          (b)  Asher Collateral. "Asher Collateral" shall mean all now owned or
hereafter acquired personal property of Asher, including without limitation, the
following and any other property hereafter pledged as security for any of the
Obligations:

               (i)   All now owned and hereafter acquired right, title and
interest of Asher in, to and in respect of all: accounts (including health care
insurance receivables), interest in goods represented by accounts, returned,
reclaimed or repossessed goods with respect thereto and rights as an unpaid
vendor; contract rights; chattel paper; investment property; general intangibles
(including, but not limited to payment intangibles, tax and duty refunds,
registered and unregistered patents, trademarks, service marks, copyrights,
trade names, applications for the foregoing, trade secrets, goodwill, processes,
drawings, blueprints, customer lists, licenses, whether as licensor or licensee,
choses in action and other claims, existing and future leasehold interests in
equipment and fixtures, goodwill and software); stock and other ownership
interests in subsidiaries and other entities; documents (including bills of
lading, warehouse receipts and other documents of title); instruments; including
promissory notes, investment property and financial assets of every kind;
insurance policies (including, without limitation, the cash surrender value of
all life insurance policies); letters of credit, bankers' acceptances,
guaranties and letter of credit rights; and all supporting obligations and
rights to receive payment thereunder; cash monies, deposits, securities, bank
accounts, deposit accounts, reserves and credits; all property now or hereafter
held in any capacity by Lender, its affiliates or any entity which, at any time,
participates in Lender's financing of Asher at any other depository or other
institution; agreements or property securing or relating to any of the items
referred to above; all commercial tort claims of Asher based on or arising in
connection with any of the matters

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described on Exhibit 3(b) hereto, and all judgments, orders and awards issued in
connection therewith;

               (ii)  All now owned and hereafter acquired right, title and
interest of Asher in, to and in respect of goods, including, but not limited to:

                     1.  All inventory, wherever located, whether now owned or
hereafter acquired, of whatever kind, nature or description, including all raw
materials, work-in-process, finished goods, and materials to be used or consumed
in Asher's business; all returned or repossessed goods and all names or marks
affixed to or to be affixed thereto for purposes of selling same by the seller,
manufacturer, lessor or licensor thereof; and

                     2.  All equipment and fixtures, wherever located whether
now owned or hereafter acquired, including, without limitation, all machinery,
equipment, motor vehicles, furniture and fixtures, and any and all additions,
substitutions, replacements (including spare parts), and accessions thereof and
thereto.

               (iii) All now owned and hereafter acquired right, title and
interests of Asher in, to and in respect of any personal property in or upon
which Lender has or may hereafter have a security interest, lien or right of
setoff;

               (iv)  All present and future books and records relating to any of
the above including, without limitation, all computer programs, printed output
and computer readable data in the possession or control of Asher, any computer
service bureau or other third party; and

               (v)   All accessories, commingled goods, products and proceeds of
the foregoing in whatever form and wherever located, including, without
limitation, all insurance proceeds and all claims against third parties for loss
or destruction of or damage to any of the foregoing.

     4.   Authorization to File. Asher hereby authorizes Lender to file in the
appropriate jurisdictions UCC-1 financing statements against Asher identifying
"all assets" of Asher as the collateral covered thereby.

     5.   Borrowing Base. Section 2.1(b) of the Loan Agreement is hereby deleted
in its entirety and replaced with the following:

          "(b) The "Borrowing Base" shall be calculated at any time as the sum
          of (i) the product obtained by multiplying the outstanding amount of
          Eligible Accounts, net of all sales taxes, discounts, allowances and
          credits given, by the Eligible Accounts Percentage set forth in
          Section 10.1(b), plus (ii) the product(s) obtained by multiplying the
          applicable Eligible Inventory Percentage set forth in Section 10.1(b),
          by the value (as determined by Lender in its reasonable discretion
          based on the lower of cost (on a FIFO basis) or market) of Eligible
          Inventory, plus (iii) for the period commencing on April 30, 2002 and
          continuing until the Audit

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          Completion Date, the product(s) obtained by multiplying the applicable
          Eligible Inventory Percentage set forth in Section 10.1(b) by an
          amount equal to 75% of the book value (as determined by Lender based
          on financial reporting of Asher) of Asher Eligible Inventory, plus
          (iv) at all times subsequent to the Audit Completion Date, the
          product(s) obtained by multiplying the applicable Eligible Inventory
          Percentage set forth in Section 10.1(b) by the value (as determined by
          Lender in its reasonable discretion based on the lower of cost (on a
          FIFO bases) or market) of Asher Eligible Inventory. Aggregate advances
          against Eligible Inventory and Asher Eligible Inventory shall not
          exceed the sublimits applicable thereto set forth in Section 10.1(c).
          In addition, aggregate advances against that portion of Asher Eligible
          Inventory consisting of raw materials shall not exceed Three Hundred
          Thousand Dollars ($300,000.00). As used herein "Audit Completion Date"
          means the date on which Lender has completed a satisfactory audit of
          Asher's inventory and notified Borrowers of the same. Borrowers shall
          fully cooperate with Lender in connection with such audit so that the
          foregoing audit shall be completed no later than May 30, 2002."

