EXHIBIT 10.6

 

FIFTH AMENDMENT TO
REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

THIS FIFTH AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT dated as of
April 8, 2004 (this “Amendment”), is entered into by and between CAPITALSOURCE
FINANCE LLC, a Delaware limited liability company, in its capacity as
administrative agent and collateral agent for the Lenders under the Agreement
referenced below (“Agent”), the Lenders party thereto, and GARDENBURGER, INC.,
an Oregon corporation (“Borrower”).  Capitalized terms used and not otherwise
defined herein are used as defined in the Agreement (as defined below).

 

WHEREAS, the Agent, Lenders and Borrower have entered into that certain
Revolving Credit and Term Loan Agreement dated as of January 10, 2002 (as
amended, supplemented, modified and/or restated from time to time, the
“Agreement”), together with a First Amendment to the Agreement dated as of
September 30, 2002, a Second Amendment to the Agreement dated as of December 31,
2002, a Third Amendment to the Agreement dated as of March 31, 2003, and a
Fourth Amendment to the Agreement dated as of December 29, 2003;

 

WHEREAS, Borrower has requested that Agent and Lenders amend certain provisions
of the Agreement as provided herein; and

 

WHEREAS, subject to satisfaction of the conditions set forth herein, Agent and
the Lenders are willing to amend the Agreement as provided herein;

 

NOW, THEREFORE, in consideration of the premises and the other mutual covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:

 

SECTION 1.                              Amendments.  As of the Effective Date,
the Agreement is amended as follows:

 

(a)                                  A new Section 6.14 of the Agreement shall
be added to the Agreement to read in full as follows:

 

“6.14                  Financing of Insurance Premiums

 

In the event that Borrower has entered into any one or more Premium Finance
Agreements (as defined in Section 7.2 hereof), Borrower shall (a) make best
efforts to ensure that (i) the applicable Premium Finance Lender (as defined in
Section 7.2 hereof) is required to provide Agent with at least the same advance
notice (within the same time period) as is required to be provided to Borrower,
prior to effecting the cancellation of any of Borrower’s insurance policies or
Premium Finance Agreements (and such notice shall specify the nature of any
Premium Finance Default (as defined below) and all actions necessary to avoid
such cancellation and cure such Premium Finance Default), (ii) Agent has the
right (but not the obligation) to cure (and such Premium Finance Lender agrees
to accept payment in furtherance of such cure from Agent) any nonpayment or any
other default or event of default under such Premium Finance Agreement (any of
the foregoing, a “Premium Finance Default”), (iii) the applicable Premium
Finance Lender is required to provide Agent with at least the same advance
notice (within the same time period) as is required to be provided to Borrower
of any assignment by such Premium Finance Lender of its rights and/or
obligations under the Premium Finance Agreement to any other Person (and no such
assignment shall be permitted unless such assignee agrees to be subject to the
provisions of the Premium Finance Agreement, including without limitation the
provisions set forth in this Section 6.14); and (iv) Agent has third party
beneficiary rights under the Premium Finance Agreement; (b) inform Agent in
writing, no later than twenty-four (24) hours after Borrower’s receipt of notice
of a Premium Finance Default; and (c) promptly provide Agent with a true and
accurate, fully executed copy of each such Premium Finance Agreement (and any
amendments thereto, on an ongoing basis).  Notwithstanding any of the foregoing,
however, none of this Section 6.14 (other than Section 6.14(b) and (c)) shall
apply to any Premium Finance Agreement which applies solely to directors’ &
officers’ insurance. ”

 

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(b)                                 Section 7.2 of the Agreement shall be and
hereby is amended to include a new subclause (f) and as such is amended and
restated and replaced in its entirety to read in full as follows:

 

“7.2     INDEBTEDNESS

 

