Exhibit 10.1


 


THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT


 


This Third
Amendment to Loan and Security Agreement (this “Third Amendment”) made and
entered into as of the 31st day of January, 2005, is by and between LASALLE BANK NATIONAL ASSOCIATION, a national banking association
(“LENDER”), having its principal place of
business at 135 South LaSalle Street, Chicago, Illinois 60603-4105, and VITA FOOD PRODUCTS, INC., a Nevada corporation, with its chief
executive office located at 2222 West Lake Street, Chicago, Illinois 60612
(“Vita Food”), VIRGINIA HONEY COMPANY, INC., a Virginia
corporation, with its chief executive office located at 2222 West Lake Street,
Chicago, Illinois 60612 (“Virginia Honey”), THE HALIFAX GROUP, INC., a Georgia
corporation, with its chief executive office located at 2222 West Lake Street,
Chicago, Illinois 60612 (“Halifax”), and VITA SPECIALTY FOODS, INC., a Delaware
corporation, with its chief executive office located at 2222 West Lake Street,
Chicago, Illinois 60612  (“Specialty Foods”)
(Vita Food, Virginia Honey, Halifax and Specialty Foods are individually a
“Borrower” and collectively the “Borrowers”).


 


W I T N E S S E T H:


 


WHEREAS, prior
hereto, Lender provided certain loans, extensions of credit and other financial
accommodations (the “Financial Accommodations”) to Borrowers pursuant to (a)
that certain Loan and Security Agreement dated as of September 5, 2003, as
amended by that certain First Amendment to Loan and Security Agreement dated as
of November 5, 2004, and that certain Second Amendment to Loan and Security
Agreement dated as of December 21, 2004, each by and between Lender and
Borrowers (as further amended or restated from time to time, the “Loan
Agreement”), and (b) the other documents, agreements and instruments referenced
in the Loan Agreement or executed and delivered pursuant thereto;


 


WHEREAS, Borrowers
have requested that Lender, among other things, (i) extend the maturity date of
the Revolving Loans to April 1, 2006, and (ii) modify certain financial
covenants (collectively the “Additional Financial Accommodations”); and


 


WHEREAS, Lender is
willing to provide the Additional Financial Accommodations, but solely on the
terms and subject to the provisions set forth in this Third Amendment and the
other agreements, documents and instruments referenced herein or executed and
delivered pursuant hereto.


 


NOW, THEREFORE, in
consideration of the foregoing, the mutual promises and understandings of the
parties hereto set forth herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Lender and Borrowers
hereby agree as set forth in this Third Amendment.


 


I.              Definitions.


 


A.            Use of Defined Terms.  Except as expressly set forth in this Third
Amendment, all terms which have an initial capital letter where not required by
the rules of grammar are used herein as defined in the Loan Agreement.


 





















 


B.            Amended Definitions.  Effective as of the date of this Third
Amendment, Section 1.1 of the Loan Agreement is hereby amended by deleting the
definitions of “Revolving Loan Termination Date”, “Revolving Note” and
“Tangible Net Worth Benchmark” and substituting therefor the following,
respectively:


 


“Revolving
Loan Termination Date”: shall mean April 1, 2006.


 


“Revolving
Note”: shall mean that certain Revolving Note dated as of
January 31, 2005, executed and delivered by Borrowers to Lender in a maximum
aggregate principal amount not to exceed $8,500,000.00, as amended, renewed,
restated or replaced from time to time.


 


“Tangible Net
Worth Benchmark”: shall mean: (i) negative Two Million One
Hundred Fifty Thousand and no/100 Dollars (-$2,150,000.00) as of March 31,
2005, (ii) negative One Million Nine Hundred Thousand and no/100 Dollars

(-$1,900,000.00) as of June 30, 2005 through September 30, 2005, and (iii)
negative Eight Hundred Thousand and no/100 Dollars (-$800,000.00) as of
December 31, 2005, and at all times thereafter.


 


II.            Amendments to Loan Agreement.  Effective as of the date of this Third
Amendment, Section 9.4 of the Loan Agreement is hereby amended by deleting
Section 9.4 of the Loan Agreement in its entirety and substituting therefor the
following:


 


“9.4         Financial Covenants.  During the term of this Loan Agreement, and
thereafter for so long as there are any outstanding Liabilities owed to Lender,
Borrowers covenant that they shall:


 


(A)          Tangible Net Worth.  Maintain
a minimum Tangible Net Worth of not less than the Tangible Net Worth Benchmark
tested as of the last day of each calendar quarter.


 


(B)           Cash Flow Coverage
Ratio.  Not permit Borrowers’ Cash
Flow Coverage Ratio, calculated on a trailing twelve (12) month basis, to be
less than: (i) 0.65 to 1.00 as of June 30, 2005, (ii) 0.70 to 1.00 as of
September 30, 2005, and (iii) 1.10 to 1.00 as of December 31, 2005, or as of
the last day of each calendar quarter thereafter.