     6.   Asher Eligible Inventory. The following definition is hereby added as
a new paragraph to the end of Section 2.1(d) of the Loan Agreement:

          "(b) "Asher Eligible Inventory" is inventory owned by Asher which is
          and remains acceptable to Lender, in its reasonable discretion, for
          lending purposes, and is located at one of the addresses set forth in
          Section 10.3(c). General criteria for Asher Eligible Inventory are set
          forth below but may be revised from time to time by Lender, in its
          sole reasonable judgment. Lender shall, in general, determine Asher
          Eligible Inventory as follows: (1) the aggregate gross amount of each
          item of Asher's inventory, valued at 75% of book value prior to the
          Audit Completion Date and at the lower of cost (on a FIFO basis) or
          market after the Audit Completion Date, which (A) is owned solely by
          Asher and with respect to which Asher has good, valid and marketable
          title, (B) is stored on property that is either (i) owned or leased by
          Asher or another Borrower or (ii) owned or leased by a warehouseman
          that has contracted with Asher or another Borrower to store inventory
          on such warehouseman's property or by a filler, processor or packer of
          Asher or another Borrower (provided, that, with respect to inventory
          stored on property leased by Asher or another Borrower or property
          owned or leased by a warehouseman, filler, processor or packer, Asher
          or such other Borrower shall have delivered in favor of Lender a lien
          waiver in form and substance satisfactory to Lender (a "Landlord
          Waiver") from such landlord, warehouseman, filler, processor or
          packer, as applicable, in respect thereof); (C) is subject to a valid,
          enforceable and first priority lien in favor of Lender (except, with
          respect to Asher Eligible Inventory stored at sites described in
          clause (B)(ii) above for normal and customary warehouseman, filler,
          packer and processor charges); (D) is

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          located in the United States; and (E) is not obsolete or slow moving
          and for which a markdown reserve has not been made, and which
          otherwise conforms to the warranties contained herein and which at all
          times continues to be acceptable to Lender in its sole reasonable
          discretion, (2) less inventory consisting of work-in-process,
          packaging or manufacturing supplies (other than raw materials), (3)
          less markdown reserves, (4) less any goods returned or rejected by
          Asher's customers for which a credit has not yet been issued and goods
          in transit to third parties (other than to Asher's or another
          Borrower's agents, warehouses, fillers, processors or packers that
          comply with clause (1)(B)(ii) above), (5) less any inventory that is
          slow-moving, obsolete or which Lender determines in its commercially
          reasonable judgment to be a no charge or sample item; (6) less a
          reserve equal to the amount of all accounts payable of Asher or
          another Borrower (as applicable) owed or owing to any warehouseman,
          filler, packer or processor; (7) less any reserves required by Lender
          in its sole reasonable discretion for special order goods and market
          value declines; (8) less any inventory which is held by Asher pursuant
          to consignment, sale or return, sale on approval or similar
          arrangement; and (9) less any increase in inventory value representing
          production variances. Inventory of Asher which satisfies all of the
          foregoing criteria except that it is in transit to a site described in
          clause (B)(i) or (ii), may be deemed Asher Eligible Inventory if such
          inventory consists of finished goods, is fully insured, Lender is
          named on such insurance as loss payee under a lender's loss payable
          clause acceptable to Lender, except for the purpose of transporting
          such inventory or clearing customs, Asher has not delivered or
          consigned to any Person any documents, instruments, warehouse
          receipts, bills of lading or other instruments evidencing such
          inventory or the right to receive such inventory (collectively the
          "Title Items") and all negotiable Title Items bear a legend evidencing
          Lender's security interest therein and in the inventory covered
          thereby; and Asher satisfies all other conditions established by
          Lender from time to time.

     7.   References to Eligible Inventory. All references to "Eligible
Inventory" in the Loan Agreement (other than references contained in the
definition of "Borrowing Base" and in the definition of "Eligible Inventory",
both of which are contained in Section 2.1(b) of the Loan Agreement) shall be
deemed to be references to both Eligible Inventory and Asher Eligible Inventory.
The reference to "Section 10.4(d)" in the definition of "Eligible Inventory"
contained in Section 2.1(d) of the Loan Agreement is hereby deleted and replaced
with "Section 10.3(c)".

     8.   Reserves. The last sentence of Section 2.1(e) of the Loan Agreement is
hereby deleted in its entirety and replaced with the following:

     "Without limiting the foregoing, Lender may establish Reserves against
     dilution of Eligible Accounts and Eligible Inventory or for credit exposure
     under swap

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     agreements (as defined in 11 U.S.C.(S) 101) issued by Lender or an
     affiliate of Lender, and Lender will establish Letter of Credit Reserves."

     9.   Term Loan A.

          (a)  Extension of Term Loan A; Purpose. Lender will lend to Borrowers
and Borrowers will borrow from Lender a term loan in the original principal
amount of Six Hundred Fifty Thousand Dollars ($650,000.00) ("Term Loan A").
Borrowers shall use the proceeds of Term Loan A to finance costs incurred in
connection with the Merger and for other working capital purposes.

          (b)  Interest on Term Loan A. Interest on the unpaid principal balance
of Term Loan A shall accrue from the date of advance until final payment thereof
at a per annum rate of interest equal to 275 basis points in excess of the Term
Loan LIBOR Market Rate. As used herein, "Term Loan LIBOR Market Rate" means the
rate for one month U.S. dollar deposits as reported on Telerate Page 3750 (or
any successor page) as of 11:00 a.m. London Time, on such day, or if such day is
not a London business day, then the immediately preceding London business day
(or if not so reported, then as determined by Lender from another recognized
source or interbank quotation).

          (c)  Payments on Term Loan A. Borrowers will pay the principal of Term
Loan A in (i) thirty-three (33) equal and consecutive monthly principal
installments of Nineteen Thousand Dollars ($19,000.00), plus all accrued and
unpaid interest thereon, on the first day of each calendar month, commencing May
1, 2002 and (ii) one final payment of the remaining principal balance of Term
Loan A, plus all accrued and unpaid interest thereon and all fees, costs and
expenses due in connection therewith, on February 1, 2005. Lender shall apply
all proceeds of accounts or other Collateral received by Lender and all other
payments in respect of Term Loan A in whatever order or manner Lender shall
determine.

          (d)  Term Loan A Note. Borrowers' obligation to repay Term Loan A
shall be evidenced by Borrowers' joint and several promissory note ("Term Note
A") in the face amount of Six Hundred Fifty Thousand Dollars ($650,000.00),
which shall be in the form attached hereto as Exhibit 9(d), with the blanks
appropriately filled in.

