<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>5
<FILENAME>e14268ex10_7.txt
<DESCRIPTION>THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
<TEXT>
                                                                    Exhibit 10.7

                                                                       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


<PAGE>

            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:


                                      B-2
<PAGE>

      (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


                                      B-3
<PAGE>

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.  Upon the making of such Equipment Advance, the term
"Term Loan", as used in the Loan Agreement,  shall include the principal  amount
of such  Equipment  Advance.  As a  condition  precedent  to the  making of such
Equipment Advance,  the Borrower shall have executed and delivered to the Lender
a  promissory  note in the form of  Exhibit B  attached  hereto,  with all blank
spaces  duly and  accurately  completed,  and  Lender  shall  promptly  mark the
promissory note evidencing the Term Loan,  dated as of November 29, 2000, in the
principal amount of $600,000 "canceled", and return it to the Borrower.

      (b) Except as herein expressly  amended,  the Loan Agreement and all other
agreements,  documents,  instruments  and  certificates  executed in  connection
therewith,  are ratified and  confirmed in all respects and shall remain in full
force and effect in accordance with their respective terms.

      (c) All  references to "the Loan  Agreement" in the Loan  Agreement  shall
mean the Loan Agreement as amended as of the Third Amendment Effective Date, and
as amended hereby and as hereafter amended,  supplemented and modified from time
to time.

      (d) This Amendment  shall be governed by and construed in accordance  with
the internal laws of The State of New York,  without  regard to the conflicts of
law principles thereof.

      (e) To the extent not already  obtained,  the  Borrower  agrees to use its
reasonable  best efforts to obtain from (i) each  warehouseman,  bailee or other
Person that has  possession  or control  from time to time of any  Inventory  or
Equipment  of the  Borrower  a  written  acknowledgement  by such  Person of the
Lender's security interest


                                      B-4
<PAGE>

therein and right to obtain  access  thereto and (ii) T & O  Management  Corp. a
landlord's  waiver of lien in favor of the Lender,  containing  such other terms
and conditions as the Lender may reasonably require.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                      B-5
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized and delivered at
New York, New York as of the date first above written.

                                       COFFEE HOLDING CO. INC.

                                       By: _____________________________________
                                           Name:
                                           Title:

                                       WELLS  FARGO  BUSINESS CREDIT,  INC.,  as
                                       assignee  of  Banc  of America Commercial
                                       Finance Corporation, f/k/a  NationsCredit
                                       Commercial Corporation

                                       By: _____________________________________
                                           Name:
                                           Title:


                                      B-6
<PAGE>

                                   Schedule A

                          Description of Certain Terms

      This Schedule is an integral part of the Loan and Security Agreement dated
as of November 21, 1997 (as amended through the date hereof,  the  "Agreement"),
between  COFFEE  HOLDING  CO.,  INC (the  "Borrower")  and WELLS FARGO  BUSINESS
CREDIT,  INC. (as assignee of Banc of America  Commercial  Finance  Corporation,
f/k/a NationsCredit Commercial Corporation, in such capacity, the "Lender").

      1.    Loan Limits for Revolving Loans:

            (a)   Maximum Facility Amount: $5,000,000

            (b)   Advance Rates:

                  (i)   Accounts                   85%;  provided,  that  if the
                        Advance Rate:              Dilution  Percentage  exceeds
                                                   4%, such advance rate will be
                                                   reduced by the number of full
                                                   or partial  percentage points
                                                   of such excess

                  (ii)  Inventory
                        Advice
                        Rate(s):

                  (A)   Finished goods:            60%

                  (B)   Raw materials:             60%

                  (C)   Work in process:           Not Applicable

                  (iii) Cash Collateral            Not Applicable

            (c)   Accounts Sublimit                Not Applicable

            (d)   Inventory Sublimit(s):

                  (i)   Overall sublimit on        $1,000,000  or,  if less, the
                        advance against Eligible   aggregate  advances   against
                        Inventory                  Accounts   at   any  time  of
                                                   determination

                  (ii)  Sublimit on advances       Not Applicable
                        against finished goods


<PAGE>

                  (iii) Sublimit on advances       Not Applicable
                        against raw materials

            (e)         Credit                     $500,000
                        Accommodation
                        Limit:

