Third Amendment To Loan And Security Agreement

EXECUTION
COPY


THIRD AMENDMENT, dated as of October 1, 2002 (this "Amendment"), to LOAN AND SECURITY AGREEMENT, dated as of November 21, 1997 (as amended, modified or supplemented through the date hereof, the "Loan Agreement"), by and between COFFEE HOLDING CO. INC. ("Borrower") and WELLS FARGO BUSINESS CREDIT, INC., as assignee of Banc of America Commercial Finance Corporation, f/k/a NationsCredit Commercial Corporation ("Lender"). Terms which are capitalized in this Amendment and not otherwise defined shall have the meanings given such terms in the Loan Agreement.


WHEREAS, the Borrower has requested the Lender to consider (i) extending the maturity date of the credit facility established pursuant to the Loan Agreement and (ii) modifying certain of the terms and provisions contained in the Loan Agreement, and the Lender is willing to agree to the foregoing, subject to the terms and conditions set forth herein;


NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:


Section One. Amendment to Loan Agreement. On the Third Amendment Effective Date, the Loan Agreement is hereby amended as follows:


(a) Section 2.2(b) Facility Fees. Section 2.2(b) of the Loan Agreement is amended by deleting it in its entirety and substituting in lieu thereof the following:


"(b) Facility Fees. In addition to any facility fee previously paid
to the Lender, a facility fee for the Initial Term in the amount set
forth in Section 6(b)(i) of Schedule A (which fee shall be fully
earned as of the Third Amendment Effective Date and shall be payable
in two installments, the first of which shall be in the amount set
forth in Section 6 (b)(i)(A) of Schedule A, and shall be payable on
November 20, 2002, and the second of which shall be in the amount
set forth in Section 6(b)(i)(B) of Schedule A, and shall be payable
on November 20, 2003), and a facility fee for each Renewal Term in
the amount set forth in Section 6(b)(ii) of Schedule A (which fee
shall be fully earned as of the first day of the Renewal Term and
shall be payable in equal installments on the first day of the
Renewal Term and on the one-year anniversary thereof); provided,
that if the Loan Agreement is terminated, or the maturity of the
Loans is accelerated in accordance with the terms of Section 8.2, in
either case (x) before the last day of the Initial Term, then the
entire unpaid balance of the facility fee for the Initial Term shall
be due and payable in


full upon such termination or acceleration, or (y) before the last
day of the applicable Renewal Term, then the unpaid balance of the
facility fee for such Renewal Period shall be due and payable in
full upon such termination or acceleration."


(b) Section 4.1. Section 4.1 of the Loan Agreement is amended by deleting the last sentence thereof and replacing it with the following sentence:


"However, for purposes of computing interest on the Obligations,
such items shall be deemed applied by Lender two Business Days after
Lender's receipt of advice of deposit thereof at Lender's Bank."


(c) Section 7.1. Section 7.1 of the Loan Agreement is amended by deleting the fist sentence thereof in its entirety, and by substituting the following in lieu thereof:


"7.1 Maturity Date. Lender's Obligations to make Loans, and to
provide Credit Accommodations under this Agreement shall initially
continue in effect until the Initial Maturity Date set forth in
Section 7(a) of Schedule A (the "Initial Term"); provided, that such
date shall automatically be extended (the Initial Maturity Date, as
it may be so extended, being referred to as the "Maturity Date") for
successive additional terms of two years (each a "Renewal Term")
unless one party gives written notice to the other, not less than
sixty (60) days prior to the Maturity Date that such party elects
not to extend the Maturity Date."


(d) Schedule A of the Loan Agreement shall be amended and restated in its entirety to read as set forth in Schedule A attached hereto.


(e) Schedule B of the Loan Agreement shall be amended by adding the following defined terms in the appropriate place in alphabetical order:


"Third Amendment" means the Third Amendment to this Agreement, dated
as of October 1, 2002"


"Third Amendment Effective Date" means the date on which all of the
conditions precedent to the effectiveness of the Third Amendment
shall have been satisfied or waived in writing by the Lender."


Section Two. Representations and Warranties. To induce the Lender to enter into this Amendment, the Borrower warrants and represents to the Lender as follows:


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(a) All of the representations and warranties contained in the Loan Agreement and each other Loan Document to which the Borrower is a party continue to be true and correct in all material respects as of the Third Amendment Effective Date, as if repeated as of the Third Amendment Effective Date, except for such representations and warranties which, by their terms, are only made as of a previous date;


(b) The execution, delivery and performance of this Amendment by the Borrower are within its corporate powers, have been duly authorized by all necessary corporate action, and the Borrower has received all necessary consents and approvals (if any shall be required) for the execution and delivery of this Amendment;


(c) Upon its execution, this Amendment shall constitute the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) general principles of equity;


(d) The Borrower is not in default under any indenture, mortgage, deed of trust, or other material agreement or material instrument to which it is a party or by which it may be bound. Neither the execution and delivery of this Amendment, nor the consummation of the transactions contemplated herein, nor compliance with the provisions hereof will (i) violate any law or regulation applicable to it, (ii) cause a violation by the Borrower of any order or decree of any court or government instrumentality applicable to it, (iii) conflict with, or result in the breach of or constitute a default under, any indenture, mortgage, deed of trust, or other material agreement or material instrument to which the Borrower is a party or by which it may be bound, (iv) result in the creation or imposition of any lien, charge, or encumbrance upon any of the property of the Borrower, except in favor of the Lender, to secure the Obligations, or (v) violate any provision of the Certificate of Incorporation, By-Laws or any capital stock provisions of the Borrower;


(e) No Event of Default has occurred and is continuing; and


(f) Since the date of the Lender's receipt of the financial statements of the Borrower for the six-month period ended on April 30, 2002, no change or event has occurred which has had or is reasonably likely to have a material adverse effect on the Borrower's business, operations, condition (financial or otherwise) or prospects (a "Material Adverse Effect").


Section Three. Conditions Precedent. This Amendment shall become effective upon the date that the last of the following events shall have occurred or been waived in writing by the Lender (the "Third Amendment Effective Date"):


(a) The Lender shall have received this Amendment, duly executed by the Borrower.


(b) No Default shall have occurred and be continuing which constitutes an Event of Default or would constitute an Event of Default upon the giving of notice or lapse of time or both, and no event or development which has had or is reasonably likely


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to have a Material Adverse Effect shall have occurred, in each case since the date of delivery to the Lender of the Borrower's most recent financial statements.


(c) The Lender shall have received (i) an officer's certificate, executed by the chief financial officer or chief executive officer of the Borrower, confirming the truth and accuracy of the representations and warranties contained in Section Two and Section Three (b) hereof, and (ii) a secretary's certificate, executed by the corporate secretary of the Borrower, in form reasonably satisfactory to the Lender.


(d) The Lender shall have received a confirmation of Guaranty from each of David Gordon and Andrew Gordon, duly executed by each of them, in the form of Exhibit A to this Agreement.


Section Four. General Provisions.


(a) Upon the Lender's receipt and satisfactory review of the appraisal of the Borrower's Equipment currently being performed (the "Appraisal"), and the satisfaction of the condition precedent hereinafter described, so long as no Event of Default shall have occurred and shall then be continuing, Lender shall make an Equipment Advance to the Borrower in an amount equal to the lesser of $750,000 and 85% of the appraised auction sale value of the Borrowers' Eligible Equipment, based on the Appraisal, minus the unpaid principal balance of the Term Loan then outstanding. ...