Document:

<PAGE>
                                                                    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: /s/ Andrew Gordon
                                           _____________________________________
                                           Name:  Andrew Gordon
                                           Title: President/CEO

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

                                       By: /s/ Michael J. Eggenberg
                                           _____________________________________
                                           Name:  Michael J. Eggenberg
                                           Title: Officer

                                      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: /s/ Andrew Gordon                   By: /s/ Michael J. Eggenberg
    --------------------------------        ----------------------------------
    Name:  Andrew Gordon                    Name:  Michael J. Eggenberg
    Title: President/CEO                    Title: Officer<PAGE>
                                                                    Exhibit 10.9

--------------------------------------------------------------------------------
HSBC Business Credit (USA) Inc.                                  LEASE AGREEMENT
--------------------------------------------------------------------------------

      The  undersigned  lessor  (herein,  "Lessor")  does  hereby  lease  to the
undersigned  lessee  Coffee  Holding  Co.,  Inc. a Nevada  corporation  (herein,
"Lessee"),  subject  to the  terms  and  conditions  set  forth,  the  equipment
described below,  together with all attachments and accessories now or hereafter
affixed  thereto,  and  substitutions  and  replacements  thereof  (herein,  the
"Equipment"):

--------------------------------------------------------------------------------
Equipment Description
--------------------------------------------------------------------------------
Two (2) ICA Automatic Packaging Machines,  S/N; V3649, S/N V3650,  including all
attachment and accessories.
--------------------------------------------------------------------------------
No. of Rental                Commencement Date             Lease Expiration Date
Installments 36              July 19, 2002                 July 19, 2005
--------------------------------------------------------------------------------
Rental Installment                  Other Terms: See $1 Purchase Rider
Amount                              attached hereto and by this reference made a
$11,770.71                          part hereof.
--------------------------------------------------------------------------------

EQUIPMENT LOCATION:

      Upon  execution  of this Lease,  Lessee  shall pay to Lessor the first N/A
Rental  Installment(s)  and a Security Deposit in the amount of $-0-. All rental
installments  are based on an Equipment cost to Lessor equal to $383,763.60.  In
the  event  the  Lessor's  cost is other  than as set forth  above,  the  rental
installment amount set forth above shall be adjusted accordingly.

TERMS AND CONDITIONS

      1. Lessee  acknowledges  that it has  reviewed  and  approved  any written
Supply Contract and that Lessor has advised Lessee in writing of the identity of
the  Supplier of the  Equipment,  that Lessee is  entitled to the  promises  and
warranties,  if any, of the Supplier or any third party provided by the Supplier
to Lessor in connection  with or as part of the Supply  Contract and that Lessee
may  contact  Supplier  for an accurate  and  complete  description  of any such
promises and warranties, including any disclaimers and limitations of them or of
remedies.  Lessee shall be deemed to have  irrevocably  accepted  the  Equipment
under this Lease by its  execution of Lessor's  form of Delivery and  Acceptance
Certificate. If the Commencement Date is left blank above, then the Commencement
Date is the date of delivery  and  acceptance  of the  equipment  as evidence by
Lessee's execution of the Delivery and Acceptance  Certificate.  The rental term
of the Equipment  shall commence upon the  Commencement  Date and shall continue
until  the  lease  expiration  date set forth  above.  Lessee  shall pay rent to
Lessor,  monthly in  advance,  in the Rental  Installment  amounts,  and for the
number of Rental  Installments both as set forth above, on the first day of each
month (unless  otherwise  provided herein) during the term hereof,  plus, in the
case of the first  Rental  Installment,  the per diem  equivalent  of the Rental
Installment  for  each  day  from and  including  the  Commencement  Date to and
including the day immediately preceding the due date of such Rental Installment.

                               Member HSBC Group

<PAGE>

      2. All  rentals  shall be paid to Lessor at Lessor's  address,  or at such
other address as Lessor may specify by notice to Lessee.  All such rentals shall
be paid without  notice or demand,  and Lessee's  obligation to pay such rentals
shall be absolute and unconditional and not subject to any abatement, reduction,
set-off,  defense,   counterclaim  or  recoupment  (for  any  reason  whatsoever
(including,  without limitation,  Abatements due to any present or future claims
of  Lessee  against  Lessor  under  this  Lease or  otherwise,  or  against  the
manufacturer  or vendor of the Equipment);  nor,  except as otherwise  expressly
provided  herein,  shall  this  Lease  terminate  or the  obligations  of Lessee
hereunder  be  affected  by reason of any defect in or damage to, or any loss or
destruction of, any Equipment front any cause  whatsoever,  or the  interference
with  the  use  thereof  by any  private  person,  corporation  or  governmental
authority, or the invalidity or unenforceability or lack of due authorization of
this Lease or lack of right, power or authority to enter into this Lease, or fur
any other cause, whether similar or dissimilar to the foregoing,  any present or
future law or  regulation  to the  contrary  notwithstanding.  If any rentals or
other sums due  hereunder  are not paid within 10 days of the due date  thereof,
Lessee shall pay to Lessor on demand,  as additional  rental, an amount equal to
five percent (5%) of such past due rentals or sums.

