EXHIBIT 10.17

 

SIXTH AMENDMENT TO

NOTE PURCHASE AGREEMENT

 

THIS SIXTH AMENDMENT (this “Amendment”), dated as of August 13, 2004, to the
Note Purchase Agreement, dated as of March 27, 1998, by and among DRESDNER
KLEINWORT BENSON PRIVATE EQUITY PARTNERS LP, a Delaware limited partnership (the
“Purchaser”), and GARDENBURGER, INC., an Oregon corporation (the “Company”).

 

WHEREAS, the parties hereto have entered into the Note Purchase Agreement, dated
as of March 27, 1998 (as amended, modified or restated from time to time, the
“Agreement”), a First Amendment to Note Purchase Agreement dated as of December
23, 1999 (the “First Amendment”), a Second Amendment to Note Purchase Agreement
dated as of January 10, 2002 (the “Second Amendment”), a Third Amendment to Note
Purchase Agreement dated as of September 20, 2002 (the “Third Amendment”), and a
Fourth Amendment to Note Purchase Agreement dated as of December 31, 2002 (the
“Fourth Amendment”), and a Fifth Amendment to Note Purchase Agreement dated as
of December 29, 2003 (the “Fifth Amendment”); unless otherwise defined herein,
all capitalized terms used herein (including the recitals) shall have the
meanings assigned to such terms in the Agreement, as amended by the First,
Second, Third, Fourth and Fifth Amendments and hereby;

 

WHEREAS, the Company has entered into a Revolving Credit and Term Loan Agreement
dated as of January 10, 2002, with CapitalSource Finance LLC as a lender and as
agent (“CapitalSource”);

 

WHEREAS, the Company and CapitalSource are contemporaneously entering into a
Sixth Amendment to Revolving Credit and Term Loan Agreement dated as of August
   , 2004, in substantially the form attached hereto as Exhibit A (the
“CapitalSource Sixth Amendment”); and

 

WHEREAS, the Company has requested the Purchaser to amend the Agreement on the
terms and conditions set forth in this Amendment;

 

NOW, THEREFORE, in consideration of the premises and the agreements, provisions,
and covenants contained herein, the parties hereto agree as follows:

 

1.     Amendments.  Effective as of August    , 2004, subject to the conditions
herein, the Agreement is amended as follows:

 

(a)   The financial covenant contained in subparagraph 2D(b)(iii) of the
Agreement as amended by the Second, Fourth and Fifth Amendments is hereby
amended and restated in its entirety to read as follows:

 

--------------------------------------------------------------------------------

 

“(iii)                         SENIOR FIXED CHARGE COVERAGE RATIO

 

The Senior Fixed Charge Coverage Ratio for each Quarterly Test Period set forth
below shall be not less than the ratios specified below:

 

Quarterly Test Period

 

Amount

 

September 30, 2004

 

1.215:1.00

 

December 31, 2004

 

1.13:1.00

 

March 31, 2005

 

1.33:1.00

 

June 30, 2005

 

1.41:1.00”

 

 

(b)   The financial covenant contained in subparagraph 2D(b)(v) of the Agreement
as amended by the Second, Fourth and Fifth Amendments is hereby amended and
restated in its entirety to read as follows:

 

“(v)                           CAPITAL EXPENDITURES

 

The Company shall not permit its Capital Expenditures in the aggregate to exceed
(i) $1,600,000 for the fiscal year ending on September 30, 2004,  and
(ii) $1,200,000 for each fiscal year ending on or after September 30, 2005.”

 

2.     Conditions.  This Amendment shall be subject to satisfaction of the
following conditions precedent, after giving effect to this Amendment, including
the waivers contained in Section 3 below:  (a) the Company shall have delivered
to the Purchaser an executed original copy of this Amendment and each other
agreement, document or instrument reasonably requested by the Purchaser in
connection with this Amendment; and (b) CapitalSource and the Company shall have
executed the CapitalSource Sixth Amendment.

 

3.     Waivers.  The Purchaser hereby acknowledges that, as of June 30, 2004,
the Company has been in breach of one or more financial covenants contained in
subparagraph 2(D)(b) of the Agreement, and hereby waives all such breaches and
noncompliance by the Company with subparagraph 2(D)(b) occurring prior to the
date of this Amendment.  This waiver does not apply to any breach or Event of
Default under the Agreement or the Convertible Notes to the extent it comes into
or continues in existence on or after the date of this Amendment.

 

4.     Ratification of Agreement.

 

(a)   To induce the Purchaser to enter into this Amendment, the Company
represents and warrants that, after giving effect to this Amendment, no
violation of the terms of the Agreement exist and all representations and
warranties contained in the Agreement are true, correct, and complete in all
material respects on and as of the date hereof except as (i) reflected in any
schedule to the Senior Credit Agreement, (ii) disclosed in the Company’s reports
filed with the Securities and Exchange Commission, or (iii) disclosed to
Purchaser’s representative on the Board during a meeting of the Board, and
except to the extent such representations and warranties specifically relate to
an earlier date in which case they were true, correct, and complete in all
material respects on and as of such earlier date.

 

--------------------------------------------------------------------------------

 

(b)   Except as expressly set forth in this Amendment, the terms, provisions and
conditions of the Agreement and the Investment Documents are unchanged, and said
agreements, as amended, shall remain in full force and effect and are hereby
confirmed and ratified.

 

5.     Consent to CapitalSource Sixth Amendment.  The Purchaser consents to the
execution and delivery by the Company of the CapitalSource Sixth Amendment and
affirms that the provisions of the CapitalSource Sixth Amendment do not
constitute a breach or Event of Default under the Agreement or the Convertible
Notes.

 

6.     Binding on Successors and Assigns.  All the terms and provisions of this
Amendment shall be binding upon and inure to the benefit of the parties hereto,
their respective successors, assigns and legal representatives.  Whenever in
this Amendment any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party.

 

7.     Further Assurances.  Each of the Company and the Purchaser, as the case
may be, shall duly execute and deliver, or cause to be executed and delivered,
such further instruments and perform or cause to be performed such further acts
as may be necessary or proper in the reasonable opinion of the Purchaser to
carry out the provisions and purposes of this Amendment.

 

8.     Effect of Amendment.  To the extent any terms and conditions in the
Agreement shall contradict or be in conflict with any provisions of this
Amendment, the provisions of this Amendment shall govern.

 

9.     Expenses.  All expenses of the Purchaser incurred in connection with this
Amendment, including reasonable expenses of the Purchaser’s counsel, will be
paid by the Company.

 

10.   Governing Law.  This Amendment shall be governed by, and shall be
construed in accordance with, the laws of the state of New York, without giving
effect to any choice of law or conflict of law rules or provisions (whether of
the state of New York or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the state of New York.

 

11.   Counterparts.  This Amendment may be executed in separate counterparts,
each of which shall be an original and all of which taken together shall
constitute one and the same agreement.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the date first written above.

 

 

 

DRESDNER KLEINWORT BENSON PRIVATE
EQUITY PARTNERS LP

 

 

 

By:

Dresdner Kleinwort Capital LLC

 

Its:

General Partner

 

 

 

 

 

By:

Private Equity Employees LLC

 

 

Its:

Managing Member

 

 

 

 

 

 

 

By:

/s/ Alex Coleman

 

 

 

 

 

 

 

 

Its:

Managing Member

 

 

 

 

 

 

 

 

GARDENBURGER, INC.

 

 

 

 

 

 

 

By:

/s/Scott C. Wallace

 

 

 

Scott C. Wallace

 

Its:

President and Chief Executive Officer

 

--------------------------------------------------------------------------------