     10.  Term Loan B.

          (a)  Extension of Term Loan B; Purpose. Lender will lend to Borrowers
and Borrowers will borrow from Lender a term loan in the original principal
amount of Six Hundred Fifty Thousand Dollars ($650,000.00) ("Term Loan B").
Borrowers shall use the proceeds of Term Loan B to finance costs incurred in
connection with the Merger and for other working capital purposes.

          (b)  Interest on Term Loan B. Interest on the unpaid principal balance
of Term Loan B shall accrue from the date of advance until final payment thereof
at a per annum rate of interest equal to 275 basis points in excess of the Term
Loan LIBOR Market Rate.

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          (c)  Payments on Term Loan B. Borrowers shall pay all accrued and
unpaid interest on Term Loan B on the first day of each calendar month
commencing May 1, 2002. In the event the outstanding principal balance under
Term Loan B, all accrued and unpaid interest thereon and all other sums due in
connection therewith are not paid in full on or before December 31, 2002,
Borrower shall pay the principal of Term Loan B in (i) thirty-six (36) equal and
consecutive principal payments of Eighteen Thousand Fifty-Five and 56/100
Dollars ($18,055.56) each, plus all accrued and unpaid interest thereon, on the
first day of each calendar month commencing on January 1, 2003, and (ii) one
final payment of the remaining principal balance of Term Loan B, plus all
accrued and unpaid interest thereon, and all fees, costs and expenses in
connection therewith on December 1, 2006.

     Lender shall apply all proceeds of accounts or other Collateral received by
Lender and all other payments in respect of Term Loan B in whatever order or
manner Lender shall determine.

               (i)   Refinance of Term Loan B. Any refinance of Term Loan B by
any entity or person other than Lender shall be subject to the terms, conditions
and requirements of Section 6.14(c) of the Loan Agreement.

               (ii)  Term Loan B Reserve. If by June 30, 2002, Lender has not
received, reviewed and approved an appraisal in form and content satisfactory to
Lender performed by an appraiser satisfactory to Lender showing a forced
liquidation value of all equipment of Existing Borrowers of at least
$765,000.00, Lender shall create a cumulative reserve (the "Term Loan B
Reserve") against sums otherwise available in respect of Revolving Loans in an
amount equal to $100,000 per month. Such reserve shall be implemented on the
last day of each month commencing June 30, 2002 and shall continue until the
entire outstanding principal amount of Term Loan B is reserved against Revolving
Loans. The Term Loan B Reserve shall be reduced on a dollar for dollar basis
upon receipt by Lender of principal payments on Term Loan B as required
hereunder. The Term Loan B Reserve, if implemented, shall be in addition to all
other reserves established by Lender under the Loan Agreement. All reserves
established under this subsection shall be included within the definition of
"Reserves" contained in Section 2.1(e) of the Loan Agreement.

          (d)  Term Loan B Note. Borrowers' obligation to repay Term loan B
shall be evidenced by Borrowers' joint and several promissory note ("Term Note
B") in the face amount of Six Hundred Fifty Thousand Dollars ($650,000.00),
which shall be in the form attached hereto as Exhibit 10(d), with the blanks
appropriately filled in.

     11.  Loans Co-Terminus. In the event the Revolving Loans are terminated as
a result of an Event of Default, expiration of the Term, or otherwise, the
outstanding balance of Term Loan A and Term Loan B, together with any accrued
and unpaid interest thereon and any of the sums due pursuant to the terms
hereof, and all other Obligations shall be immediately due and payable in full.

     12.  Financial Covenants. Subsection (a) - (c) of Section 6.19 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:

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     "(a)  Borrowers shall maintain Tangible Net Worth of not less than (i)
$10,500,000.00 as of the date hereof and at all times hereafter through October
30, 2001; (ii) $11,500,000.00 as of October 31, 2001 and at all times thereafter
through January 30, 2002; (iii) $12,500,000.00 as of January 31, 2002 and at all
times thereafter through October 30, 2002; (iv) $14,000,000.00 as of October 31,
2002; and (v) $16,000,0000 as of January 31, 2003 and at all times thereafter.

     (b)   Borrowers shall maintain a Fixed Charge Coverage Ratio, determined as
of the end of each fiscal quarter of Borrowers for the 12-month period then
ended, of not less than: (i) 1.75 to 1.0 as of July 31, 2001 and as of the end
of each fiscal quarter thereafter through October 31, 2002; and (ii) 3.0 to 1.0
as of January 31, 2003 and as of the end of each fiscal quarter thereafter.

     (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") an aggregate amount in excess
of: (i) $1,000,000.00 in the fiscal year ending July 31, 2001; (ii)
$2,000,000.00 in the fiscal year ending July 31, 2002; and (iii) $1,200,000.00
in the fiscal year ending July 31, 2003 and in any fiscal year thereafter."

     13.   Term. The reference to "Section 10.5" in Section 9.1 of the Loan
Agreement is hereby deleted and replaced with "Section 10.4".

     14.   Maximum Revolving Credit. The reference to "$20,000,000.00" as the
Maximum Revolving Credit contained in Section 10.1(a) of the Loan Agreement is
hereby deleted and replaced with $25,000,000.00.

     15.   Interest/Fees. Section 10.5(a) of the Loan Agreement is hereby
deleted and replaced with the following:

     "10.5 Interest/Fees:

           (a)  The Applicable Percentage for purposes of calculating the
applicable interest rate for any day for any Loan shall be determined in
accordance with the following chart and based on EBITDA (as defined in Section
6.19 and determined as of the end of the most recently ended fiscal quarter for
the 12 month period then ended) on the date the Applicable Percentage is to be
determined:

                                                                   LIBOR Market
         EBITDA                 Base Rate Loan   Eurodollar Loan    Rate Loan
                                --------------   ---------------   ------------

         *** $4,850,000.00      .25%             2.35%             2.35%
         **  $4,850,000.00 and  .25%             2.15%             2.15%
         *** $7,350,000.00
         **  $7,350,000.00      .25%             1.85%             1.85%

Until Lender's receipt of Borrowers' Quarterly Statements for the quarter ending
April 30, 2001, each Applicable Percentage shall be determined assuming that
EBITDA is * $4,500,000.00."