      3. To the extent  that,  contrary to the  intention  of the  parties,  the
transaction  evidenced  hereby is deemed to be a pledge or  security  agreement,
Lessee  hereby  grants a security  interest in and to the Equipment to Lessor to
secure the obligations of Lessee hereunder.

      4. Until the Equipment is returned to Lessor in accordance  with the terms
of this Lease,  Lessee shall: (a) use the Equipment solely in the conduct of its
business,  (b) keep the Equipment at the address  specified in this Lease, or as
set forth in the Delivery and Acceptance Certificate,  and not remove all or any
part of the Equipment therefrom without the Lessor's prior written consent,  (c)
use and preserve the Equipment in a careful,  proper and lawful  manner,  and in
accordance  with   manufacturer's   specifications   and  applicable   insurance
requirements,  (d) at its own  expense,  keep  the  Equipment  in  good  repair,
condition and working order and furnish any and all parts and labor required for
that  purpose,  and in this  connection  shall use only spare and  repair  parts
manufactured or furnished by the manufacturer of the Equipment, (e) not make any
material  alterations  to the  Equipment  without the prior  written  consent of
Lessor,  and Lessee  agrees that all  equipment,  attachments,  accessories  and
repairs  at any time  made to or placed  upon the  Equipment  shall  immediately
become the  property  of Lessor,  and shall be deemed to have been  incorporated
into the Equipment  and subject to the terms and  conditions of this Lease as if
originally leased hereunder, (f) promptly notify Lessor of any loss of or damage
to the  Equipment,  (g) assume  and shall  bear the  entire  risk of loss of and
damage  to the  Equipment,  and  injury  or death  to  persons,  from any  cause
whatsoever pursuant to the provisions of' this Lease, and provide full insurance
coverage as hereinafter  provided,  (h) mark and identify the Equipment with all
information  and in such  manner as  Lessor  may  request  from time to time and
replace promptly any such markings or identifications which are removed, defaced
or  destroyed,  (i)  permit  reasonable  access by  Lessor or its  agents to the
Equipment  during normal business hours for purposes of inspection,  (j) protect
and  defend,  at its own cost and  expense,  the  title of  Lessor in and to the
Equipment from and against all claims,  liens,  encumbrances and legal processes
of Lessee's  creditors or any other party claiming by or through Lessee, and (k)
NOT ASSIGN,  SUBLET OR HYPOTHECATE  ANY OF THE EQUIPMENT OR ANY INTEREST IN THIS
LEASE OR ALLOW THE EQUIPMENT TO BE USED BY PERSONS  OTHER THAN  EMPLOYEES OF THE
LESSEE,  AND ANY ATTEMPT TO DO SO SHALL CONSTITUTE

                               Member HSBC Group

                                       2
<PAGE>

A DEFAULT HEREUNDER AND SUCH ASSIGNMENT, SUBLEASE OR HYPOTHECATION SHALL BE VOID
AND WITHOUT EFFECT.

      5. Lessee shall,  at its expense,  insure and keep the  Equipment  insured
against all risks of physical  loss at not less than the lesser of: (a) the full
replacement value thereof or (b) the Stipulated Loss Value (if any) shown herein
or on any  addendum,  amendment  or  attachment  hereto  (the  "Stipulated  Loss
Value");  but in any  event an  amount  sufficient  to avoid  the  effect of any
coinsurance clause.  Lessee shall further, at its expense,  provide and maintain
comprehensive public liability insurance against claims for bodily injury, death
and/or property damage arising out of the use, ownership,  possession, operation
or  condition of the  Equipment,  together  with such other  insurance as may be
required by law or reasonably requested by Lessor. All said insurance shall name
both  Lessor and Lessee as parties  insured  and shall be in form and amount and
with  insurers  satisfactory  to  Lessor,  and  Lessee  shall  furnish to Lessor
certified  copies or  certificates  of the policies of such  insurance  and each
renewal  thereof.  Each  insurer  must agree by  endorsement  upon the policy or
policies  issued by it that it will give  Lessor not less than 30 days'  written
notice  before such policy or policies arc  cancelled,  nonrenewed or materially
altered  and,  with  respect to property  insurance,  that (aa) losses  shall be
payable  solely to Lessor,  and (bb) no act or  omission of Lessee or any of its
officers,  agents,  employees or representatives shall affect the obiligation of
the  insurer  to pay the full  amount of any  loss.  Lessee  hereby  irrevocably
authorizes  Lessor to make,  settle  and  adjust  claims  under  such  policy or
policies of property insurance and to endorse the name of Lessee on any check or
other item of payment for the proceeds thereof;  it being  understood,  however,
that unless otherwise directed in writing by Lessor,  Lessee shall make and file
timely all claims under such policy or policies,  and Lessee may,  unless Lessee
is then in default, settle and adjust all such claims.

