Document:

Exhibit 10.38

                                October 16, 2002

Mr. Neil Blomquist
SPECTUM ORGANIC PRODUCTS, INC.
1304 South Point Blvd.
Suite 280
Petaluma, CA  94954

Dear Neil:

     This Letter Agreement, dated as of October 1, 2002, is between Spectrum
Organic Products, Inc., a California corporation ("Employer"), and Neil
Blomquist ("Employee"). Employer and Employee agree to the following terms and
conditions of employment.

1.   Period of Employment.

     (a) Basic Term. Employer shall continue to employ Employee to render
services to Employer in the position and with the duties and responsibilities
described in Section 2 for the period (the "Period of Employment") commencing on
the date of this Letter Agreement and ending upon the earlier of (i) October 1,
2004 (the "Term Date"), as, and to the extent, extended under Section 1(b); or
(ii) the date upon which the Period of Employment is terminated in accordance
with Section 4.

     (b) Renewal. Subject to Section 4, Employee's employment will be renewed
automatically for an additional one (1) year period (without any action by
either party) on the Term Date and on each anniversary thereof, unless Employer
gives Employee written notice sixty (60) days in advance of the beginning of any
one-year renewal period that the Period of Employment is to be terminated.
Employer may elect not to renew this Letter Agreement with or without cause, in
which case this Section 1(b) shall govern Employee's termination and not Section
4 (except for Employee's termination obligations set forth in Section 4(g),
which shall remain in effect). Nothing stated in this Letter Agreement or
represented orally or in writing to Employee shall create an obligation to renew
this Letter Agreement.

2.   Position and Responsibilities.

     (a) Position. Employee accepts employment with Employer as Chief Executive
Officer and shall perform all services appropriate to that position, as well as
such other services as may be assigned by Employer. Employee shall devote his
best efforts and full-time attention to the performance of his duties. Employee

<PAGE>

shall be subject to the direction of Employer, which shall retain full control
of the means and methods by which he performs the above services and of the
place(s) at which all services are rendered. Employee will not, however, be
required to relocate out of the California - North Bay Area. Employee shall
report to the Board of Directors of Employer. Employee shall be expected to
travel if necessary or advisable in order to meet the obligations of his
position.

     (b) Other Activity. Except upon the prior written consent of Employer,
Employee (during the Period of Employment) shall not (i) accept any other
employment; or (ii) engage, directly or indirectly, in any other business,
commercial, or professional activity (whether or not pursued for pecuniary
advantage) that is or may be competitive with Employer, that might create a
conflict of interest with Employer, or that otherwise might interfere with the
business of Employer, or any Affiliate. An "Affiliate" shall mean any person or
entity that directly or indirectly controls, is controlled by, or is under
common control with Employer.

3.   Compensation and Benefits.

     (a) Compensation. In consideration of the services to be rendered under
this Letter Agreement, Employer shall pay Employee a base salary of Two Hundred
Thousand Dollars ($200,000) per year, payable semi-monthly, pursuant to the
procedures regularly established, and as they may be amended, by Employer in its
sole discretion, during the Period of Employment. For the calendar year 2002,
Employee shall be eligible for an incentive bonus equal to 25% of his base
salary, pursuant to Employer's executive incentive compensation plan, a copy of
which is attached hereto as Exhibit A. For the calendar year 2003, Employee
shall be eligible for an incentive bonus equal to 50% of his base salary,
pursuant to Employer's executive incentive compensation plan. In addition,
Employer shall maintain, at its sole expense, a term life insurance policy on
Employee in the amount of Four Hundred Thousand Dollars ($400,000.00) payable to
the estate of Employee during the Period of Employment. Employee shall also
receive qualified stock options to purchase five hundred thousand (500,000)
shares of Employer Common Stock, pursuant to and subject to the terms and
conditions of Employer's Stock Option plan, a copy of which is attached hereto
as Exhibit B. Such stock options shall vest at the rate of one hundred
twenty-five thousand (125,000) shares per year of employment with Employer,
whether pursuant to this Letter Agreement or otherwise, until fully vested. All
compensation and comparable payments to be paid to Employee under this Letter
Agreement shall be less withholdings required by law.

