Dresdner Kleinwort Benson
                                                     Private Equity LLC

                                                     75 Wall Street, 24th Floor
                                                     New York, NY  10005

January 5, 2001




Gardenburger, Inc.
1411 S.W. Morrison Street
Portland, OR 97205
Attention:  Chief Financial Officer

Ladies and Gentlemen:

         Reference is hereby made to the Convertible  Senior  Subordinated  Note
dated March 27, 1998 in the principal  amount of $15,000,000  (the  "Convertible
Note") issued by Gardenburger, Inc. (the "Company") to Dresdner Kleinwort Benson
Private Equity Partners LP ("Dresdner").

         1.       The  parties  hereto  agree  to add  the  following  paragraph
to the  end of  Section  2 of the Convertible Note:

                  "Notwithstanding  the first two  paragraphs of this Section 2,
                  on any Interest  Payment Date, the Company may (but only if it
                  has  received  the prior  written  consent  of the  Registered
                  Holder) satisfy its obligation to pay the interest  payable to
                  the  Registered  Holder  on  such  Interest  Payment  Date  by
                  increasing,  as of such Interest Payment Date, the then unpaid
                  principal  amount of this  Convertible Note by an amount equal
                  to the amount of such interest, which interest, if the Company
                  is  utilizing  the  provisions  of this  paragraph,  shall  be
                  calculated  at  the  rate  of  ten  percent  (10%)  per  annum
                  (computed on the basis of a 360-day year, as appropriate,  and
                  the  actual  number of days  elapsed  in any year)  instead of
                  seven  percent  (7%) per annum for  purposes of such  interest
                  payment  only.  The  Company  shall  effect  such  payment  by
                  delivery to the  Registered  Holder of a letter,  signed by an
                  authorized officer of the Company, which states (i) the amount
                  of such  interest,  (ii) that such  interest has been added to
                  the then unpaid  principal amount of this Convertible Note and
                  (iii) the  Market  Price per share of the  Common  Stock as of
                  such Interest  Payment Date, which letter must be delivered to
                  the  Registered  Holder no later  than five  days  after  such
                  Interest  Payment  Date.  If the  Company  makes  an  optional
                  prepayment  of a  portion  of the  principal  amount  of  this
                  Convertible  Note  pursuant to Section 1(b),  such  prepayment
                  shall be applied: first, to any unpaid accrued interest on the
                  Convertible Note;  second, to any pre-payment  premium payable
                  under  Section  1(b);  third,  to  any  amounts  added  to the

<PAGE>

                  principal  amount of this  Convertible  Note  under this third
                  paragraph  of  Section 2, in reverse  order of  addition;  and
                  fourth,  to the initial  $15,000,000  principal amount of this
                  Convertible Note.

         2.       The  parties  hereto  agree to  amend the second  paragraph of
Section 1(d)  to read in its entirety as follows:

                  "Upon  receipt  of any such  election,  the  Company  shall be
                  obligated  to  prepay  the  unpaid  principal  amount  of this
                  Convertible  Note as  specified  therein,  together  with  the
                  applicable pre-payment premium and all unpaid accrued interest
                  thereon,  on the later of (a) the  occurrence of the Change of
                  Control or Sale  Event,  as the case may be, and (b) the fifth
                  day after  the  Company's  receipt  of such  election.  If any
                  proposed  Change of Control or Sale Event does not occur,  all
                  requests  for  prepayment  in  connection  therewith  shall be
                  automatically  rescinded;  provided, that, if there has been a
                  material change in the terms or the timing of the transaction,
                  the  Registered  Holder of this  Convertible  Note may rescind
                  such  Registered  Holder's  request for  prepayment  by giving
                  written   notice   of   such   rescission   to  the   Company.
                  Notwithstanding  the foregoing,  at any time prior to the date
                  the Company makes a pre-payment pursuant to this Section 1(d),
                  the Registered Holder may elect (by delivery of written notice
                  to the Company) to receive such payment,  in whole or in part,
                  in shares of Common  Stock with a Market  Price as of the date
                  of payment  (except that, with respect to amounts of principal
                  relating to interest payments  satisfied pursuant to the third
                  paragraph  of Section 2 below,  the Market Price of the shares
                  of Common  Stock to be  delivered  pursuant  to the  foregoing
                  election shall be the Market Price as of the Interest  Payment
                  Date for the applicable  interest payment, as specified in the
                  letter  delivered by the Company to the  Registered  Holder to
                  effect such payment) equal to the amount of principal, premium
                  and/or  interest the Registered  Holder has elected to receive
                  in shares of Common Stock rather than cash.  The Company shall
                  take all necessary  actions so that,  within ninety days after
                  delivery of such shares to the Registered  Holder, any and all
                  shares of Common  Stock  delivered  to the  Registered  Holder
                  pursuant to the immediately preceding sentence (or any and all
                  shares  issued in  exchange  therefor in  connection  with the
                  Change of  Control  or Sale  Event)  will be  saleable  to any
                  Person."

         This letter 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.

         In all other respects the Convertible Note is ratified and shall, as so
changed by the  amendment  provided in this  letter,  continue in full force and
effect.

<PAGE>

         Please  acknowledge  your  agreement  to the  terms of this  letter  by
signing this letter in the space provided below.

                                   DRESDNER KLEINWORT BENSON PRIVATE
                                   EQUITY PARTNERS LP

                                   By its general partner:

                                   Dresdner Kleinwort Benson Private Equity LLC


                                   By       /s/ Alexander P. Coleman
                                            ------------------------
                                            Name:  Alexander P. Coleman
                                            Title:    Authorized Person


Acknowledged and agreed:

GARDENBURGER, INC.



By:      /s/ Scott Wallace
        ----------------------------
         Name:  Scott Wallace
         Title:    President and CEO