*** means less than or equal to
** means greater than

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     16.  Borrowing Base Certificate. The following sentences are hereby added
to the end of Section 6.10(d) of the Loan Agreement:

          "If Borrowers' Net Excess Availability (as shown on the weekly
          borrowing base certificates delivered by Borrowers to Lender) is less
          than Five Hundred Thousand Dollars ($500,000.00) for two (2)
          consecutive weeks, the borrowing base certificates and sales and cash
          receipts reports required by the preceding sentence shall be delivered
          on a daily basis by Borrowers until such time as Borrowers' Net Excess
          Availability (as shown on the daily borrowing base certificates
          delivered by Borrowers to Lender) is more than Five Hundred Thousand
          Dollars ($500,000.00) for two (2) consecutive weeks. As used herein,
          "Net Excess Availability" means undrawn availability under the
          Revolving Loans after deducting all sums due and owing to Borrowers'
          trade creditors which are outstanding beyond normal trade terms (as
          determined by Lender), less all Reserves established by Lender."

     17.  Put Option Reserve.

          (a)  If Guarantor has not filed with the Securities and Exchange
Commission (the "SEC") the registration rights agreement contemplated by Section
4.2 of the Plan of Merger (the "Reg Rights Agreement") by July 31, 2002, Lender
shall create a cumulative reserve against sums otherwise available in respect of
Revolving Loans in an amount equal to Two Hundred One Thousand Nine Hundred
Twenty-Four Dollars ($201,924.00) per month commencing August 1, 2002 and
continuing on the first day of each month through October 1, 2002. If at any
time prior to October 1, 2002, Borrowers present satisfactory evidence to
Lender's counsel that such Reg Rights Agreement has been filed with the SEC,
such reserve shall be released.

          (b)  Commencing November 1, 2002 (provided that such a reserve has not
been fully established and maintained pursuant to the foregoing subsection (a)),
Lender shall create a cumulative reserve against sums otherwise available in
respect of Revolving Loans in a monthly amount determined by Lender to be the
amount necessary to fully reserve by April 1, 2003 the amount payable by
Guarantor under Section 4.3 of the Plan of Merger if the put option contained in
such Section 4.3 is exercised. Such reserve shall be implemented on the first
day of each month commencing November 1, 2002 and continuing through April 1,
2003. Upon expiration of the time provided for exercise of the put option in
Section 4.3 of the Plan of Merger, upon request by Borrowers, such reserve shall
be released. Upon delivery of evidence satisfactory to Lender that all or a
portion of the Holdback Shares may be permanently retained by Guarantor pursuant
to the terms of the Escrow Agreement (collectively, the "Retained Shares"),
Lender agrees to adjust the reserve established pursuant to this subsection (b)
for the value of such Retained Shares (with an assumed value of $4.50 per
share). As used herein, "Holdback Shares" and "Escrow Agreement" shall have the
meanings given such terms in the Plan of Merger.

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          (c)  All reserves established under this Section 17 shall be included
within the definition of "Reserves" contained in Section 2.1(e) of the Loan
Agreement.

          (d)  Borrowers shall provide Lender with prompt written notice of the
exercise of the put option in Section 4.3 of the Plan of Merger.

     18.  Fees. In consideration for the Lender's execution of this Amendment
and the extension to Borrowers of Term Loan A and Term Loan B, Borrowers hereby
shall pay to Lender a fee in the amount of $25,000, $15,000 of which is due and
payable on the date hereof and $10,000 of which is due and payable on the
earlier of (i) January 1, 2003 or (ii) Lender's demand for payment in full of
the Obligations in accordance with the Loan Agreement.

     19.  Conditions. This Amendment is conditioned upon Borrowers' satisfaction
of the following conditions:

          (a)  Borrowers shall execute and deliver to Lender, in the form
attached hereto as Exhibit 19(a), an Amended and Restated Revolving Note with
the blanks appropriately filled in (the "A&R Revolving Note").

          (b)  Borrowers shall cause Guarantor to execute and deliver to Lender
an Amendment, Ratification and Confirmation of Surety Agreement (the "Surety
Ratification") in form and content acceptable to Lender pursuant to which, inter
alia, Guarantor shall agree to continue to guaranty and act as surety for all
present and future Obligations of Borrowers to Lender, including, without
limitation, all Obligations of Asher to Lender.

          (c)  Borrowers shall cause Guarantor to execute and deliver to Lender
a securities pledge agreement in form and content acceptable to Lender pursuant
to which Guarantor shall pledge to Lender all stock of Asher.

          (d)  Lender shall have received, reviewed and approved audited
financial statements of Asher for the fiscal years 1997 through 2001.

          (e)  Lender shall have received an opening combined balance sheet of
Borrowers in form and content satisfactory to Lender.

          (f)  Lender shall have received a copy of the final Plan of Merger and
all documents executed in connection therewith which shall be in the form
attached hereto as Exhibit 19(f).

          (g)  Lender shall have received search reports against Asher showing
no judgments, liens, encumbrances or restrictions of any nature with respect to
the assets of Asher except for those liens in favor of Wells Fargo Business
Credit ("Wells"), which Wells shall agree to promptly terminate pursuant to a
payoff letter from Wells in form and content satisfactory to Lender.

          (h)  Lender shall have received authorizing resolutions for each
Borrower and Guarantor with respect to the transactions contemplated hereunder.
Lender shall have received

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<PAGE>

current good standing certificates for each Borrower and Guarantor; certificates
of no change regarding the articles of incorporation and by-laws for the
Existing Borrowers and Guarantor; copies of articles of incorporation and
by-laws of Asher; an officer's certificate of Asher; a copy of the filed
Certificate of Merger in respect of the Merger; and such other documents and
information as Lender may require, all of which shall be in form and content
satisfactory to Lender.

          (i)  Lender shall have received an opinion of Borrowers' and
Guarantor's counsel in form and content satisfactory to Lender regarding the
Merger and the transactions contemplated by this Amendment.