      6. Lessee  agrees to report and pay to the  appropriate  authority any and
all license fees, registration fees,  assessments,  charges and taxes, including
penalty and interest,  if any,  assessed against the Equipment or the ownership,
purchase, rental or use of the Equipment, except for taxes payable in respect to
Lessor's net income.  Unless Lessee provides Lessor with a valid  certificate of
exemption, Lessee shall pay all applicable sales or use taxes to Lessor.

      7. LESSEE HEREBY WAIVES ANY RIGHT TO CANCEL,  REPUDIATE OR TERMINATE  THIS
LEASE.  REVOKE  ACCEPTANCE  OF THE  EQUIPMENT,  ACCEPT  PARTIAL  DELIVERY OF THE
EQUIPMENT,  "COVER" BY  PURCHASING  OR LEASING  REPLACEMENT  EQUIPMENT,  RECOVER
SPECIAL OR  CONSEQUENTIAL  DAMAGES  AND ANY RIGHT TO SEEK  SPECIFIC  PERFORMANCE
HEREOF.

      THIS LEASE SETS FORTH THE FULL  AGREEMENT  BETWEEN THE PARTIES AND MAY NOT
BE MODIFIED,  EXCEPT IN A WRITING SIGNED BY THEM. NEITHER THIS LEASE NOR LESSEES
RIGHTS IN THE EQUIPMENT MAY BE ASSIGNED BY LESSEE.

      8. The Equipment shall remain personal property notwithstanding the manner
in which it may be attached to realty,  and title thereto shall remain in Lessor
exclusively.   Lessee  shall  keep  the  Equipment   free  from  all  liens  and
encumbrances.  Lessee shall execute and/or to Lessor any further instruments and
assurances  reasonably  requested  from time to time by Lessor  to  protect  its
interest,  and Lessee shall  otherwise  cooperate and defend the title of Lessor
and to

                               Member HSBC Group

                                       3
<PAGE>

maintain the status of the Equipment as personal  property,  including,  without
limitation,  the execution of financing statements,  motor vehicle documentation
(for the purpose of obtaining titles in Lessor's name, noting liens on vehicles,
obtaining  repossession  title  certificates  or otherwise  protecting  Lessor's
interest in vehicles)  and the  furnishing  of waivers with respect to rights in
the  Equipment  from the owners and  mortgagees  of the real estate on which the
Equipment is or will be located,  all at Lessee's expense.  Without limiting the
foregoing,  Lessee hereby authorizes and irrevocably appoints Lessor as Lessee's
attorney-in-fact,  coupled with an interest, with full power of substitution, to
execute  and  file  such  financing  statements,   motor  vehicle  documentation
(relating to titles,  lien notation and/or  repossession title certificates) and
other  documents in all places where necessary to protect  Lessor's  interest in
the Equipment.

