Document:

Exhibit
10.26

 

REVOLVING FUND LOAN
AGREEMENT

 

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

 

WHEREAS, the Borrower desires to borrow from Lender,
funds for the purchase of new equipment for the expansion of its facility
located in Chase City, Mecklenburg County, Virginia (The “Project”), the sum of
THREE HUNDRED FIFTY THOUSAND and 00/l00 Dollars ($350,000.00) to be secured as
hereinafter provided; and

 

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

 

NOW, THEREFORE, THIS AGREEMENT WITNESSETH:

 

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

 

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

 

2.                                       Borrower
shall make and deliver to Lender its promissory note in writing requiring the
repayment of the sum of THREE HUNDRED FIFTY THOUSAND and 00/100 Dollars
($350,000.00) to Lender in monthly installments of Four Thousand Seven Hundred
Eighty Four and 08/100 Dollars ($4,784.08) for eighty-four (84) months after
this date with interest at the rate of four percent (4.0%) per annum at the
office of Lender, 200 South Mecklenburg Avenue, P. 0. Box 150, South Hill,
Virginia 23970, or at such other place as Lender may designate in writing.  Payments under said note shall be deemed
late if not paid within fifteen (15) days of the due date, and Borrower shall
pay Lender a late penalty of five

 

 

percent (5%) of all past due payments in the event of such late
payment, calculated on the accumulated late payments and penalties, as more
particularly provided in the Note.

 

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

 

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

 

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

 

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

 

7.                                       Borrower
hereby agrees to use all funds borrowed from Lake Country Development Corporation
solely for the purchase of new equipment to expand Borrower’s business
facilities located in Chase City, Mecklenburg County, Virginia, as stated in
the application.  In no event may the
funds be used to generate interest or to arbitrage the loan funds.

 

8.                                       Borrower
hereby agrees that it must create sixty five (65) jobs within twenty four(24)
months of the completion of the Project. 
If at least one job for every $10,000.00 borrowed (35 jobs) has not been
met within two (2) years, the loan will be called.  A good faith effort must be made to create 65 jobs.  Borrower will provide a job report to Lender
in

 

2

 

such format prescribed by the Lender on a semi-annual basis, due
annually in February and July of each year.

 

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

 

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

 

11.                                 Borrower
agrees to comply with a11 applicable environmental protection laws and statutes
and represents the following:

 

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

 

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

 

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

 

3

 

regulation, ordinance, standard, pen-nit or order in
connection with its ownership or use of any real estate or the conduct of its
business.

 

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

 

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

 

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

 

g.                   To the best
knowledge of the Borrower, no waste generated by the Borrower has ever been
sent, nor is waste: generated by the Borrower being sent, directly or
indirectly, to any site listed or formerly, proposed for listing on the
National Priority, List promulgated pursuant to CERCLA or to any site listed on
any state list of hazardous substances sites requiring investigation or clean
up.

 

h.                   “Environmental
Law” means and includes any present and future local, state, federal or
intentional law or treaty (whether under common law, statute, rule, regulation
or otherwise) relating to public health, safety or the environment, including,
by way of example, but not limitation, the following: the Recourse Conservation
and Recovery Act 42 U.S.C. 6901, et  seq., as amended by the
Hazardous and Solid Waste Act Amendments of 1984; the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601, et
seq., as amended by the Superfund Amendments and

 

4

 

Reauthorization Act of 1986, the Hazardous Materials
Transportation Act, 49 U.S.C. 1802, et seq.; the Rivers and Harbors Act
of 1899, 33 U..S.C. 401, et seq.; the Clean Water Act, 33 U.S.C. 1251, et
seq.; the Clean Water Act, 42 U.S.C. 7401, et seq.; the Toxic
Substances Control Act, 15 U.S.C. 26015 et seq.; the Safe Drinking
Water Act, 42 LI.S.C. 7901.300f, et seq.; the Uranium Mill Tailings
Radiation Control Act, 42 U.S.C. 7901, et seq.; the Federal Occupational
Safety and Health Act, 29 U.S.C. 651, et  seq.; the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. 136, et seq., the
National Environmental Policy Act, 42 U.S.C. 4321, et seq.; the Noise
Control Act, 42 U.S.C. 4901, et seq., the Emergency Planning and
Community Right to Know Act of 1986, 42 U.S.C. 11001, et seq.; the Lead
Based Paint Poisoning Prevention Act, 42 U.S.C. 4821, et seq., The
Chesapeake Bay, Prevention Act, VA Code Section 10.1-2100 et seq., and
any Regulations now or hereafter promulgated pursuant thereto and, as to all of
the foregoing, the amendments, regulations, orders, decrees, permits or
licenses now or hereafter promulgated thereunder as any of the foregoing now
exist or may be changed or amended or come into effect in the future.