          (j)  Lender shall have received policies of insurance (or evidence
thereof on Acord 27 form) with respect to the assets of Asher in amounts
satisfactory to Lender, pursuant to which Lender shall be named as lender loss
payee and additional insured pursuant to such endorsements as shall be
satisfactory to Lender.

          (k)  Borrowers shall execute and deliver, or cause to be executed and
delivered to Lender, at Borrowers' sole cost and expense, (i) Term Note A, (ii)
Term Note B and (iii) and any and all other documents, agreements, certificates
and opinions as Lenders shall request in connection with the execution and
delivery of this Amendment or any documents in connection herewith, or to
further evidence, effect, enforce or protect any of the terms hereof or the
rights or remedies granted or intended to be granted to Lender herein or
therein, each of which shall be in form and content applicable to Lender.

          (l)  Lender shall have received landlord waiver agreements,
warehouseman waiver agreements and mortgagee waiver agreements, as applicable,
for all locations of Asher.

     20.  Interrelatedness Of Borrowers. The business operations of each
Borrower are interrelated and complement one another, and such entities have a
common business purpose. To permit their uninterrupted and continuous
operations, such entities now require and will from time to time hereafter
require funds and credit accommodations for general business purposes. The
proceeds under the credit facilities extended under the Loan Documents will
directly or indirectly benefit each Borrower, severally and jointly, regardless
of which Borrower requests or receives part or all of the proceeds of such
advances.

     21.  Confirmation Of Collateral. Borrowers and Guarantor hereby confirm,
acknowledge and agree that none of the collateral securing any obligations of
Borrowers or Guarantor to Lender shall be impaired by anything contained in this
Amendment, and such collateral shall continue to secure all of the Obligations.

     22.  Schedules to Loan Agreement. All existing Schedules to the Loan
Agreement are hereby removed and replaced with the schedules bearing the same
schedule names and numbers attached hereto.

     23.  Definitions/References.

                                       11

<PAGE>

          (a)  Asher. The following definition is hereby added to the Loan
Agreement: "Asher" means Asher Candy Acquisition Corporation.

          (b)  Loan Documents. The definition of "Loan Documents" contained in
Section 10.6 of the Loan Agreement is hereby amended to expressly include,
without limitation, Term Note A and Term Note B.

          (c)  Loans. Unless the context thereof clearly indicates otherwise,
all references in the Loan Agreement to the "Loans" shall be deemed to be
references to the Revolving Loans, Term Loan A and Term Loan B, collectively.

          (d)  Obligations. The definition of "Obligations" contained in Section
4.2 of the Loan Agreement is hereby amended to expressly include, without
limitation, Term Loan A and Term Loan B.

          (e)  Promissory Note. Unless the context thereof clearly indicates
otherwise, all references in the Loan Agreement to the "Promissory Note" shall
be deemed to be references to the Revolving Note, as amended and restated by the
foregoing A&R Revolving Note, Term Note A and Term Note B, collectively.

          (f)  Revolving Note. All references in the Loan Agreement to the
"Revolving Note" shall mean the Revolving Note, as amended and restated by the
foregoing A&R Revolving Note.

          (g)  Surety. All references in the Loan Agreement to the "Surety
Agreement" shall mean the Surety Agreement, as amended by the Surety
Ratification.

     24.  Further Agreements and Representations. Each Borrower 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;

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

          (c)  acknowledge and agree that as of the date hereof, such Borrower
has no 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
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, upon execution by Lender of this
Amendment, no Event of Default or event which with the delivery of notice,
passage of time or both would

                                       12

<PAGE>

constitute an Event of Default exists or will exist, and all information
described in the foregoing Background is true and accurate;

          (f)  covenant and agree that Borrowers' failure to comply with the
terms of this Amendment or other documents executed or delivered to Lender
pursuant to the terms hereof shall constitute an Event of Default under the Loan
Agreement, subject to the notice and grace periods provided therein, if
applicable; and

     25.  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.

     26.  No Waiver. Nothing contained herein constitutes an agreement or
obligation by Lender to grant any further amendments to any of the Loan
Documents. Nothing contained herein constitutes a waiver or release by Lender of
any Event of Default or of any rights or remedies available to Lender under the
Loan Documents or at law or in equity.

     27.  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.

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

     29.  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.

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

     31.  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.

     32.  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.

     33.  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.

                                       13

<PAGE>

     34.  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.

     35.  WAIVER OF RIGHT TO TRIAL BY JURY. BORROWERS, GUARANTOR AND LENDER
WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(a) ARISING UNDER ANY OF THE LOAN DOCUMENTS OR (b) IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF BORROWERS, GUARANTOR OR LENDER WITH
RESPECT TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
BORROWERS, GUARANTOR AND LENDER AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWERS,
GUARANTOR AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. BORROWERS
AND GUARANTOR ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH
COUNSEL REGARDING THIS SECTION, THAT THEY FULLY UNDERSTAND ITS TERMS, CONTENT
AND EFFECT, AND THAT THEY VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF THIS
SECTION.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       14

<PAGE>

     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,                            SHERWOOD BRANDS OF VIRGINIA,
NATIONAL ASSOCIATION                      L.L.C.
                                          a Virginia limited liability company

                                          By:  SHERWOOD BRANDS, INC.,
By: /s/ George C. Kyvernitis                   Sole Member
   ---------------------------------
George C. Kyvernitis, Vice President
                                          By: /s/ Amir Frydman
                                             -----------------------------------
                                               Amir Frydman
                                               Executive Vice President

                                          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 ACQUISITION
                                          CORPORATION

                                          By: /s/ Amir Frydman
                                             -----------------------------------
                                               Amir Frydman
                                               Executive Vice President

                                       15

<PAGE>

                                          GUARANTOR:

                                          SHERWOOD BRANDS, INC.