      9.  Lessor  shall not be  liable  for any  direct,  indirect,  special  or
consequential  damages or loss (a) resulting  from the  non-delivery,  delivery,
manufacture,  installation, use, ownership or operation of the Equipment or from
any defects in or failures,  malfunctions,  repairs, replacements or alterations
thereof,  or (b) arising out of this Lease or any breach hereof,  or (c) without
limitation, arising out of any other liability of any nature with respect to the
Equipment, or this Lease or any breach thereof (hereinafter "Liabilities"),  and
Lessee shall and hereby does indemnify and hold harmless Lessor,  its directors,
officers,  employees,  agents  and  representatives,  from  any and all  claims,
actions, suits, proceedings, costs, expenses, damages and liabilities, including
attorneys'  fees,  arising out of, connected with, or resulting from, this Lease
or the breach thereof or the Equipment,  including,  without limitation, any and
at   Liabilities.   LESSEE   UNDERSTANDS   AND  AGREES  THAT  LESSOR   MAKES  NO
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED,  WITH RESPECT TO THE
CONDITION OF THE EQUIPMENT,  ITS  MERCHANTABILITY,  THE FITNESS OF THE EQUIPMENT
FOR A PARTICULAR  PURPOSE,  OR WITH RESPECT TO PATENT  INFRINGEMENT OR THE LIKE.
THIS  PARAGRAPH  SHALL  SURVIVE  THE  TERMINATION  OF THIS  LEASE AND MAY NOT BE
MODIFIED,  AMENDED  DISCHARGED  OR  TERMINATED  BY ANY  WRITING  OR ANY  ACTION,
INACTION CONDUCT OR PAST DEALINGS OF THE PARTIES HERETO.

      10.  Lessee  warrants  to  Lessor  that (a) this  Lease  has been duly and
validly executed and delivered by Lessee and constitutes and will constitute the
valid and  binding  obligation  of  Lessee,  and is and will be  enforceable  in
accordance with its terms;  (b) the execution,  delivery and performance of this
Lease by Lessee will not violate any law or other  governmental  requirement or,
if Lessee is a corporation,  Lessee's corporate charter or by-laws;  nor will it
constitute a default under any agreement, instrument or document to which Lessee
is now or hereafter a party or by which Lessee is now or will hereafter be bound
(c) all financial statements and information which have been or may hereafter be
submitted to Lessor relating to Lessee or any guarantor of Lessee's  obligations
hereunder  ("Guarantor")  have been and will be  complete,  true and correct and
have been and will be prepared in accordance with generally accepted  accounting
principles;  Lessee  agrees to deliver to Lessor at any time or times  hereafter
such  documents  as  Lessor  may  reasonably  request  to  demonstrate  Lessee's
compliance with this Lease.

      11. So long as Lessee  shall not be in default and fully  performs  all of
its  obligations  hereunder,  Lessor will not  interfere  with the quiet use and
enjoyment of the Equipment by Lessee.

                               Member HSBC Group

                                       4
<PAGE>

      12. Lessee hereby  consents to any  assignment or encumbrance by Lessor of
this Lease or all or any part of the rentals  hereunder  or the rights of Lessor
in the  Equipment,  with or  without  notice.  Lessee  agrees  that  the  rights
hereunder  of any  assignee or  creditor  of Lessor  shall not be subject to any
defense,  setoff or  counterclaim  that Lessee may have against the Lessor,  and
(that any such assignee or creditor shall have all of Lessor's rights hereunder,
but none of Lessor's  obligations  hereunder  or any claim which Lessee may have
against  Lessor.  The rights of Lessee  hereunder are subject and subordinate to
any security interest granted by Lessor in the Equipment.

      13. Upon the expiration or earlier  termination of this Lease with respect
to any Equipment,  Lessee shall return such Equipment to Lessor in the condition
required  by this Lease.  Lessee  shall make such  return,  at its  expense,  by
causing such Equipment to be assembled,  crated and loaded on board such carrier
as Lessor shall specify and shipping the same, freight and insurance prepaid, to
the  destination  specified  by Lessor.  Lessee shall pay to Lessor on demand as
additional rental hereunder, the cost of any repairs necessary to then place the
Equipment in the  condition  required by the Lease.  If Lessor shall so require,
Lessee will  provide free storage and  insurance  for any  Equipment at Lessee's
location for a period not exceeding  sixty (60) days from date of expiration as'
earlier  termination  of this Lease.  If, for whatever  reason,  Lessee fails to
return the Equipment or set forth herein, Lessee agrees to pay, at Lessor's sole
option,  rental  installments  to  Lessor  in the  same  amount  as  hereinabove
provided, until so returned.