     (b) Benefits. Employee shall be entitled to vacation leave in accordance
with Employer's standard policies. As Employee becomes eligible, he shall have
the right to participate in and to receive benefits from all present and future
benefit plans specified in Employer's policies and generally made available to
similarly situated employees of Employer. The amount and extent of benefits to
which Employee is entitled shall be governed by the specific benefit plan, as
amended. Employee also shall be entitled to any benefits or compensation tied to
termination as described in Section 4. Except for the compensation and benefits
described in Section 3(a), Employer reserves the ability, in its sole
discretion, to adjust Employee's benefits provided under this Letter Agreement.
No statement concerning benefits or compensation to which Employee is entitled
shall alter in any way the term of this Letter Agreement, any renewal thereof,
or its termination.

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<PAGE>

     (c) Expenses. Employer shall reimburse Employee for reasonable travel and
other business expenses incurred by Employee in the performance of his duties,
in accordance with Employer's policies, as they may be amended in Employer's
sole discretion.

4.   Termination of Employment.

     (a) By Death. The Period of Employment shall terminate automatically upon
the death of Employee. Employer shall pay to Employee's beneficiaries or estate,
as appropriate, any compensation then due and owing, including payment for
accrued unused vacation, if any. Thereafter, all obligations of Employer under
this Letter Agreement shall cease. Nothing in this Section shall affect any
entitlement of Employee's heirs to the benefits of any life insurance plan or
other applicable benefits.

     (b) By Disability. If, by reason of any physical or mental incapacity,
Employee has been or will be prevented from properly performing his duties under
this Letter Agreement for more than ninety (90) days in any one (1) year period,
then, to the extent permitted by law, Employer may terminate the Period of
Employment upon fourteen (14) days' advance written notice. Employer shall pay
Employee all compensation to which he is entitled up through the last business
day of the notice period; thereafter, all obligations of Employer under this
Letter Agreement shall cease. Nothing in this Section shall affect Employee's
rights under any applicable Employer disability plan.

     (c) Upon Sale, Merger, or Change of Control. In the event Employee is
terminated by Employer, or resigns his employment with Employer and its
successor, as a result of a sale of the company or substantially all of its
assets, or a merger or reorganization which results in a change in control,
Employee shall be entitled to the severance pay set forth in Section 4(d),
below. This Section 4(c) will be rendered moot, void, and unenforceable if
Employee enters into a new employment agreement on substantially the same, or
better, terms with Employer's successor in interest.

     (d) By Employer Not For Cause. At any time, Employer may terminate Employee
without Cause (as defined below) by providing Employee sixty (60) days advance
written notice. Employer shall have the option, in its complete discretion, to
terminate Employee at any time prior to the end of such notice period, provided
Employer pays Employee all compensation due and owing through the last day
actually worked (inclusive of accrued vacation pay), plus an amount equal to the
base salary Employee would have earned through the balance of the above notice
period; thereafter, all of Employer's obligations under this Letter Agreement
shall cease except those set forth below. In the event of any termination of
Employee without Cause, Employer shall pay to Employee severance pay equal to
100% of Employee's annual base salary in effect as of the date of termination of
Employee without cause, payable over one (1) year following such termination
date, and payable to Employee otherwise in the same manner as Employee received
payments of salary hereunder. In addition, Employee will receive a prorated
portion of his annual incentive bonus, paid in the amount equal to the bonus
that would otherwise be paid for the fiscal year in which Employee is terminated
in accordance with Employer's normal bonus payment policy, but in no event later
than ninety (90) days after the end of the fiscal year in which Employee is
terminated, and his medical benefits will continue during the course of the
1-year severance period at Employer's expense. Employee will not, however,
continue participation in the 401(k) plan during the severance period.