 


(C)           Minimum EBITDA.  Borrowers shall maintain EBITDA of not less
than: (i) Five Hundred Seventy-Five Thousand and no/100 Dollars ($575,000.00)
as of March 31, 2005, (ii) One Million Four Hundred Thousand and no/100 Dollars
($1,400,000.00) as of June 30, 2005, (iii) Two Million and no/100 Dollars
($2,000,000.00) as of September 30, 2005, and (iv) Three Million and no/100
Dollars ($3,000,000.00) as of December 31, 2005 and as of the last day of each
calendar quarter thereafter.  EBITDA
shall be calculated on a trailing twelve (12) month basis.”


 


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III.           Conditions Precedent.  Lender’s obligation to provide the Additional
Financial Accommodations to Borrowers is subject to the full and timely
performance of the following covenants prior to or contemporaneously with the
execution of this Third Amendment:


 


A.            Borrowers
executing and delivering, or causing to be executed and delivered to Lender,
the following documents, each of which shall be in form and substance
acceptable to Lender:


 


(i)            An original executed
Revolving Note;


 


(ii)           An original Secretary’s
Certificate of even date herewith executed by the Secretary of each Borrower to
Lender; and


 


(iii)          such other agreements,
documents and instruments as Lender may reasonably request;


 


B.            No
Unmatured Event of Default or Event of Default exists under the Loan Agreement,
as amended by this Third Amendment, or the Other Agreements;


 


C.            No
claims, litigation, arbitration proceedings or governmental proceedings not
disclosed in writing to Lender prior to the date of hereof shall be pending or
known to be threatened against Borrowers and no known material development not
so disclosed shall have occurred in any claims, litigation, arbitration
proceedings or governmental proceedings so disclosed which in the opinion of
Lender is likely to materially or adversely affect the financial position or
business of any Borrower or the capability of any Borrower to pay its obligations
and liabilities to Lender; and


 


D.            There
shall have been no material or adverse change in the business, financial
condition or results of operations since the date of each Borrower’s most
recently delivered financial statements to Lender.


 


IV.           Conflict.  If, and to the extent, the terms and
provisions of this Third Amendment contradict or conflict with the terms and
provisions of the Loan Agreement, the terms and provisions of this Third
Amendment shall govern and control; provided, however, to the extent the terms
and provisions of this Third Amendment do not contradict or conflict with the
terms and provisions of the Loan Agreement, the Loan Agreement, as amended by
this Third Amendment, shall remain in and have its intended full force and
effect, and Lender and Borrowers hereby affirm, confirm and ratify the same.


 


V.            Severability.  Wherever possible, each
provision of this Third Amendment shall be interpreted in such manner as to be
valid and enforceable under applicable law, but if any provision of this Third
Amendment is held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be severed herefrom and such invalidity or
unenforceability shall not affect any other provision of this Third Amendment,
the balance of which shall remain in and have its intended full force and
effect.  Provided, however, if such
provision may be modified so as to be valid and enforceable as a matter of law,
such provision


 


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shall be deemed to be modified
so as to be valid and enforceable to the maximum extent permitted by law.


 


VI.           Reaffirmation.  Borrowers hereby reaffirm and remake all of
the representations, warranties, covenants, duties, obligations and liabilities
contained in the Loan Agreement, as amended hereby.


 


VII.          Fees, Costs and Expenses. 
Borrowers agree to pay, upon demand, all fees, costs and expenses of
Lender, including, but not limited to, reasonable attorneys’ fees, in
connection with the preparation, execution, delivery and administration of this
Third Amendment and the other agreements, documents and instruments executed
and delivered in connection herewith or pursuant hereto.


 


VIII.        Choice of Law.  This Third Amendment has been delivered and
accepted in Chicago, Illinois, and shall be governed by and construed in
accordance with the laws of the State of Illinois, regardless of the laws that
might otherwise govern under applicable principles of conflicts of law as to
all matters, including matters of validity, construction, effect, performance
and remedies.


 


IX.           Counterpart.  This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.


 


X.            Waiver of Jury Trial. 
BORROWERS AND LENDER EACH HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL
BY JURY.


 


[signature page follows]


 


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IN WITNESS WHEREOF, Lender and Borrowers
have caused this Third Amendment to be executed and delivered by their duly
authorized officers as of the date first set forth above.


 


	
  LASALLE BANK NATIONAL ASSOCIATION,

  	
  VITA
  FOOD PRODUCTS, INC.,

  
	
  a national banking association

  	
  a Nevada corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Sara A. Huizinga

  	
   

  	
  By:

  	
  /s/ Stephen D. Rubin

  	
   

  
	
  Name:

  	
  Sara A. Huizinga

  	
   

  	
  Name:

  	
  Stephen D. Rubin

  	
   

  
	
  Title:

  	
  Assistant Vice President

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  VIRGINIA
  HONEY COMPANY, INC.,

  
	
   

  	
   

  	
  a Virginia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Clark L. Feldman

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Clark L. Feldman

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE
  HALIFAX GROUP, INC.,

  
	
   

  	
   

  	
  a Georgia corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Treasurer & Secretary

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VITA
  SPECIALTY FOODS, INC.,

  
	
   

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Clifford Bolen

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  	
   

  
							



 


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