      14. As used  herein  the term  "Event of Loss"  shall  mean the  actual or
constructive loss of the Equipment,  by damage,  theft, or otherwise,  including
any failure to return the Equipment to Lessor upon the expiration or termination
of this Lease,  unless Lessee shall have purchased the Equipment or renewed this
Lease,  pursuant to the terms of any  purchase or renewal  option to this Lease.
Upon the  occurrence of an Event of Loss,  Lessee shall notify Lessor in writing
of such  occurrence and pay to Lessor within 30 days of the date of the Event of
Loss, the Casualty Value. As used herein the term "Casualty  Value" shall mean':
(a) the sum of any  and all  amounts  then  due and  owing  hereunder  including
without  limitation,  accrued  but  unpaid  rent  (collectively,   the  "Accrued
Amounts") and the  Stipulated  Loss Value or, if none (b) the sum of the Accrued
Amounts and the aggregate of all future rentals  reserved  herein and discounted
to present  value at a rate equal to the Federal  Reserve  Discount Rate for the
Federal Reserve Bank of New York then in effect (the "Discount Rate"),  plus the
purchase  option/agreement  or estimated residual amount stated herein or in any
purchase  option,  purchase  agreement  or  terminal  rental  adjustment  clause
applicable to the Equipment, also discounted at the Discount Rate.

      15. Each of the following shall constitute a default under this Lease: (a)
the breach by Lessee of its  obligations to pay rent when due and the failure to
cure said  breach  within ten (10) days,  (b) the breach by Lessee of any of the
other terms hereof,  (c) if Lessee or any Guarantor dies or becomes insolvent or
ceases to do business as a going concern,  (d) if Lessee or any Guarantor  makes
an assignment  for the benefit of creditors,  (e) if a petition in bankruptcy or
for  arrangement  or  reorganization  is  filed  by or  against  Lessee  or  any
Guarantor,  (f) if property of Lessee or any Guarantor is attached or a receiver
is  appointed  for Lessee or any  Guarantor,  or any of Lessee's or  Guarantor's
property,  (g) the  occurrence  of a default  pursuant to the  provisions of any
other  agreement  by and  between  Lessor  or  HSSC  Bank  USA  ("Bank")  or any
subsidiary or affiliate thereof and Lessee or any Guarantor,  (h) the occurrence
of a  default  (with any  applicable  cure  period  having  expired),  under any
material  agreement for the payment of

                               Member HSBC Group

                                       5
<PAGE>

money to which Lessee or any  Guarantor is a party,  (i) if false or  misleading
representations  or warranties are made or given either  heretofore or hereafter
in connection  with this Lease or the  extension of credit  hereunder by Lessor,
(j) if a material  adverse  change in Lessor's  or any  Guarantor  financial  or
business  condition  occurs,  or (k) if there occurs any sale or disposition of:
(i) the principal  business  assets of Lessee or any Guarantor if Lessee or such
Guarantor is a sole proprietorship, (ii) a controlling interest in Lessee or any
Guarantor if Lessee or such Guarantor is a  corporation,  partnership or similar
entity  or  (iii)  all or  substantially  all of the  assets  of  Lessee  or any
Guarantor.

      16. In the event of any  default  under this  Lease,  Lessor  may,  at its
option,  do one or more of the following:  (a) terminate this Lease and Lessee's
rights hereunder, (b) proceed by appropriate court action to enforce performance
of the terms of this Lease and/or recover damages for the breach hereof;  (C) by
notice in writing,  cause Lessee,  at Lessee's  expense,  promptly to return the
Equipment to the  possession of the Lessor in accordance  with the terms hereof,
or Lessor  directly or by its agent,  and without  notice or  liability or legal
process,  may enter upon any  premises  where any  Equipment  is  located,  take
possession  of such  Equipment,  and either  store it on said  premises  without
charge or remove the same (any damages  occasioned by such taking of possession,
storage or removal  being waived by Lessee);  and/or (d) declare as  immediately
due and payable and forthwith recover from Lessee, as liquidated damages and not
as a penalty,  an amount equal to the Casualty Value with interest  thereon at a
per  annum  rate of  eighteen  percent  (18%)  from and after the date of demand
therefor.

      In the event of any  repossession  of any Equipment by Lessor,  Lessor may
(but need not),  without  notice to Lessee,  (A) hold or use all or part of such
Equipment for any purpose whatsoever,  (B) sell all or part of such Equipment at
public or  private  sale for cash or on credit  and/or  (C) relet all or part of
such  Equipment  upon such terms as Lessor may  solely  determine,  in each case
without any duty to account to Lessee except as herein expressly provided. After
any repossession of Equipment by Lessor there shall be applied on account of the
obligations of Lessee hereunder the net proceeds  actually by Lessor from a sale
or lease of such  Equipment,  after  deduction of all expenses of sale and other
expenses recoverable by Lessor hereunder. No termination,  repossession or other
act by Lessor after  default shall  relieve  Lessee from any of its  obligations
hereunder.  In  addition to all other  charges  hereunder,  Lessee  shall pay to
Lessor on demand all fees, costs and expenses  incurred by Lessor as a result of
such default, including without limitation,  reasonable attorneys',  appraisers'
and brokers'  fees and expenses and costs of removal,  storage,  transportation,
insurance  and  disposition  of the  Equipment.  In the event  that any court of
competent jurisdiction  determines that any provision of this Section is invalid
or  unenforceable  in whole or in part,  such  determination  shall not prohibit
Lessor from establishing its damages sustained as a result of any breach of this
Lease in any  action  or  proceedings  in which  Lessor  seeks to  recover  such
damages.  To the extent  permitted  by law,  Lessee  hereby  waives any right of
setoff or  counterclaim  in any action between  Lessor and Lessee.  The remedies
provided  herein  in  favor of  Lessor  shall  not be  exclusive,  but  shall be
cumulative and in addition to all other  remedies  existing at law or in equity,
any one or more of which may be exercised simultaneously or successively.