                                          By:  /s/ Amir Frydman
                                             -----------------------------------
                                               Amir Frydman
                                               Executive Vice President

                                       16Exhibit

10.29

 

MONEY

ACCESS SERVICE® PROCESSING AGREEMENT

 

MONEY

ACCESS SERVICE Processing Agreement (“Agreement”) is dated

                   ,

2002 by and between MONEY ACCESS SERVICE INC. with offices located at 1100 Carr

Road, Wilmington, Delaware  19809

(“MAS”, “we” or “us”) and HERITAGE OAKS BANK with offices located at 545

TWELFTH STREET, PASO ROBLES, CALIFORNIA 

93446 (“User” or “you”).

 

Background

 

MAS provides Electronic Fund Transfer processing for automated teller

machine, point of banking and point of sale Terminals and accessed by using

certain plastic cards with magnetically encoded stripes issued by financial

institutions to their account holders allowing such account holders to perform

certain banking, financial and purchase Transactions. Additionally, MAS offers

services for the authorization of Transactions and provides Gateway services to

various EFT Networks, as well as certain other EFT services (“MAS Processing

Services”).  User desires to purchase

and use MAS Processing Services.

 

NOW, THEREFORE, in consideration of the mutual premises herein

contained, MAS and User agree to be legally bound by the terms of this

Agreement as hereinafter set forth.

 

1.             DEFINED TERMS.

 

All capitalized terms used in this Agreement and not otherwise defined

herein shall have the meanings set forth in Exhibit A attached hereto and made

a part hereof.

 

2.             MAS PROCESSING SERVICES.

 

You hereby agree to use MAS as the processor of Transactions conducted

by your Cardholders and/or at your Terminals. 

You understand and agree that MAS may provide the services hereunder

through any of its affiliates.  While

you are a User of MAS Processing Services under this Agreement, you elect to

interface with MAS in one of the following modes:

 

Full Service

Authorization Processor

Cooperative Authorization Processor

Intercept Processor

Independent Sales Organization (ISO)

 

You understand and agree that the mode you

elect now for your Interface to MAS will govern you for the duration of this

Agreement.  You may elect to use any or

all of the following MAS Processing Services set forth below; however, you

agree that during the term of this Agreement we shall be the exclusive provider

to you of any of the services described below which you elect:

 

(i)            MAS

Authorization Services.  In accordance

with your Cardholder information you will supply to us, we will authorize or

decline Transaction requests received from any Terminals at which your

Cardholders have access or any Networks in which you participate by our

comparison to your Cardholder information which can consist of any of the

following:  (a) real time account

records, (b) daily account balances or (c) parameter instructions.

 

(ii)           MAS

Terminal Driving Services.  We will

establish a direct electronic connection between the ATM and/or POB Terminals

you operate and our switch in order to operate, supervise and monitor such

Terminals for you.

 

(iii)          Gateway

Services.  We will provide Gateway

Services as agreed to in the attached

 

 

addendum,

which may be amended from time to time by the parties.

 

(iv)          Additional

Services.  We also offer an array of

additional MAS Processing Services from which you may select to complement your

Electronic Fund Transfer products. 

These Processing Services include telephone banking, bill payment, self service

banking and Cardholder service charge products.  You shall indicate your selection of additional MAS Processing

Services on the Specification Forms you complete, and execute an addendum to

this Agreement for each such service you desire.  From time to time we may introduce new Processing Services which

you may select by executing a further addendum to this Agreement.

 

3.             SUPPORT AND TERMINAL LOCATION

 

(a)           Support Equipment and

Terminals. You agree to purchase or lease and install such ATM and POB Terminals

as you desire to operate and you agree to obtain and maintain in good working

order at your expense the data processing and communications equipment which is

necessary and appropriate to facilitate the provision of MAS Processing

Services.  You shall independently

determine the locations of the Terminals you choose to operate in accordance

with the rules of the Networks you join and subject to any necessary regulatory

approvals.

 

(b)           Location of Terminals.

 

(1)  United States and its

Territories.  You agree that subject to

Section 3b. (2) of this Agreement, the MAS Processing Services to be provided

under this Agreement shall only occur at Terminals located in the United States

of America or its territories.

 

(2)  Outside of the United

States or its Territories.  If you

desire to receive MAS Processing Services at any Terminal located outside of

the United States of America, you agree to first provide MAS with a written

schedule of any country or countries in which you intend to receive MAS

Processing Services.  You may not obtain

MAS Processing Services for Terminals located outside of the United States of

America and its territories without MAS’s prior written approval.  If MAS agrees to provide such services to

you, that approval will be, subject to the following conditions and other

conditions to which the parties agree at the time:

 

(i) 

We can terminate the provision of MAS Processing Services in any country

at any time and without being deemed to be in breach of the MAS Processing

Agreement if we, in our sole discretion, determine that continued provision of

service to Terminals located in such country could adversely impact MAS.  If we terminate the provision of MAS

Processing Services in a particular country, we will provide you with sixty

(60) days’ prior notice of such termination, unless exigent circumstances

exist.

 

(ii) 

If any provision of the Agreement is declared or found to be illegal,

unenforceable or void under the laws of any country (“Voided Provision”), for

purposes of the laws of the specific country in which the provision is void,

the Agreement will be construed as if not containing the Voided Provision, and

the rest of the Agreement will remain in full force and effect, and the rights

and obligations of the parties hereto shall be construed and enforced

accordingly under the laws of that country; provided, however, that the parties

consent to the enforcement of the entire Agreement, including the Voided

Provision, under the laws of the State of Delaware.

 

(iii)  The parties hereto affirmatively

consent that interpretation, construction and performance of this Agreement,

including the provision of MAS Processing Services in any country outside of

the United States of America or its territories, shall be governed by and

construed and enforced in accordance with the laws of the State of Delaware

without regard to the principle of conflicts of laws.  The parties also consent to the jurisdiction and venue in the

Delaware courts with respect to the enforcement of any matter under this Agreement,

regardless as to the location of any Terminal receiving MAS

 

2

Processing Services.