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<PAGE>

     (e) By Employer For Cause. At any time, and without prior notice (subject
to the cure provisions set forth below), Employer may terminate Employee for
Cause. Employer shall pay Employee all compensation then due and owing;
thereafter, all of Employer's obligations under this Letter Agreement shall
cease. Termination shall be for "Cause" if Employee: (i) acts in bad faith and
to the detriment of Employer; (ii) refuses or fails to act in accordance with
any specific lawful direction or order of Employer; (iii) exhibits in regard to
his employment unfitness or unavailability for service, unsatisfactory
performance in relation to Employee's key performance objectives as agreed by
Employer and Employee from time to time, misconduct, dishonesty, habitual
neglect, or incompetence; (iv) is convicted of a crime involving dishonesty,
breach of trust, or physical or emotional harm to any person; or (v) breaches
any material term of this Letter Agreement. If termination is due to Employee's
disability, Section 4(b) above shall control, and not this subsection on
termination for Cause. Notwithstanding the foregoing, it shall be a condition
precedent to Employer's right to terminate Employee's employment for the reasons
set forth in Subsections (4)(e)(ii)(iii) or (v) of this Agreement that (1)
Employer shall first have given Employee written notice stating with specificity
the reason for the termination ("breach") and (2) if such breach is susceptible
to cure or remedy, Employee will have a period of thirty (30) days after the
notice is given to remedy the breach to the satisfaction of Employer.

     (f) By Employee Not for Cause. At any time, Employee may terminate his
employment for any reason, with or without cause, by providing Employer sixty
(60) days advance written notice. Employer shall have the option, in its
complete discretion, to make Employee's termination effective at any time prior
to the end of such notice period, provided Employer pays Employee all
compensation due and owing through the last day actually worked, plus an amount
equal to the base salary Employee would have earned through the balance of the
above notice period, not to exceed sixty (60) days; thereafter, all of
Employer's obligations under this Letter Agreement shall cease.

     (g) Termination Obligations.

         (i)   Employee agrees that all property, including, without limitation,
all equipment, tangible Proprietary Information (as defined below), documents,
books, records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Employee in the course of his
employment, belongs to Employer and shall be returned promptly to Employer upon
termination of the Period of Employment.

         (ii)  All benefits to which Employee is otherwise entitled shall cease
upon Employee's termination, unless explicitly continued either under this
Letter Agreement or under any specific written policy or benefit plan of
Employer.

         (iii) Upon termination of the Period of Employment, Employee shall be
deemed to have resigned from all offices and directorships then held with
Employer or any Affiliate.

         (iv)  The representations and warranties contained in this Letter
Agreement and Employee's obligations under this Section 4g on Termination
Obligations and Section 5 on Proprietary Information shall survive the
termination of the Period of Employment and the expiration of this Letter
Agreement.

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<PAGE>

         (v)   Following any termination of the Period of Employment, Employee
shall fully cooperate with Employer in all matters relating to the winding up of
pending work on behalf of Employer and the orderly transfer of work to other
employees of Employer. Employee shall also cooperate in the defense of any
action brought by any third party against Employer that relates in any way to
Employee's acts or omissions while employed by Employer.

5.   Proprietary Information.

     (a) Defined. "Proprietary Information" is all information and any idea in
whatever form, tangible or intangible, pertaining in any manner to the business
of Employer, or any Affiliate, or its employees, clients, consultants, or
business associates, which was produced by any employee of Employer in the
course of his or her employment or otherwise produced or acquired by or on
behalf of Employer. All Proprietary Information not generally known outside of
Employer's organization, and all Proprietary Information so known only through
improper means, shall be deemed "Confidential Information." Without limiting the
foregoing definition, Proprietary and Confidential Information shall include,
but not be limited to: (i) formulas, teaching and development techniques,
processes, trade secrets, computer programs, electronic codes, inventions,
improvements, and research projects; (ii) information about costs, profits,
markets, sales, and lists of customers or clients; (iii) business, marketing,
and strategic plans; and (iv) employee personnel files and compensation
information. Employee should consult any Employer procedures instituted to
identify and protect certain types of Confidential Information, which are
considered by Employer to be safeguards in addition to the protection provided
by this Letter Agreement. Nothing contained in those procedures or in this
Letter Agreement is intended to limit the effect of the other.