            (f)         Permanent Reserve Amount:  Not Applicable

            (g)         Overadvance Amount:        Not Applicable

      2.    Loan Limits for Term Loan:

            (a)   Principal Amount:

                  (i)   Equipment                  The  lesser  of  $750,000 and
                        Advance                    85% of the  appraised auction
                                                   sale   value  of   Borrower's
                                                   Eligible Equipment, as of the
                                                   most     recent     appraisal
                                                   performed  subsequent  to the
                                                   Third   Amendment   Effective
                                                   Date

                  (iv)  Real Property              Not Available
                        Advance:

            (b)   Repayment Schedule:

                  (i)   Equipment                  The  Equipment  Advance shall
                        Advance:                   be repaidconsisting  based on
                                                   an  amortization  schedule of
                                                   60    months,     in    equal
                                                   consecutive           monthly
                                                   installments,  payable on the
                                                   first  day of  each  calendar
                                                   month, commencing November 1,
                                                   2002,  with the entire unpaid
                                                   balance  due and  payable  on
                                                   the Maturity Date

                  (ii)

                  (iii)


                                      B-2
<PAGE>

                  (iv)  Real Property              Not Applicable
                        Advance:

        3.  Interest Rates:

            (a)   (i) Revolving Loans:             0.25%  per annum in excess of
                                                   the Prime Rate

            (b)   Term Loan:                       0.50%  per annum in excess of
                                                   the Prime Rate

        4.  Minimum Loan Amount:                   $2,000,000

        5.  Maximum Days: the lesser of

            (a)   Maximum days after original      60 days
                  due date for Eligible Accounts:

            (b)   Maximum days after original      90 days
                  invoice date for Eligible
                  Accounts:

        6.  Fees:

            (a)   Closing Fee:                     N/A

            (b)   Facility Fee:

                  (i)   Initial Term:              $18,500

                        (A)                        $10,000

                        (B)                        $8,500

                  (ii)  Renewal Term               $18,500

            (c)   Service Fee:                     Not Applicable

            (d)   Unused Line Fee:                 Not Applicable

            (e)   Minimum Borrowing Fee:

                  (i)   Applicable Period:         Each Year

                  (ii)  Date payable:              Each  anniversary of the date
                                                   of the Agreement


                                      B-3
<PAGE>

            (f)   Success Fee:                     Not Applicable

            (g)   Warrants:                        Not Applicable

            (h)   Early Termination                3% of  the  Maximum  Facility
                                                   Amount  if  terminated  on or
                                                   prior    to   the    one-year
                                                   anniversary   of  the   Third
                                                   Amendment  Effective Date; 2%
                                                   of   the   Maximum   Facility
                                                   Amount  if  terminated  after
                                                   the one-year  anniversary  of
                                                   the Third Amendment Effective
                                                   Date  and on or  prior to the
                                                   two-year  anniversary  of the
                                                   Third   Amendment   Effective
                                                   Date  and 1% of  the  Maximum
                                                   Facility Amount if terminated
                                                   at   any   time   after   the
                                                   two-year  anniversary  of the
                                                   Third   Amendment   Effective
                                                   Date   and   prior   to   the
                                                   Maturity Date;  provided that
                                                   the  Early   Termination  Fee
                                                   will be  waived  by Lender if
                                                   Borrower  transfers the Loans
                                                   and   all   of   its    other
                                                   Obligations    hereunder   to
                                                   another   division  of  Wells
                                                   Fargo Bank.

            (i)   Fees for letters of credit       1 % per  annum  of  the  face
                  and other Credit Accommodations  amount  of each  open  Credit
                  (or guaranties thereof           Accommodation, plus all costs
                  by Lender):                      and  fees   charged   by  the
                                                   issuer

            (j)   Field Exam Fee:                  $750 per day per person  plus
                                                   all  out-of-pocket  expenses,
                                                   provided, that if no Event of
                                                   Default has  occurred  during
                                                   any   consecutive   365   day
                                                   period commencing on November
                                                   20 of  each  year,  then  the
                                                   maximum  amount  of the field
                                                   exam   fees  for   which  the
                                                   Borrower  shall be  obligated
                                                   to pay the Lender during such
                                                   period   shall   not   exceed
                                                   $10,000.

