EXHIBIT 10.1

 

FIRST AMENDMENT TO
AMENDED AND RESTATED CONVERTIBLE SENIOR SUBORDINATED NOTE

 

THIS FIRST AMENDMENT (this “Amendment”), dated as of December 29, 2003, to the
Amended and Restated Convertible Senior Subordinated Note (the “Convertible
Note”), dated as of January 10, 2002, of GARDENBURGER, INC., an Oregon
corporation (the “Company”), issued to DRESDNER KLEINWORT BENSON PRIVATE EQUITY
PARTNERS LP, a Delaware limited partnership (“Dresdner”).

 

WHEREAS, the Company and Dresdner are entering into a Fifth Amendment (the
“Fifth Amendment”) to the Note Purchase Agreement dated as of March 27, 1998, by
and among Dresdner and the Company, as amended (the “Note Purchase Agreement”),
to amend certain financial covenants set forth therein;

 

WHEREAS, the Company has requested that the Convertible Note be amended to
extend the Maturity Date from March 31, 2005, to June 15, 2007; and

 

WHEREAS, the Company has requested that the payment of interest due December 31,
2003, under a letter agreement dated September 25, 2003, between Dresdner and
the Company (the “December 2003 Interest Payment”), and each interest payment
due on each Interest Payment Date after December 31, 2003, be deferred as
provided herein.

 

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

 

1.               Maturity Date.  The Maturity Date specified in the Convertible
Note shall be June 15, 2007; provided that, if the Company has not delivered to
Dresdner by April 30, 2004, a certified copy of Articles of Amendment duly filed
with the Oregon Secretary of State (“Certified Articles”) pursuant to which the
Company will have the right to require that the first scheduled principal
payment or redemption specified therein will not occur before June 30, 2008,
with respect to at least sixty-seven percent (67%) of the shares of the
Company’s preferred stock then outstanding, the Maturity Date shall revert to
March 31, 2005; and provided, further, that if the Company has delivered to
Dresdner by April 30, 2004, Certified Articles pursuant to which the Company
will have the right to require that the first scheduled principal payment or
redemption specified therein will not occur before June 30, 2008, with respect
to at least sixty-seven percent (67%), but less than all, of the shares of the
Company’s preferred stock then outstanding, the Maturity Date shall instead be
March 25, 2006.

 

2.               Interest Payments.

 

(a)          Interest Payable to Extent Permitted by Senior Debt Documents. 
Notwithstanding the provisions of Section 4 of the Convertible Note, an Event of
Default will not be deemed to have occurred pursuant to Section 4(a)(ii) of the
Convertible Note by reason of the Company’s failure to pay all or any portion of
(i) the December 2003 Interest Payment, or any interest accrued thereon or (ii)
any interest due and payable on any Interest Payment Date

 

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occurring after December 31, 2003, up to but not including the Maturity Date, or
any interest accrued thereon; provided that the Company pays to the Registered
Holder in cash on each Interest Payment Date occurring on or after September 30,
2004, the amount of interest that has accrued and become payable through such
date pursuant to Section 2 of the Convertible Note to the extent and only if
permitted under Section 7.11 of the Revolving Credit and Term Loan Agreement
dated as of January 10, 2002, between CapitalSource Finance LLC and the Company,
as amended by the Fourth Amendment thereto dated of even date with this
Amendment; and provided further that, beginning October 1, 2003, and continuing
until the Company has paid in full the December 2003 Interest Payment and all
interest due and payable on any Interest Payment Date occurring after
December 31, 2003, through the date on which the Company is no longer in arrears
with respect to any interest that became due and payable on or before the
Interest Payment Date immediately preceding such date (at which time the
interest rate on the Convertible Note will revert to 10 percent (10%)), interest
will accrue on the unpaid principal amount of the Convertible Note outstanding
from time to time, together with all accrued and unpaid interest as of the
Interest Payment Date immediately preceding the determination of the amount of
interest thus accrued, at the rate of thirteen percent (13%) per annum (in each
case, computed on the basis of a 360-day year, as appropriate, and the actual
number of days elapsed in any year), or (if less) at the highest rate then
permitted under applicable law.

 

(b)         Effect of Certain Defaults.  If an Event of Default of the type
described in Section 4(a)(iii) or 4(a)(vi) of the Convertible Note has occurred
and has not been waived by Dresdner in writing, then Section 4(b)(ii) will also
apply to all amounts of unpaid interest as to which an Event of Default had not
otherwise occurred under the provisions of this Amendment.

 

3.               Conditions.  This Amendment shall be conditioned upon and take
effect only upon the effectiveness of the Fifth Amendment.

 

4.               No Waiver.  Nothing contained in this Amendment will constitute
a waiver or consent by Dresdner to any existing Event of Default, or modify any
term of the Convertible Note or the Note Purchase Agreement, except as expressly
set forth in this Amendment.

 

5.               Reliance by Holders of Senior Indebtedness.  This Amendment may
be relied upon by holders of any Senior Indebtedness (as defined in the Note
Purchase Agreement).  Dresdner hereby agrees not to challenge or contest the
validity, legality, binding effect or enforceability of the provisions set forth
in paragraph 6P of the Note Purchase Agreement or the priority, validity,
legality, binding effect or enforceability of the terms and provisions of the
Senior Debt Documents (as defined in the Note Purchase Agreement) or the rights
of the holders of the Senior Indebtedness in the property and assets of the
Company.

 

6.               Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.

 

7.               Ratification of Convertible Note.  In all other respects, the
Convertible Note is ratified and shall, as so changed by this Amendment,
continue in full force and effect.

 

[Remainder intentionally blank]

 

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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/ Alexander P. Coleman

 

 

 

 

 

 

 

 

Its:

Authorized Person

 

 

 

 

GARDENBURGER, INC.

 

 

 

 

By:

/s/ Scott C. Wallace

 

 

Scott C. Wallace

 

Its:

President and Chief Executive Officer

 

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