     (b) General Restrictions on Use. During the Period of Employment, Employee
shall use Proprietary Information, and shall disclose Confidential Information,
only for the benefit of Employer and as is necessary to carry out his
responsibilities under this Letter Agreement. Following termination, Employee
shall neither, directly or indirectly, use any Proprietary Information nor
disclose any Confidential Information, except as expressly and specifically
authorized in writing by Employer. The publication of any Proprietary
Information through literature or speeches must be approved in advance in
writing by Employer.

     (c) Third-Party Information. Employee acknowledges that Employer has
received and in the future will receive from third parties their confidential
information subject to a duty on Employer's part to maintain the confidentiality
of this information and to use it only for certain limited purposes. Employee
agrees that he owes Employer and these third parties, during the Period of
Employment and thereafter, a duty to hold all such confidential information in
the strictest confidence and not to disclose or use it, except as necessary to
perform his obligations hereunder and as is consistent with Employer's agreement
with third parties.

     (d) Competitive Activity. Employee acknowledges and agrees that the pursuit
of the activities forbidden by this subsection would necessarily involve the use
or disclosure of Confidential Information in breach of the preceding
subsections, but that proof of such a breach would be extremely difficult. To
forestall this disclosure, use, and breach, and in consideration of the
employment under this Letter Agreement, Employee agrees that for a period of one
(1) year after termination of the Period of Employment, he shall not, directly
or indirectly, (i) divert or attempt to divert from Employer (or any Affiliate)
any business of any kind in which it is engaged; (ii) employ or recommend for
employment any person employed by Employer (or any Affiliate); or (iii) engage

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<PAGE>

in any business activity that is or may be competitive with Employer (or any
Affiliate) in any state where Employer conducts its business, unless Employee
takes action in contravention of this subsection without the use in any way of
Confidential Information.

     (e) Interference with Business. In order to avoid disruption of Employer's
business, Employee agrees that for a period of one (1) year after termination of
the Period of Employment, he shall not, directly or indirectly, (i) solicit any
customer of Employer (or any Affiliate) known to Employee during the Period of
Employment to have been a customer, to the detriment of Employer or the
betterment of any competitor of Employer; or (ii) solicit for employment any
person employed by Employer (or any Affiliate).

6.   MEDIATION AND Arbitration.

     (a) Mediation. Before invoking the arbitration mechanism set forth in
Section 6(b), the parties shall first participate in mediation of any dispute
between Employee (and his attorneys, successors, and assigns) and Employer (and
its Affiliates, shareholders, directors, officers, employees, agents,
successors, attorneys, and assigns) relating in any manner whatsoever to the
employment or termination of Employee, including, without limitation, all
disputes arising under this Letter Agreement. Such mediation shall be conducted
in the following manner: (i) the mediation shall be held in Sonoma County,
California; (ii) the costs of the mediation shall be split between the parties
equally; (iii) at least ten business days before the date of the mediation, each
side shall provide the mediator with a statement of its position and copies of
all supporting documents; (iv) each party shall send to the mediation a person
who has the authority to bind the party. If a subsequent dispute will involve
third parties, such as insurers or subcontractors, they shall also be asked to
participate in the mediation; (v) the mediator shall be chosen by agreement of
the parties. In the event that the parties cannot agree upon a mediator, the
dispute shall be resolved in accordance with the arbitration provisions of
Section 6(b); and (vi) if a party has participated in the mediation and is
dissatisfied with the outcome, that party may invoke the arbitration provisions
of Section 6(b).