Borrower shall not create, incur, assume or suffer to exist any Indebtedness,
except the following (collectively, “Permitted Indebtedness”): (a) Indebtedness
under the Loan Documents, (b) any Indebtedness set forth on Schedule 7.2; (c)
Capitalized Lease Obligations incurred after the Closing Date and Indebtedness
incurred pursuant to purchase money Liens permitted by Section 7.3(e); provided,
that the aggregate amount thereof outstanding at any time shall not exceed
$100,000, (d) accounts payable to trade creditors and current accrued operating
expenses (other than for borrowed money) which are not aged more than 120
calendar days from the billing date or more than 30 days from the due date, in
each case incurred in the ordinary course of business and paid within such time
period, unless the same are being contested in good faith and by appropriate and
lawful proceedings and such reserves, if any, with respect thereto as are
required by GAAP and deemed adequate by Borrower’s independent accountants shall
have been reserved; (e) borrowings incurred in the ordinary course of business
and not exceeding $50,000 individually or in the aggregate outstanding at any
one time; provided, however, that the Indebtedness described in (e) above shall
be on an unsecured basis, subordinated in right of repayment and remedies to all
of the Obligations and to all of Agent’s and Lenders’ rights, Liens and remedies
and in form and substance satisfactory to Agent; and (f) any Indebtedness owing
to any premium finance company (each, a “Premium Finance Lender”) pursuant to
any agreement or arrangement (each, a “Premium Finance Agreement”) between any
such entity and Borrower which provides for the financing of Borrower’s
insurance premiums; provided, however, that (X) the Indebtedness described in
(f) above, if secured by a Lien, shall be otherwise permitted under
Section 7.3(i) below, (Y) the Indebtedness shall otherwise be in accordance with
Section 6.14 hereof, and (Z) such Indebtedness shall not at any time exceed
$700,000.00 in the aggregate.  Borrower shall not make prepayments on any
existing or future Indebtedness to any Person other than to Agent, for the
benefit of Lenders, or to the extent specifically permitted by this Agreement or
any subsequent agreement between Borrower, Agent and Lenders.  ”

 

(c)                                  Section 7.3 of the Agreement shall be and
hereby is amended to include a new subclause (i) and as such is amended and
restated and replaced in its entirety to read in full as follows:

 

“7.3     LIENS

 

Borrower shall not create, incur, assume or suffer to exist any Lien upon, in or
against, or pledge of, any of the Collateral or any of its properties or assets
or any of its shares, securities or other equity or ownership or partnership
interests, whether now owned or hereafter acquired, except the following
(collectively, “Permitted Liens”): (a) Liens under the Loan Documents or
otherwise arising in favor of Agent, for the benefit of itself and Lenders,
(b) Liens imposed by law for taxes, assessments or charges of any Governmental
Authority for claims not yet due or which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained by such Person in accordance with
GAAP to the satisfaction of Agent in its Permitted Discretion, (c) (i) statutory
Liens of landlords (provided that any such landlord has executed a Landlord
Waiver and Consent in form and substance satisfactory to Agent) and of carriers,
warehousemen, mechanics, materialmen, and (ii) other Liens imposed by law or
that arise by operation of law in the ordinary course of business from the date
of creation thereof, in each case only for amounts not yet due or which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained by
such Person in accordance with GAAP to the satisfaction of Agent in its
Permitted Discretion, (d) Liens incurred or deposits made in the ordinary course
of business (including, without limitation, surety bonds

 

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and appeal bonds) in connection with workers’ compensation, unemployment
insurance and other types of social security benefits or to secure the
performance of tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), statutory obligations and other similar obligations, (e) purchase
money Liens securing Indebtedness permitted under Section 7.2(c), (f) Liens
necessary and desirable for the operation of such Person’s business; provided,
that Agent has consented to such Liens in writing before their creation and
existence and the priority of such Liens and the debt secured thereby are both
subject and subordinate in all respects to the Liens securing the Collateral and
to the Obligations and all of the rights and remedies of Agent and each Lender,
all in form and substance satisfactory to Agent in its sole discretion; (g)
Liens shown on the title policy or survey covering the Leasehold Property and
approved by Agent in its sole discretion; (h) Liens disclosed on Schedule 7.3;
and (i) Liens securing Indebtedness permitted under Section 7.2(f) shall be
limited to the extent of any unearned premiums and loss payments which will
reduce the unearned premiums on such policies. ”

 

(d)                                 The following definitions are hereby added
to Appendix A to the Agreement in alphabetical order:

 

“Premium Finance Agreement” shall have the meaning set forth in Section 7.2(f)
hereof.