 

(iv)  You have obtained all

necessary authorizations required under the laws, regulations and code

provisions of each country in which you seek to receive MAS Processing

Services.

 

(v)  You are not aware of any

provision of the law, regulation or code under the laws of each country in

which you seek to receive MAS Processing Services that would prevent (a) the

provision of the MAS Processing Services to you or (b) the enforcement of this

Agreement in accordance with its terms. 

During the term of this Agreement, the parties also agree to promptly

notify each other of the enactment or promulgation of any provision of the law,

regulation or code under the laws of each country in which you seek to receive

MAS Processing Services that would prevent (a) the provision of the MAS

Processing Services or (b) the enforcement of this Agreement in accordance with

its terms.

 

4.             USER SPECIFICATIONS.

 

We will perform our processing in accordance with your instructions and

information provided to us on our Specification Forms and the rules of the

Networks you join.

 

5.             FEES.

 

(a)           Schedule

of Fees.  You agree to pay our fees and

charges set forth on the Schedule of Fees attached hereto as Exhibit B and

Exhibit C for our MAS Processing Services. 

Further, you agree to pay all third party charges (including, but not

limited to, our charges related to telecommunications services and transportation

expenses) incurred in connection with our provision of MAS Processing Services,

including all fees imposed by any Network to which we provide you Gateway

Service incurred in connection with your participation in, or processing or

settlement of Transactions in such Network. 

You agree that if we add new MAS Processing Services or Transaction

types during the term of this Agreement we may amend the Schedule of Fees to

add charges for such new services or Transaction types at any time. Any service

performed by us at your request or as necessitated by your act or failure to

act which is beyond the scope of the MAS Processing Services you select on the

Specification Forms shall be billed to you at our standard rates then in effect

including charges for personnel and computer time, equipment, supplies,

out-of-pocket costs and other expenses which you agree to pay us. Commencing

upon execution of this Agreement, all applicable fees and charges shall be

payable upon invoice to you.  We will

submit monthly statements for the fees, charges, supplies and other costs

payable by you pursuant to this Agreement. 

Payment will be made in accordance with Section 6 hereof.  The Schedule of Fees may be modified by MAS

once each calendar year upon one hundred twenty (120) days prior written

notice, provided that any interchange, issuer reimbursement, pass-through or

third party fees may be modified from time to time as set forth in prior

written notice from MAS.

 

(b)           Taxes.  In addition to the applicable standard fees

and charges for MAS Processing Services and any other service we perform for

you, you agree to pay all federal, state and local taxes assessed as well as

all other expenses, fees and charges imposed by a governmental entity arising

out of or incidental to your use of MAS Processing Services other than those

taxes, expenses, fees or charges which are based on the net income or property

of MAS.

 

6.             CLEARING ACCOUNT.

 

For payment of the fees, charges, expenses

and taxes, if any, due and owing to MAS under this Agreement, you will

establish and maintain for the term of this Agreement a clearing account at a

financial institution designated or approved by us.  If you have executed a STAR Member Institution Agreement or a MAC

Network Participation Agreement and already have established a clearing account

pursuant thereto, then for purposes of this Agreement you hereby grant MAS

authorization to

 

3

 

effect credits to and debits from such

clearing account for payment of the fees, charges, expenses and taxes due and

owing to MAS under this Agreement.  You

agree to execute any documentation required by us or by the designated

settlement bank to grant authority to us to debit or credit such account.  You agree to maintain at all times in the

clearing account a balance sufficient to pay all amounts due and owing to MAS

under this Agreement.  User hereby

grants and authorizes MAS to exercise a right of set-off against funds payable

to User pursuant to this Agreement or any other agreement between MAS and User

and other funds, including any pledge accounts, that User maintains with MAS or

any Network.  MAS may apply all such

amounts as payment on User’s obligations in a priority or order of payment

determined by MAS in its sole discretion.

 

7.             CONFIDENTIALITY OF INFORMATION.

 

You acknowledge that we have, through the expenditure of a significant

amount of time, effort, costs and research, developed and/or secured the right

to use various computer programs, forms, logos, manuals, and related materials,

including our operating procedures and technical specifications, which

constitute property of great value and/or trade secrets, and that disclosure to

others of such materials may result in loss or irreparable damage to us.  Accordingly, you in your use of our MAS

Processing Services agree to hold and use any and all such property or

information in confidence, and not to disclose, reveal, copy, sell, transfer,

sub-license, assign or distribute any part or parts of it, in any form, to any

individual, firm, corporation, or other entity, or permit any of your

employees, agents or representatives to do so, except as expressly permitted in

writing by us.  You further agree that

upon termination of your use of MAS Processing Services for any reason, you

will immediately return all such property to us.

 

We acknowledge that, in your use of our MAS Processing Services, you

may disclose to us certain confidential information relating to your

Cardholders (if applicable). Accordingly, we agree to hold and use any and all

such Cardholder information in confidence, and not to disclose, reveal, copy,

sell, transfer, assign or distribute any part or parts of it, in any form, to

any person or entity, or permit any of our employees, agents, or representatives

to do so, except as expressly permitted in writing by you or as required by

applicable law.

 

8.             MALFUNCTIONS.

 

Each party shall notify the other party immediately upon discovery of

any evidence which might indicate that any of the MAS Processing Services are

not satisfactory.  Upon such

notification, both parties shall consult and test in a manner that MAS deems

appropriate to solve the problem.  If we

determine that the problem arises from hardware, software, personnel or other

items within our control, we shall correct within a reasonable time not to

exceed thirty (30) days from the date on which any such errors are brought to

our attention.  If we determine that the

problem arises from the equipment, software, personnel procedures,

communication or site facilities or other items within your control, you at

your own cost shall correct the problem within a reasonable time not to exceed

thirty (30) days from the date on which any such errors are brought to your

attention.