     (b) Arbitration. To the fullest extent permitted by law, when not resolved
through mediation in accord with Section 6(a), all disputes between Employee
(and his attorneys, successors, and assigns) and Employer (and its Affiliates,
shareholders, directors, officers, employees, agents, successors, attorneys, and
assigns) relating in any manner whatsoever to the employment or termination of
Employee, including, without limitation, all disputes arising under this Letter
Agreement, ("Arbitrable Claims") shall be resolved by arbitration. All persons
and entities specified in the preceding sentence (other than Employer and
Employee) shall be considered third-party beneficiaries of the rights and
obligations created by this Section on Arbitration. Arbitrable Claims shall
include, but are not limited to, contract (express or implied) and tort claims
of all kinds, as well as all claims based on any federal, state, or local law,
statute, or regulation, excepting only claims under applicable workers'
compensation law and unemployment insurance claims. By way of example and not in
limitation of the foregoing, Arbitrable Claims shall include (to the fullest
extent permitted by law) any claims arising under Title VII of the Civil Rights
Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, and the California Fair Employment and Housing Act, as well as
any claims asserting wrongful termination, harassment, breach of contract,
breach of the covenant of good faith and fair dealing, negligent or intentional
infliction of emotional distress, negligent or intentional misrepresentation,
negligent or intentional interference with contract or prospective economic
advantage, defamation, invasion of privacy, and claims related to disability.

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<PAGE>

     (c) Procedure. Arbitration of Arbitrable Claims shall be in accordance with
the National Rules for the Resolution of Employment Disputes of the American
Arbitration Association, as amended ("AAA Employment Rules"), as augmented in
this Letter Agreement. Arbitration shall be initiated as provided by the AAA
Employment Rules, although the written notice to the other party initiating
arbitration shall also include a statement of the claim(s) asserted and the
facts upon which the claim(s) are based. Arbitration shall be final and binding
upon the parties and shall be the exclusive remedy for all Arbitrable Claims.
Either party may bring an action in court to compel arbitration under this
Letter Agreement and to enforce an arbitration award. Otherwise, neither party
shall initiate or prosecute any lawsuit or administrative action in any way
related to any Arbitrable Claim. Notwithstanding the foregoing, either party
may, at its option, seek injunctive relief pursuant to section 1281.8 of the
California Code of Civil Procedure. All arbitration hearings under this Letter
Agreement shall be conducted in Sonoma County, California. In any arbitration
proceeding under this Letter Agreement, the parties shall have the same rights
to discovery as would be available in a proceeding in California Superior Court,
as provided in section 1283.05 of the California Code of Civil Procedure. The
decision of the arbitrator shall be in writing and shall include a statement of
the essential conclusions and findings upon which the decision is based. The
interpretation and enforcement of this agreement to arbitrate shall be governed
by the California Arbitration Act. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY
HAVE TO TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT
LIMITATION ANY RIGHT TO TRIAL BY JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR
ENFORCEABILITY OF THE AGREEMENT TO ARBITRATE.

     (d) Arbitrator Selection and Authority. All disputes involving Arbitrable
Claims shall be decided by a single arbitrator. The arbitrator shall be selected
by mutual agreement of the parties within thirty (30) days of the effective date
of the notice initiating the arbitration. If the parties cannot agree on an
arbitrator, then the complaining party shall notify the AAA and request
selection of an arbitrator in accordance with the AAA Employment Rules. The
arbitrator shall have only such authority to award equitable relief, damages,
costs, and fees as a court would have for the particular claim(s) asserted. The
fees of the arbitrator shall be split between both parties, however, Employee's
share of such fees shall not exceed $5,000. Furthermore, if Employee asserts
statutory claims, Employee will not be required to pay the fees or costs
associated with arbitration to the extent such fees and costs exceed the fees
and costs that would be incurred were the same claims asserted in a judicial
forum. If the allocation of responsibility for payment of the arbitrator's fees
would render the obligation to arbitrate unenforceable, the parties authorize
the arbitrator to modify the allocation as necessary to preserve enforceability.
The arbitrator shall have exclusive authority to resolve all Arbitrable Claims,
including, but not limited to, whether any particular claim is arbitrable and
whether all or any part of this Letter Agreement is void or unenforceable.

     (e) Confidentiality. All proceedings and all documents prepared in
connection with any Arbitrable Claim shall be confidential and, unless otherwise
required by law, the subject matter thereof shall not be disclosed to any person
other than the parties to the proceedings, their counsel, witnesses and experts,
the arbitrator, and, if involved, the court and court staff. The parties shall
stipulate to all arbitration and court orders necessary to effectuate fully the
provisions of this subsection concerning confidentiality.

