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 


 


 

















 


 


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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