 

9.             FORCE MAJEURE.

 

Neither MAS nor User shall be liable for any loss resulting from a

delay or failure in its provision of MAS Processing Services or in the

operation of a Terminal due in whole or in part to any natural disaster,

epidemic, fire, act of God, strike, war, riot, civil disturbance, court order,

statute, governmental issuance, technological facility outage, shortage of or

significant fluctuation in power or any other cause beyond its reasonable

control.

 

10.           LIMITATION OF LIABILITY

 

(a)  Disclaimer of Certain

Damages.  The duties and

responsibilities of MAS under this

 

4

 

Agreement

will be limited to those expressly set forth and undertaken herein.  In no event shall MAS be liable to User for

(i) any loss of use, revenue, profit or business opportunities or indirect,

incidental, consequential, punitive, special or exemplary damages, even if MAS

is informed or is otherwise aware or should be aware, of the possibility or

likelihood of such damages and regardless of whether any limited remedy

provided hereunder is determined to fail in its essential purpose, (ii) losses

or damages attributable to or arising from overhead allocations or general and

administrative costs and expenses of User, (iii) losses or damages caused other

than by MAS’s own gross negligence or intentional misconduct, or (iv) losses or

damages arising out of the fraudulent or criminal acts of third parties.

 

(b)  Damages Cap.  Notwithstanding any provision contained in

this Agreement to the contrary, the aggregate liability of MAS during each

consecutive twelve (12) month period beginning on the Effective Date for any

and all claims, demands, costs, losses, damages or other potential or actual

expenses which are in any way related, directly or indirectly, to the

execution, performance or subject matter of this Agreement shall not exceed the

average monthly amount of fees paid by User to MAS during such period,

exclusive of interchange and pass-through fees, multiplied by three (3),

regardless of the form of action employed, whether in contract, warranty, tort

(including negligence) or otherwise.

 

(c)  Risk Allocation.  The parties agree that the limitation of

liability set forth in this Section 10 is a reasonable allocation of risk and

that such limitation shall apply to any remedy ordered by a court, regardless

of whether such court determines that any remedy provided for hereunder fails

in its essential purpose.

 

11.           NO WARRANTIES.

 

MAS HEREBY DISCLAIMS ALL WARRANTIES INCLUDING, WITHOUT LIMITATION, ANY

EXPRESS AND IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR

PURPOSE.

 

12.           INDEPENDENT ENTITY.

 

We agree to provide MAS Processing Services to you as an independent

contractor only.  None of MAS’s

officers, employees, agents or representatives will be subject to your control.

 

13.           INSURANCE.

 

You agree to obtain all insurance coverage which is required by state

and federal law and regulation and dictated by prudent business practices in

connection with your use of MAS Processing Services.

 

14.           RIGHT OF INSPECTION OF RECORDS.

 

Upon reasonable notice to us and during normal business hours your

representatives, auditors, and/or representatives of your regulatory agencies

may inspect any file which we maintain regarding the provision of MAS

Processing Services to you.

 

15.           ASSIGNMENT AND MERGER.

 

This Agreement may not be assigned by you without our prior written

consent.  If you are the subject of or a

participant in a merger or acquisition by (i) statute, (ii) purchase of assets,

(iii) sale or exchange of stock, (iv) consolidation or (v) any other means,

such merger or acquisition shall not terminate this Agreement; rather, this

Agreement shall remain in full force and effect after such merger or

acquisition as the obligation of the surviving financial institution.

 

5

 

16.           EFFECTIVE DATE AND TERM.

 

This Agreement shall be effective as of the date indicated in the

introductory paragraph hereof provided that it is fully executed by us in

original form and the payments required hereunder have been delivered to us.

The initial term of the Agreement shall be five (5) years from the date our

services commence under this Agreement and, thereafter, for successive one (1)

year renewal terms unless terminated in accordance with paragraph 17 herein.

 

17.           TERMINATION.

 

This Agreement may be terminated in its entirety by either party at the

end of the initial term or any subsequent term upon one hundred eighty (180)

days’ prior written notice to the other party. 

In the event you breach this Agreement causing an early termination or

terminate this Agreement prior to the expiration of its term, you agree to pay

an early termination fee in an amount equal to the product of your average

monthly fees times the number of months left in your current term.

 

18.           AMENDMENTS.

 

This Agreement may be amended only by a writing duly executed by both

parties.

 

19.           ENTIRE AGREEMENT.

 

This Agreement, including all schedules, addenda and exhibits hereto,

constitutes the entire understanding between the parties as to MAS Processing

Services and supersedes all previous communications, commitments and writings.

 

20.           SEVERABILITY.

 

If any provision of this Agreement is held invalid, illegal, void or

unenforceable by reason of any judicial decision, all other provisions of this

Agreement shall nevertheless remain in full force and effect.

 

21.           WAIVERS.

 

No course of dealing or failure to enforce any provision or exercise

any right under this Agreement by either party shall be construed as a waiver of

such provision or right, affect the validity of this Agreement or curtail the

ability of any party to enforce such provision or exercise such right in the

future.

 

22.           NOTICES.

 

All notices by one party to the other under this Agreement shall be in

writing and shall be considered delivered when actually received or three (3)

days after placement in the U.S. Postal Service, whichever is sooner.  Notice shall be sent to each party at the

addresses set forth in the first paragraph of this Agreement.  Either party may change the address for

notices at any time by providing written notice of such change to the other

party.

 

23.           HEADINGS.

 

The titles and headings which precede the text of this Agreement have

been inserted solely for convenience of reference and contain no substantive

meaning.

 

24.           APPLICABLE LAW.

 

This Agreement shall be governed by, and construed in accordance with,

the laws of the State of Delaware, regardless of the laws that might otherwise

govern under applicable principles of conflicts of laws thereof.

 

6

 

In Witness Whereof, the parties hereto have executed this Agreement by

their duly authorized representatives on the date first written above.

 

 

MONEY ACCESS SERVICE INC.

 

 

By:

 

 

Name and Title (Printed)

 

HERITAGE OAKS BANK

 

By:

 

 

Name and Title (Printed)

 

 

User

Identification

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00044-of-00352.parquet"}]]