     (f) Continuing Obligations. The rights and obligations of Employee and
Employer set forth in this Section on Arbitration shall survive the termination
of Employee's employment and the expiration of this Letter Agreement.

                                       7

<PAGE>

7. Notices. Any notice or other communication under this Letter Agreement must
be in writing and shall be effective upon delivery by hand, upon facsimile
transmission to Employer (but only upon receipt by Employee of a written
confirmation of receipt), or three (3) business days after deposit in the United
States mail, postage prepaid, certified or registered, and addressed to Employer
or to Employee at the corresponding address or fax number (if any) below.
Employee shall be obligated to notify Employer in writing of any change in his
address. Notice of change of address shall be effective only when done in
accordance with this Section.

Employer's Notice Address:

   ATTN:  Corporate Secretary
   Spectrum Organic Products, Inc.
   1304 South Point Blvd.
   Suite 280
   Petaluma, CA  94954
   Fax Number:  (707) 765-8470

Employee's Notice Address:

   Neil Blomquist
   4392 Belmont Drive
   Sebastopol, CA 95472

8. Action by Employer. All actions required or permitted to be taken under this
Letter Agreement by Employer, including, without limitation, exercise of
discretion, consents, waivers, and amendments to this Letter Agreement, shall be
made and authorized only by the Chairman of the Board or by his or her
representative specifically authorized in writing to fulfill these obligations
under this Letter Agreement.

9. Integration. This Letter Agreement is intended to be the final, complete, and
exclusive statement of the terms of Employee's employment by Employer. This
Letter Agreement supersedes all other prior and contemporaneous agreements and
statements, whether written or oral, express or implied, pertaining in any
manner to the employment of Employee, and it may not be contradicted by evidence
of any prior or contemporaneous statements or agreements. To the extent that the
practices, policies, or procedures of Employer, now or in the future, apply to
Employee and are inconsistent with the terms of this Letter Agreement, the
provisions of this Letter Agreement shall control.

10. Amendments; Waivers. This Letter Agreement may not be amended except by an
instrument in writing, signed by each of the parties. No failure to exercise and
no delay in exercising any right, remedy, or power under this Letter Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, or power under this Letter Agreement preclude any other or
further exercise thereof, or the exercise of any other right, remedy, or power
provided herein or by law or in equity.

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<PAGE>

11. Assignment; Successors and Assigns. Employee agrees that he will not assign,
sell, transfer, delegate, or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Letter Agreement. Any such purported assignment, transfer, or delegation shall
be null and void. Nothing in this Letter Agreement shall prevent the
consolidation of Employer with, or its merger into, any other entity, or the
sale by Employer of all or substantially all of its assets, or the otherwise
lawful assignment by Employer of any rights or obligations under this Letter
Agreement. Subject to the foregoing, this Letter Agreement shall be binding upon
and shall inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any
person or entity other than those specifically enumerated in this Letter
Agreement.

12. Severability. If any provision of this Letter Agreement, or its application
to any person, place, or circumstance, is held by an arbitrator or a court of
competent jurisdiction to be invalid, unenforceable, or void, such provision
shall be enforced to the greatest extent permitted by law, and the remainder of
this Letter Agreement and such provision as applied to other persons, places,
and circumstances shall remain in full force and effect.

13. Attorneys' Fees. In any legal action, arbitration, or other proceeding
brought to enforce or interpret the terms of this Letter Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs.

14. Injunctive Relief. If Employee breaches or threatens to breach any of the
covenants in Section 5 on Proprietary Information, the parties acknowledge and
agree that the damage or imminent damage to Employer's business or its goodwill
would be irreparable and extremely difficult to estimate, making any remedy at
law or in damages inadequate. Accordingly, Employer shall be entitled to
injunctive relief against Employee in the event of any breach or threatened
breach of the above provisions by Employee, in addition to any other relief
(including damages) available to Employer under this Letter Agreement or under
law.

15. Governing Law. This Letter Agreement shall be governed by and construed in
accordance with the law of the State of California.