 

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

 

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

 

14.                                 If
all or any part of the property securing the loan or an interest therein is
sold or transferred by Borrower without Lender’s prior written consent,
excluding the creation of a lien or encumbrance subordinate to this lien,
Lender, by operation of law, may at Lender’s

 

5

 

option declare all sums secured by this agreement to be immediately due
and payable.  Lender shall have waived
such option to accelerate if, prior to the sale or transfer, Lender and the
entity to whom the property is to be sold or transferred reach an agreement in
writing that the credit of such entity is satisfactory to Lender and that the
interest payable on the sums secured by this agreement shall be at such rate as
Lender shall request.  If Lender has
waived the option to accelerate provided herein, and if Borrower’s successor in
interest has executed a written assumption agreement accepted in writing by
Lender, Lender shall release Borrower from all obligations under this
agreement.

 

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

 

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

 

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

 

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

 

6

 

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

 

	
   

  	
  SHERWOOD BRANDS, INC.

  
	
   

  	
  A North Carolina Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Uziel Frydman

  	
   

  
	
   

  	
   

  	
   

  	
  Uziel Frydman

  
	
   

  	
  Chairman, 
  President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/ Christopher J. Willi

  	
   

  	
   

  
	
  Christopher J. Willi,  Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAKE COUNTRY DEVELOPMENT CORPORATION

  
	
   

  	
  A Virginia Non-Stock Corporation

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  F. Randolph Johns

  	
   

  
	
   

  	
  F.Randolph Jones,
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Gerald Vincent

  	
   

  	
   

  
	
  Gerald Vincent, Secretary

  	
   

  
									

 

7

 

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

 

	
  PROMISSORY NOTE

  
	
   

  
	
  $350,000.00

  
	
   

  
	
  August  13, 
  2002

  
	
   

  
	
  South Hill,Virginia

  

 

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

 

8

 

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

 

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

 

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

 

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

 

 

	
   

  	
  SHERWOOD BRANDS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By

  	
  /s/ Uziel Frydman

  	
   

  
	
   

  	
   

  	
   

  	
  Uziel Frydman

  
	
   

  	
   

  	
  Chairman, President and CEO

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
   

  
	
   

  	
   

  
	
  /s/ Christopher J. Willi

  	
   

  	
   

  
	
  Christopher J. Willi, Secretary

  	
   

  
						

 

9Exhibit 10.1 for Skybridge Wireless

E-2

                           Consultant Stock Plan 2003

THIS CONSULTANT STOCK PLAN 2003 ("Plan") is made effective as of October 29,
2003 by SKYBRIDGE WIRELESS, INC. ("Company"), for various consultants as
designated by the Board ("Consultants").

                                R E C I T A L S:

        The Company wishes to grant, and the Consultants wish to receive, as
compensation for consultation services to the Company, a total of 20,000,000
Shares of the common stock of the Company ("Common Stock"), all pursuant to the
provisions set forth herein;

        NOW, THEREFORE, in consideration of the sum of Ten ($10.00) Dollars,
premises, mutual promises, covenants, terms and conditions herein, and other
good and valuable considerations, the receipt and sufficiency of which are
hereby acknowledged by the parties, by issuing the Shares and by the Consultant
accepting the Shares, including any Options relating to the Shares, the parties
agree as follows:

     1.  Grant of Shares.  The Company hereby grants to the Consultants shares
of Common Stock, up to 20,000,000 shares (the "Shares") in the Company. The
Shares may be issued for a period of one year, as the duration of the Plan, and
may be issued under stock options on terms fixed by the Board of Directors and
confirmed with the respective Consultant.

     2.  Services.  Consultants have been or will be engaged by the Company and
the Company has received business consultation services and/or promises of
additional services. Services may be detailed in additional documentation,
including confirmatory letters and agreements, as provided to one or more
officers of the Company, or may be provided as otherwise acceptable to the
officers.

     3.   Compensation.  The Consultants are not entitled to receive cash
compensation, unless and until any agreement to the contrary is reached with any
particular  Consultant.  Consultants' sole compensation is the Shares identified
herein,  unless  the  parties agree otherwise as in the case of options.

     4.  Registration or Exemption.  Notwithstanding anything to the contrary
contained herein, the Shares may not be issued unless the Shares are registered
pursuant to the Securities Act of 1933, as amended ("Act").