      As additional  collateral  security for the payment and performance of its
obligations  hereunder,  and under any other agreement by and between Lessor and
Lesser,  Lessee hereby creates and grants in f of Lessor a security  interest in
any and all  equipment,  fixtures,  goods,

                               Member HSBC Group

                                       6
<PAGE>

inventory, documents, instruments,  accounts, chattel paper, general intangibles
or other personal property or fixtures in which Lessor or Bank or any subsidiary
or affiliate thereof now has or may hereafter have a security interest.

      17.  If  Lessee  shall  fail to make any  payment  or  perform  any act or
obligation  required of Lessee hereunder,  Lessor may (but need not) at any time
thereafter make such payment or perform such act or obligation at the expense of
Lessee.  Any payment so made or expense so incurred by Lessor  shall  constitute
additional  rental  hereunder  payable  by  Lessee to Lessor  upon  demand,  The
performance of any act or payment of any monies by Lessor,  as aforesaid,  shall
not be deemed a waiver or  release of any  obligation  or default on the part of
Lessee.

      18.  Lessee shall  furnish to Lessor within 120 days after the end of each
fiscal year of Lessee  during the term hereof a statement of profit and loss and
of surplus of Lessee for such fiscal  year-end and a balance  sheet of Lessee as
at the end of such year, all in accordance  with generally  accepted  accounting
principles  and in  reasonable  detail  and  certified  by a  reputable  firm of
independent  public  accountants.  Lessee  shall  furnish  to Lessor  such other
information  about the  condition  and affairs of Lessee and any  Guarantor  and
about the Equipment as Lessor may from time to time reasonably request.

      19. Lessee shall give Lessor  immediate  notice of any default  hereunder,
any material  adverse  change in financial  condition or operations of Lessee or
any Guarantor, or any loss, material damage or accident affecting the Equipment.
All  notices  under  this  Lease  shall be in  writing  and sent to the  address
hereinabove,  or as the parties may  designate.  None of the  provisions of this
Lease shall be held to have been waived by any act or knowledge  of Lessor,  but
only by a written instrument  executed by Lessor and delivered to Lessee. If any
provision of this Lease or the application  thereof is hereafter held invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and to
this end the provisions of this Lease are declared severable.

      20. The parties hereto intend to comply with any and all applicable  usury
laws now in effect or hereafter  enacted;  if any interest rate inherent in this
Lease would  violate any such  statute or  regulation  applicable  thereto,  the
rate(s)  shall be  deemed  automatically  amended  to the  highest  lawful  rate
allowed.

      21.  Subject to the terms  hereof,  this Lease  shall be binding  upon and
inure  the  benefit  of  Lessor  and  Lessee  and  their   respective   personal
representatives,  successors  and  assigns.  This Lease shall be  construed  and
enforced in accordance with, and governed by, the laws of the State of New York,
without regard to principles of conflicts of laws. LESSEE AGREES THAT LESSOR MAY
BRING ANY ACTION OR PROCEEDING TO ENFORCE THIS LEASE OR RELATED DOCUMENTS IN ANY
SUPREME  COURT  OF THE  STATE OF NEW YORK OR ANY  DISTRICT  COURT OF THE  UNITED
STATES  LOCATED WITHIN THE STATE OF NEW YORK, AND AGREES THAT SERVICE OF PROCESS
BY CERTIFIED  MAIL,  RETURN  RECEIPT  REQUESTED,  SHALL BE  SUFFICIENT TO CONFER
PERSONAL  JURISDICTION.  LESSEE AND LESSOR WAIVE THEIR RIGHT TO TRIAL BY JURY IN
CONNECTION WITH ANY ACTION OR PROCEEDING TO ENFORCE OR ARISING OUT OF THIS LEASE
OR RELATED  DOCUMENTS.  This Lease is  submitted  to Lessor  for  acceptance  or
rejection and will not

                               Member HSBC Group

                                       7
<PAGE>

become  effective  until accepted by Lessor in writing at its principal  office.
This  Lease is  irrevocable  by  Lessee  for the full  term  hereof  and for the
aggregate rentals herein reserved.