      7.    Maturity Date:


                                      B-4
<PAGE>

            (a)   Initial Maturity Date:           November 20, 2004

      8.    Financial Covenants:

            (a)   Capital Expenditure              Not Applicable
                  Limitation:

            (b)   Minimum Net Worth                Not Applicable
                  Requirement:

            (c)   Minimum Tangible                 Not Applicable
                  Net Worth:

            (d)   Minimum Working                  Not Applicable
                  Capital:

            (e)   Maximum Cumulative               Not Applicable
                  Net Loss:

            (f)   Minimum Cumulative               -for   the   fiscal   quarter
                  Net Income:                      ending  January  31  of  each
                                                   fiscal year,  commencing with
                                                   January  31,  2003;  -for the
                                                   period of two fiscal quarters
                                                   ending   April   30  of  each
                                                   fiscal year,  commencing with
                                                   April  30,  2003;   -for  the
                                                   period   of   three    fiscal
                                                   quarters  ending  July  31 of
                                                   each fiscal year,  commencing
                                                   with July 31, 2002;  and -for
                                                   the  period  of  four  fiscal
                                                   quarters ending October 31 of
                                                   each fiscal year,  commencing
                                                   with  October 31,  2002,  the
                                                   Borrower shall be required to
                                                   maintain a minimum cumulative
                                                   net   income   in  an  amount
                                                   mutually agreed upon with the
                                                   Lender,  but in no event less
                                                   than  67% of  the  cumulative
                                                   net income  projected  by the
                                                   Borrower    for   each   such
                                                   period,  as  reflected in its
                                                   forecasted  income  statement
                                                   for the  fiscal  year  ending
                                                   October   31


                                      B-5
<PAGE>

                                                   of each year, commencing with
                                                   October 31, 2002.




            (g)   Maximum Leverage Ratio:          Not Applicable

            (h)   Limitation on Equipment          Not Applicable
                  Leases:

            (i)   Limitation on Purchase           Not Applicable
                  Money Security Interests:

            (j)   Additional Financial             Not Applicable
                  Covenants:

      9.    Borrower Information:

            (a)   Prior Name of Borrower:          None

            (b)   Prior Trade Names of Borrower    None

            (c)   Existing Trade Names             None
                  of Borrower:

            (d)   Inventory Locations:             Continental Terminals, Inc.
                                                   738 Third Avenue
                                                   Brooklyn, New York 11232

            (e)   Other Locations:                 4425a First Avenue
                                                   Brooklyn, New York 11232

                                                   4401 First Avenue
                                                   Brooklyn, New York 11232-0005

                                                   54 A Hackensack Avenue
                                                   River Terminal
                                                   Kearny, NJ  07032

            (f)   Litigation:                      None

            (g)   Ownership of                     Andrew Gordon - 32.5%
                  Borrower                         David Gordon - 32.5%
                                                   Mr. and Mrs. Sterling Gordon
                                                   - 15.0%
                                                   Other - 20.0%

            (h)   Subsidiaries (and) ownership     None
                  thereof):


                                      B-6
<PAGE>

            (i)   Facsimile Numbers:

                  Borrower:                        718-832-0892

                  Lender:                          646-728-3279

       10.  Description of Real Property           None

       11.  Lender's Bank:                         Wells Fargo Bank

       12.  Other Covenants:                       None

       13.  Exceptions to Negative Covenants:      None

       14.  Cash Collateral:                       None

       15.  Guaranties:

            (a)   Guarantors:                      Andrew Gordon
                                                   David Gordon
            (b)   Amount:                          Each in the amount of
                                                   $500,000


                                      B-7
<PAGE>

      IN WITNESS WHEREOF,  Borrower and Lender have signed this Schedule A as of
the date set forth in the Third Amendment to which this Schedule is attached.

Borrower:                               Lender:

COFFEE HOLDING CO., INC.                WELLS FARGO BUSINESS  CREDIT,  INC., (as
                                        assignee  of Banc of America  Commercial
                                        Finance Corporation, f/k/a NationsCredit
                                        Commercial Corporation)

By: ________________________________    By: ____________________________________
    Name:                                   Name:
    Title:                                  Title:

</TEXT>
</DOCUMENT>
