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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