                               Member HSBC Group

                                       8
<PAGE>

LESSEE'S INITIAL     DG

LESSOR:                                    LESSEE:

HSBC Business Credit (USA) Inc.            Coffee Holding Co.,  Inc.
One HSBC Center, 29th Floor,               4401 First Avenue, Brooklyn, NY 11232
Buffalo, NY 14203

By: /s/ J.B. Koblas III                    By: /s/ David Gordon
    -------------------                        ----------------

      J. B. Koblas III - VP                        David Gordon, V.P.
-----------------------------------        -------------------------------------
  (Print or Type: Name and Title)             (Print or Type: Name and Title)

Date: July 19, 2002                        Date: July 19, 2002

                               Member HSBC Group

                                       9
<PAGE>

--------------------------------------------------------------------------------
HSBC Business Credit (USA) Inc.                             $1.00 PURCHASE RIDER
--------------------------------------------------------------------------------

         This  Rider  is  attached  to and  forms a part of that  certain  Lease
Agreement  dated July 19, 2002 (such Lease Agreement being referred to herein as
the "Lease" by and between HSBC Business Credit (USA) Inc. ("Lessor") and Coffee
Holding Co., Inc. ("Lessee").

      1.  Immediately  upon payment by Lessee of all of the  installments now or
hereafter coming due, and performance by Lessee of all other obligations,  under
the Lease, and notwithstanding any other provision in the Lease to the contrary,
Lessee  shall  purchase  from  Lessor  all the  equipment  covered  by the Lease
("Equipment")  (for the sum of $1.00,  plus all applicable sales and other taxes
("Purchase Price").

      2. Upon final and irrevocable  payment of the Purchase Price, Lessor shall
execute and deliver to Lessee a Bill of Sale conveying all Lessor's right, title
and interest to the Equipment,  WITHOUT  REPRESENTATION OR WARRANTY OF ANY KIND,
EXPRESS OR IMPLIED, ON AN "AS IS, WHERE IS" BASIS, WITH ALL FAULTS.

HSBC Business Credit (USA) Inc.            Coffee Holding Co.,  Inc.

By: /s/ J.B. Koblas III                    By: /s/ David Gordon
    -------------------                        ----------------

      J.B. Koblas III - V.P.                        David Gordon, V.P.
-----------------------------------        -------------------------------------
  (Print or Type: Name and Title)             (Print or Type: Name and Title)

Date: July 19, 2002                        Date: June 28, 2002

                               Member HSBC Group

                                       10
<PAGE>

--------------------------------------------------------------------------------
HSBC Business Credit (USA) Inc.                                     PAY PROCEEDS
--------------------------------------------------------------------------------

TO: HSBC Business Credit (USA) Inc.        Date: July 19, 2002
    One HSBC Center-29th Floor
    Buffalo, NY 14203

         Reference is hereby  directed toward that certain LEASE AGREEMENT dated
2002 for and in  consideration of which your company has agreed to advance funds
in the amount of $383,763.60.  Accordingly,  the undersigned  hereby irrevocably
authorizes your company to disburse said amount as follows:

Pay to: ICA S.P.A.                         $34,274.00

Pay to: Coffee Holding Co., Inc.           $349,489.60

                                           Very Truly yours,
                                           Coffee Holding Co., Inc.
                                           (name of Lessee)

                                           By: /s/ David Gordon
                                               ---------------------------------

                                           Title: V.P.

                               Member HSBC Group

                                       11
<PAGE>

--------------------------------------------------------------------------------
HSBC Business Credit (USA) Inc.                           CORPORATE RESOLUTION
                                                          INCUMBENCY CERTIFICATE
                                                          (LEASE)
--------------------------------------------------------------------------------

      I KAREN GORDON, DO HEREBY CERTIFY THAT:

      I am the duly  elected,  qualified  and acting  (Assistant)  Secretary  of
Coffee Holding Co. Inc. (the "Corporation").

      The following resolutions were adopted by the corporation either at a duly
called meeting,  or by unanimous  written consent,  of the Board of Directors of
the Corporation, such meeting having been held on or such consent being dated as
of 1 July 2002.

