SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

Exhibit 10.1

SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

This Sixth Amendment to Loan and Security Agreement (this “Sixth Amendment”) made and entered into as of the 4th day of August, 2005, is by and among LASALLE BANK NATIONAL ASSOCIATION, a national banking association (“LENDER”), having its principal place of business at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000, and VITA FOOD PRODUCTS, INC., a Nevada corporation, with its chief executive office located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (“Vita Food”), VIRGINIA HONEY COMPANY, INC., a Virginia corporation, with its chief executive office located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (“Virginia Honey”), THE HALIFAX GROUP, INC., a Georgia corporation, with its chief executive office located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 (“Halifax”), and VITA SPECIALTY FOODS, INC., a Delaware corporation, with its chief executive office located at 0000 Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000  (“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, that certain Second Amendment to Loan and Security Agreement dated as of December 21, 2004, that certain Third Amendment to Loan and Security Agreement dated as of January 31, 2005, that certain Fourth Amendment to Loan and Security Agreement dated as of April 4, 2005, and that certain Fifth Amendment to Loan and Security Agreement dated as of  June 30, 2005, each by and among 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, (i) temporarily increase the maximum principal amount of the Revolving Loans from $8,500,000 to $9,500,000, (ii) temporarily increase the amount of the Overadvance from $800,000 to $1,750,000, and (iii) temporarily increase the inventory cap from $4,250,000 to $5,000,000 (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 Sixth 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 Sixth Amendment.

I. Definitions.

A. Use of Defined Terms.  Except as expressly set forth in this Sixth 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 Sixth Amendment, Section 1.1 of the Loan Agreement is hereby amended by deleting the definitions of “Borrowing Base”, “Maximum Revolving Loan”, “Overadvance” and “Revolving Note” and substituting therefor the following, respectively:

“Borrowing Base”:  shall mean the total, without duplication, of the following:

(1) eighty percent (80%) of the face amount of all then existing Eligible Accounts as set forth on the Borrowing Base Certificate delivered by Borrowers to Lender from time to time, minus all finance charges and prompt payment, volume and all other discounts, credits or allowances which may be taken by or granted to Account Debtors,

(2) plus, without duplication, the lesser of (a) the sum of (I) sixty percent (60%) of the Value of all then existing Eligible Inventory consisting of raw materials and packaged goods, (II) twenty-five percent (25%) of the Value of all then existing Eligible Inventory consisting of packaging inventory, and (III) fifty percent (50%) of the Value of In-Transit Inventory; or (b) $5,000,000.00 from August 4, 2005, through December 30, 2005, and $4,500,000.00 from December 31, 2005, and at all times thereafter,

(3) plus the Overadvance,

(4) less all Letter of Credit Obligations.

“Maximum Revolving Loan”: shall mean (1) from August 4, 2005, through August 30, 2005, an amount equal to Nine Million Five Hundred Thousand and no/100 Dollars ($9,500,000.00), and (2) from August 31, 2005, and at all times thereafter, an amount equal to Nine Million and no/100 Dollars ($9,000,000.00).

“Overadvance”: shall mean an amount equal to (1) One Million Seven Hundred Fifty Thousand and no/100 Dollars ($1,750,000.00) from August 4, 2005, through August 30, 2005, and (2) zero Dollars ($0) from August 31, 2005, and at all times thereafter.

“Revolving Note”: shall mean that certain Revolving Note dated as of August 4, 2005, executed and delivered by Borrowers to Lender in a maximum aggregate principal amount not to exceed $9,500,000.00, as amended, renewed, restated or replaced from time to time.

II. Conditions Precedent. Lender’s obligation to provide the Additional Financial Accommodations to Borrowers is subject to the full and timely performance of the following

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covenants prior to or contemporaneously with the execution of this Sixth 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 Revolving Note of even date herewith executed by the Borrowers to Lender;

(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 Sixth 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.

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

IV. Severability.  Wherever possible, each provision of this Sixth Amendment shall be interpreted in such manner as to be valid and enforceable under applicable law, but if any provision of this Sixth 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 Sixth 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 shall be deemed to be modified so as to be valid and enforceable to the maximum extent permitted by law.

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

VI. 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 Sixth Amendment and the other agreements, documents and instruments executed and delivered in connection herewith or pursuant hereto.

VII. Choice of Law.  This Sixth 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.

VIII. 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.

IX. 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 Sixth 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/ K. Xxxxxx Xxxxx, Xx.			By:	/s/ Xxxxxxx X. Xxxxx
Name:	K. Xxxxxx Xxxxx, Xx.			Name:	Xxxxxxx X. Xxxxx
Title:	Assistant Vice President			Title:	President
				VIRGINIA HONEY COMPANY, INC.,
				a Virginia corporation
				By:	/s/ Xxxxxxxx Xxxxx
				Name:	Xxxxxxxx Xxxxx
				Title:	Assistant Secretary
				THE HALIFAX GROUP, INC.,
				a Georgia corporation
				By:	/s/ Xxxxxxxx Xxxxx
				Name:	Xxxxxxxx Xxxxx
				Title:	Treasurer & Secretary
				VITA SPECIALTY FOODS, INC.,
				a Delaware corporation
				By:	/s/ Xxxxxxxx Xxxxx
				Name:	Xxxxxxxx Xxxxx
				Title:	Assistant Secretary

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