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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