      RESOLVED,  that the  Corporation  be, and hereby is,  authorized  to lease
equipment,  goods or materials from time to time (the "Leased  Equipment")  from
HSBC Business Credit (USA) Inc., One HSBC Center, 29th Floor,  Buffalo, NY 14203
or any assignee or successor thereof (collectively,  "Lessor"),  upon such terms
as the  Corporation  may from time to time require,  and that any and all of the
officers  of the  Corporation  be, and hereby are,  authorized  on behalf of the
Corporation to execute, acknowledge and deliver to Lessor one or more lessees on
such terms as the officer or officers  executing such documents on behalf of the
Corporation  may  approve,  such  approval to be  conclusively  evidenced by the
execution thereof; and

      RESOLVED FURTHER,  that, if Lessor should require, the Corporation be, and
hereby is, authorized to pledge,  mortgage or grant security  interests in, from
time to time, any or all of the Corporation's  assets,  whether real,  personal,
intangible,  or a combination  thereof, to secure the Corporation's  obligations
under any such leases,  and that any and all officers of the Corporation be, and
hereby are, authorized on behalf of the Corporation to execute,  acknowledge and
deliver  to Lessor any  security  documents  upon such  terms as the  officer or
officers  executing  such security  documents on behalf of the  Corporation  may
approve, such approval to be conclusively evidenced by the execution thereof;

      RESOLVED  FURTHER,  that any and all officers of the  Corporation  be, and
hereby are,  authorized and directed to do or cause to be done all such acts and
things as may be necessary,  advisable, convenient and proper in connection with
the  execution  and  delivery  of  leases  authorized  at  this  meeting  and in
connection  with  or  incidental  to  the   consummation  of  the   transactions
contemplated  thereby,  including  the  execution  and  delivery  of any and all
instruments  or agreements as may be required by Lessor in connection  with such
leases and security documents; and

      RESOLVED FURTHER,  that Lessor may rely on these resolutions until written
notice of any modification,  rescission or revocation of same shall, in whole or
in part, has been delivered to Lessor, but no such  modification,  rescission or
revocation  shall,  in any event,  be effective  with  respect to any  documents
executed or actions taken in reliance upon the foregoing  authority prior to the
delivery  to  Lessor  of such  written  notice of  modification,  rescission  or
revocation.

                               Member HSBC Group

                                       12
<PAGE>

      I CERTIFY THAT the Corporation is a corporation  duly organized,  existing
and in good standing under the laws of the state of its incorporation.

      I DO FURTHER  CERTIFY THAT the above  resolutions  have not been  altered,
amended, repealed or rescinded.

      I DO FURTHER CERTIFY THAT on this date the persons whose names, titles and
signatures  are listed  below are duly  elected (or  appointed).  qualified  and
acting  officers of the  Corporation  and hold the offices  set  opposite  their
respective names, that the signatures  appearing opposite their respective names
arc the genuine signatures of such officers,  that each of such officers is duly
authorized  for and on behalf of the  Corporation  to execute and deliver any of
the documents contemplated by the foregoing resolutions for and on behalf of the
Corporation and is not prohibited by or in any manner restricted by the terms of
the  Corporation's  Certificate  of  Incorporation  its By-Laws,  or of any loan
agreement,  indenture or contract to which the  Corporation  is a party or under
which it is bound, nor is the Corporation prohibited or restricted in connection
therewith by the ruling of any  governmental  authority or court. I also certify
that the  foregoing  authority  shall  remain in full  force and effect and that
Lessor  shall be  entitled  to rely  upon  same,  until  written  notice  of the
modification,  rescission or  revocation  of same in whole or in part,  has been
delivered to Lessor, but no such  modification,  rescission or revocation shall,
in any event,  be effective  with respect to any  documents  executed or actions
taken in reliance upon the foregoing  authority  prior to the delivery to Lessor
of such written notice of modification, rescission or revocation.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Name of Officer                Title of Officer             Signature of Officer
--------------------------------------------------------------------------------
Andrew Gordon                  Pres & CEO                   /s/ Andrew Gordon
--------------------------------------------------------------------------------
David Gordon                   V. Pres                      /s/ David Gordon
--------------------------------------------------------------------------------

      IN WITNESS WHREOF, I have hereunto set my hand and affixed the seal of the
Corporation this 28th day of June 2002.

                                       /s/ Karen Gordon
                                       -----------------------------------------

                                       Karen Gordon
                                       -----------------------------------------
                                       (Type or Print Name)  Assistant Secretary

                               Member HSBC Group

                                       13

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