 

“Premium Finance Default” shall have the meaning set forth in Section 6.14
hereof.

 

“Premium Finance Lender” shall have the meaning set forth in Section 7.2(f)
hereof.

 

SECTION 2.                              Conditions.  This Amendment shall be
effective upon the satisfaction of the following conditions precedent (the
“Effective Date”):  (a) the representations and warranties contained herein and
in all other Loan Documents shall be true and correct in all material respects
as of the date hereof, except for such representations and warranties limited by
their terms to a specific date; (b) no Default or Event of Default shall be in
existence as of the date hereof; (c) Borrower shall have delivered to the Agent
an executed original copy of this Amendment and each other agreement, document
or instrument reasonably requested by the Agent in connection with this
Amendment; (d) Borrower shall have delivered to Agent a certificate of the
corporate secretary or assistant secretary of Borrower dated as of the date of
this Amendment, as to the incumbency and signature of the Persons executing this
Amendment on behalf of Borrower, in form and substance acceptable to Agent; and
(e) all proceedings taken in connection with the transactions contemplated by
this Amendment and all documentation and other legal matters incident thereto
shall be satisfactory to the Agent.

 

SECTION 3.                              Agreement in Full Force and Effect as
Amended.  Except as specifically amended hereby, the Agreement and other Loan
Documents shall remain in full force and effect and are hereby ratified and
confirmed as so amended.  Except as expressly set forth herein, this Amendment
shall not be deemed to be a waiver, amendment or modification of any provisions
of the Agreement or any other Loan Document or any right, power or remedy of
Agent or Lenders, or constitute a waiver of any provision of the Agreement or
any other Loan Document, or any other document, instrument and/or agreement
executed or delivered in connection therewith or of any Default or Event of
Default under any of the foregoing, in each case whether arising before or after
the date hereof or as a result of performance hereunder or thereunder.  This
Amendment also shall not preclude the future exercise of any right, remedy,
power, or privilege available to Agent and/or Lenders whether under the
Agreement, the other Loan Documents, at law or otherwise.  All references to the
Agreement shall be deemed to mean the Agreement as modified hereby.  This
Amendment shall not constitute a novation or satisfaction and accord of the
Agreement and/or other Loan Documents, but shall constitute an amendment
thereof.  The parties hereto agree to be bound by the terms and conditions of
the Agreement and Loan Documents as amended by this Amendment, as though such
terms and conditions were set forth herein.  Each reference in the Agreement to
“this Agreement,” “hereunder,” “hereof,” “herein” or words of similar import
shall mean and be a reference to the Agreement as amended by this Amendment, and
each reference herein or in any other Loan Documents to the “Loan Agreement” or
“Credit Agreement” shall mean and be a reference to the Agreement as amended and
modified by this Amendment.

 

SECTION 4.                              Representations.  Borrower hereby
represents and warrants to Agent and Lenders as follows:  (i) it is duly
incorporated or organized, validly existing and in good standing under the laws
of its

 

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jurisdiction of organization; (ii) the execution, delivery and performance by it
of this Amendment and all other Loan Documents executed and/or delivered in
connection herewith are within its powers, have been duly authorized, and do not
contravene (A) its articles of organization, operating agreement, or other
organizational documents, or (B) any applicable law; (iii) no consent, license,
permit, approval or authorization of, or registration, filing or declaration
with any Governmental Authority or other Person, is required in connection with
the execution, delivery, performance, validity or enforceability of this
Amendment or any other Loan Documents executed and/or delivered in connection
herewith by or against it; (iv) this Amendment and all other Loan Documents
executed and/or delivered in connection herewith has been duly executed and
delivered by it; (v) this Amendment and all other Loan Documents executed and/or
delivered in connection herewith constitute its legal, valid and binding
obligation enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by general principles of equity; (vi) after
giving effect to this Amendment, it is not in default under the Loan Documents
and no Default or Event of Default exists, has occurred and is continuing or
would result by the execution, delivery or performance of this Amendment; and
(vii) the representations and warranties contained in the Loan Documents are
true and correct in all material respects as of the date hereof as if made on
the date hereof, except for such representations and warranties limited by their
terms to a specific date.

