EXHIBIT 10.26

 

FIRST AMENDMENT TO

REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

                THIS FIRST AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
dated as of September 30, 2002 (the “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”);

 

                WHEREAS, the Borrower has requested that Agent and Lenders amend
certain provisions of the Agreement, all 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 are hereby
acknowledged, the parties hereto agree as follows:

 

                SECTION 1.         Amendment.  Paragraph 4 of Annex I of the
Agreement shall be and hereby is amended and restated and replaced in its
entirety to read in full as follows:

 

“4)      CAPITAL EXPENDITURES

            BORROWER SHALL NOT PERMIT ITS CAPITAL EXPENDITURES IN THE AGGREGATE
TO EXCEED (I) $2,200,000 DURING THE FISCAL YEAR ENDING ON SEPTEMBER 30, 2002,
AND (II) $1,100,000 DURING ANY FISCAL YEAR THEREAFTER.”

 

                SECTION 2.         Conditions.  This Amendment shall be
effective upon and subject to satisfaction of the following conditions precedent
(such effective time, being the “Effective Time”):  (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 and as of the Effective
Time as if made on 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, (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) (i) the holders of the Subordinated Debt and Borrower shall have amended
Section 2D(b)(iv) of the Note Purchase Agreement so that the capital
expenditures covenant contained therein shall be the same as Paragraph 4 of
Annex I of the Agreement as amended hereby except that the test levels shall be
10% looser than those in said paragraph of Annex I of the Agreement as amended
hereby, all in form and substance satisfactory to Agent, and (ii) the holders of
the Subordinated Debt shall have consented in writing to this Amendment, in form
and substance satisfactory to Agent, and none of the provisions of this
Amendment shall be a default

 

 

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or event of default under the Note Purchase Agreement or with respect to the
Subordinated Debt; (e) Borrower shall have paid to Agent all fees, costs and
expenses owed to and/or incurred by the Agent and Lenders arising in connection
with the Loan Documents and/or this Amendment; and (f) 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, nor 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
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.

 

 

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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 or Lenders
have has 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, including, without limitation,
documentation and diligence fees and expenses, all search, audit, appraisal,
recording, professional and filing fees and expenses and all other out-of-pocket
charges and expenses (including, without limitation, UCC and judgment and tax
lien searches and UCC filings and fees for post-Closing UCC and judgment and tax
lien searches) and reasonable attorneys’ fees and expenses, in connection with
entering into, negotiating, preparing, reviewing and executing this Amendment
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.  If Agent, any Lender or any of their affiliates uses
in-house counsel for any of the purposes set forth above the Borrower expressly
agrees that its

 

 

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Obligations include reasonable charges for such work commensurate with the fees
that would otherwise be charged by outside legal counsel selected by such Person
in its sole discretion for the work performed.

 

(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.

 

 

IN WITNESS WHEREOF, the parties have caused this First 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 to be effective as
of the Effective Time.

 

LENDER/AGENT:

 

CAPITALSOURCE FINANCE LLC

 

By:

/s/ Steven A. Museles

Name:

Steven A. Museles

Title:

Senior Vice President

 

BORROWER:

 

GARDENBURGER, INC.

 

 

By:

/s/ Lorraine Crawford

Name:

Lorraine Crawford

Title:

Vice President, Finance and Corporate Controller

 

 

 

 

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