     5.  Delivery of Shares.  The Company shall deliver, subject to the terms
and conditions of this Plan, to each Consultant, as soon as practicable, a
Certificate representing the Shares. Each Consultant agrees to be bound by the
terms and conditions under the Plan by accepting delivery of the Shares, and any
other terms individually agreed to in writing by the parties.

     6.  Company's Rights.  The existence of the Shares and/or this Plan shall
not affect in any way the rights of the Company to conduct its business.

     7.  Disclosure.  Each Consultant agrees to having read and fully considered
the disclosures under Exhibit "A" attached hereto and incorporated herein by
reference.

     8.  Amendments. This Plan may not be amended unless by the written consent
of Board.

     9.  Governing Law. This Plan shall be governed by the laws of the State of
Nevada, and the sole venue for any action arising hereunder or in connection
herewith shall be a court of competent jurisdiction in the state of the
headquarters of the Company.

     10.  Binding Effect.  This Plan shall be binding upon and for the benefit
of the parties hereto and their respective heirs, permitted successors, assigns
and/or delegates.

     12.  Captions. The captions herein are for convenience and shall not
control the interpretation of this Plan.

     11.  Cooperation. The parties agree to execute such reasonable necessary
documents  upon  advice of legal  counsel  in order to carry out the  intent and
purpose of this Plan as set forth hereinabove.

     12.  Gender and Number.  Unless the context otherwise requires, references
in this Plan in any gender shall be construed to include all other genders,
references in the singular shall be construed to include the plural, and
references in the plural shall be construed to include the singular.

     13.  Severability.   In the event anyone or more of the provisions of this
Plan shall be deemed unenforceable by any court of competent jurisdiction for
any reason whatsoever, this Plan shall be construed as if such unenforceable
provision had never been contained herein.

By order of the Board of Directors

                            EXHIBIT "A" to Stock Plan

Item 1 - Plan Information

     (a)  General Plan Information

          1. The title of the Plan is:  Consultant Stock Plan 2003 ("Plan") and
     the name of the registrant whose securities are to be offered pursuant
     to the Plan is SKYBRIDGE WIRELESS, INC. ("Company").
          2. The general nature and purpose of the Plan is to grant Consultants
     20,000,000 shares of the Common Stock of the Company as compensation for
     consultation services for the Company.
          3. To the best of Company's knowledge, the Plan is not subject to any
     of the provisions of the Employee Retirement Income Security Act of 1974,
     as amended or replaced by any subsequent law.
          4. (a) The Company shall act as Plan Administrator. The Company's
     address and telephone number is: SKYBRIDGE WIRELESS, INC.,
     6565 Spencer Street, Suite 205, Las Vegas, NV 89119, (702) 897-8704.

     The Company, as administrator of the Plan, will merely issue to the
     Consultants shares of Common Stock pursuant to the terms of the Plan, which
     may also include shares under Options.

     (b)  Securities to be Offered. Pursuant to the terms of the Plan,
     shares of the Company's Common Stock will be offered, and may be offered
     under Options.

     (c) Employees Who May Participate in the Plan. Consultants are the sole
     participants in this Plan. Consultants are eligible to receive the
     securities provided the securities have been registered or are exempt from
     registration under the Securities Act of 1933, as amended (the "Act").

     (d) Purchase of Securities Pursuant to the Plan.  The Company shall issue
     the underlying securities to Consultants as soon as practicable after
     respective agreements are signed. In the case of Options, Consultants are
     required to pay the exercise price set by the Company to receive their
     shares.

     (e) Resale Restrictions. Consultants may assign, sell, convey or otherwise
     transfer the securities received, subject to the requirements of the Act.

     (f) Tax Effects of Plan Participation.  The Plan is not qualified under
     Sec. 401 of the Internal Revenue Code of 1986, as amended or replaced by
     any subsequent law.

     (g) Investment of Funds. n/a

     (h) Withdrawal from the Plan; Assignment of Interest.  Withdrawal or
     termination  as to the Plan may occur upon  determination of the Company.
     Consultants  have the right to assign or  hypothecate  Consultant's interest in
     the Plan, subject to Plan provisions.

     (i) Forfeitures and Penalties.  n/a

     (j) Charges and Deductions and Liens Therefore.  n/a

Item 2 Registrant Information and Employee Plan Annual Information.

Registrant, upon oral or written request by Consultants, shall provide, without
charge, the documents incorporated by reference in Part II, Item 3 of Company's
Form S-8 Registration Statement for the securities as well as any other
documents required to be delivered pursuant to SEC Rule 428(b) (17 CFR Section
230.428(b)). All requests are to be directed to the Company at the address
provided above.

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