 

SECTION 5.                              Miscellaneous.

 

(a)                                  This Amendment may be executed in any
number of counterparts (including by facsimile), and by the different parties
hereto on the same or separate counterparts, each of which shall be deemed to be
an original instrument but all of which together shall constitute one and the
same agreement.  Each party agrees that it will be bound by its own facsimile
signature and that it accepts the facsimile signature of each other party.  The
descriptive headings of the various sections of this Amendment are inserted for
convenience of reference only and shall not be deemed to affect the meaning or
construction of any of the provisions hereof or thereof.  Whenever the context
and construction so require, all words herein in the singular number herein
shall be deemed to have been used in the plural, and vice versa, and the
masculine gender shall include the feminine and neuter and the neuter shall
include the masculine and feminine.

 

(b)                                 This Amendment may not be changed, amended,
restated, waived, supplemented, discharged, canceled, terminated or otherwise
modified orally or by any course of dealing or in any manner other than as
provided in the Agreement.  This Amendment shall be considered part of the
Agreement and shall be a Loan Document for all purposes under the Agreement and
other Loan Documents.

 

(c)                                  This Amendment, the Agreement and the Loan
Documents constitute the final, entire agreement and understanding between the
parties with respect to the subject matter hereof and thereof and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
between the parties, and shall be binding upon and inure to the benefit of the
successors and assigns of the parties hereto and thereto.  There are no
unwritten oral agreements between the parties with respect to the subject matter
hereof and thereof.

 

(d)                                 THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET
FORTH IN THE AGREEMENT AND SHALL BE SUBJECT TO THE WAIVER OF JURY TRIAL AND
NOTICE PROVISIONS OF THE AGREEMENT.

 

(e)                                  Borrower may not assign, delegate or
transfer this Amendment or any of its rights or obligations hereunder.  No
rights are intended to be created under this Amendment for the benefit of any
third party donee, creditor or incidental beneficiary of Borrower or any
Guarantor.  Nothing contained in this Amendment shall be construed as a
delegation to Agent or Lenders of Borrower’s or any Guarantor’s duty of
performance, including, without limitation, any duties under any account or
contract in which Agent has or Lenders have a security interest or Lien.  This
Amendment shall be binding upon the Borrower and its respective successors and
assigns.

 

(f)                                    The Borrower shall pay all costs and
expenses incurred by Agent and Lenders or any of their affiliates in connection
with entering into, negotiating, preparing, reviewing and executing this
Amendment

 

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and the documents, agreements and instruments contemplated hereby and all
related agreements, documents and instruments, and all of the same shall be part
of the Obligations.

 

(g)                                 Borrower hereby (i) agrees that this
Amendment shall not limit or diminish the obligations of Borrower under the Loan
Documents, (ii) reaffirms its obligations under each of the Loan Documents to
which it is a party, and (iii) agrees that each of such Loan Documents remains
in full force and effect and is hereby ratified and confirmed.

 

(h)                                 All representations and warranties made in
this Amendment shall survive the execution and delivery of this Amendment and no
investigation by Agent or Lenders shall affect such representations or
warranties or the right of Agent or Lenders to rely upon them.

 

[Signature Page Follows]

 

IN WITNESS WHEREOF, the parties have caused this Fifth Amendment to Revolving
Credit and Term Loan Agreement to be executed by their respective officers
thereunto duly authorized, as of the date first above written.

 

 

LENDER/AGENT:

BORROWER:

 

 

 

 

CAPITALSOURCE FINANCE LLC

GARDENBURGER, INC.

 

 

By:

/s/Joseph Turitz

 

By:

/s/ Robert T. Trebing, Jr.

 

Name:

Joseph Turitz

 

Name:

Robert T. Trebing, Jr.

Title:

General Counsel

 

Title:

Senior Vice President and Chief

 

 

Financial Officer

 

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