16. Interpretation. This Letter Agreement shall be construed as a whole,
according to its fair meaning, and not in favor of or against any party. By way
of example and not in limitation, this Letter Agreement shall not be construed
in favor of the party receiving a benefit nor against the party responsible for
any particular language in this Letter Agreement. Captions are used for
reference purposes only and should be ignored in the interpretation of the
Letter Agreement.

17. Employee Acknowledgment. Employee acknowledges that he has had the
opportunity to consult legal counsel in regard to this Letter Agreement, that he
has read and understands this Letter Agreement, that he is fully aware of its
legal effect, and that he has entered into it freely and voluntarily and based
on his own judgment and not on any representations or promises other than those
contained in this Letter Agreement.

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<PAGE>

     Please acknowledge your assent to the foregoing terms by executing this
Letter Agreement below. Thank you.

                                            VERY TRULY YOURS,
                                            Spectrum Organic Products, Inc.

                                            /s/  Jethren P. Phillips
                                            ---------------------------------
                                            By:  Jethren P. Phillips

                                            Its: Chairman of the Board

/s/  Neil Blomquist
-----------------------------
By:  Neil Blomquist

                                       10Exhibit 10.39

                SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     This Amendment, dated as of October 30, 2002, (this "Amendment") is made by
and between SPECTRUM ORGANIC PRODUCTS, INC., a California corporation (the
"Borrower"), and WELLS FARGO BUSINESS CREDIT, INC., a Minnesota corporation (the
"Lender").

                                    Recitals
                                    --------

     A. The Borrower and the Lender have entered into a Credit and Security
Agreement dated as of October 6, 1999 and as amended by that certain First
Amendment to Credit and Security Agreement dated October 18, 2001 (the "Credit
Agreement").

     B. The Borrower has requested that certain amendments be made to the Credit
Agreement.

     C. The Lender is willing to amend the Credit Agreement pursuant to the
terms and conditions set forth herein. The Borrower is entering into this
Amendment with the understanding and agreement that, except as specifically
provided herein, none of the Lender's rights or remedies as set forth in the
Credit Agreement is being waived or modified by the terms of this Amendment.

     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:

     1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.

     2. Amendments to Article VI.

          (a) Reporting Requirements. Section 6.1(f) of the Credit Agreement is
hereby amended and restated to read as follows:

               "(f) cash receipts journals, deposit tickets, and invoices and
                    bills of lading that exceed amounts and on a frequency as
                    determined by Lender."

          (b) Key Person Life Insurance. Notwithstanding anything stated to the
contrary in Section 6.11 of the Credit Agreement, the Borrower is no longer
required to maintain insurance upon the life of Joseph Stern. Accordingly, the
Lender shall release the Assignment of Policy as Collateral Security dated as of
October 5, 1999. Lender shall execute any release necessary, in form and
substance satisfactory to Lender, in order to evidence the release of such
assignment.

          (c) Minimum Book Net Worth. Section 6.15 of the Credit Agreement is
hereby amended and restated to read as follows:

<PAGE>

          "The Borrower will maintain its Book Net Worth, determined
          as at the end of each month, at an amount not less than the
          amount set forth below. Any non-cash losses incurred as a
          result of adjustments to reflect the impairment of assets
          and any income recorded by Borrower from escrow proceeds of
          certain product lines from Borrower's Aptos-based industrial
          ingredients business, shall not be included in determining
          whether or not Borrower has met the covenant set forth in
          this Section 6.15.

                 At the End of:                Minimum Book Net Worth
                 --------------                ----------------------
                   August 2002                       $2,524,000
                 September 2002                      $2,683,000
                  October 2002                       $2,851,000
                  November 2002                      $2,971,000
                 December 2002,                      $3,035,000"
          And each month end thereafter

          (d) New Covenants. Section 6.16 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

          "6.16 New Covenants. On or before March 31, 2003, Lender
          shall set new covenant levels for Sections 6.13, 6.14 and
          6.15 for periods after such date. The new covenant levels
          will be based on the Borrower's projections for such periods
          received by Lender pursuant to Section 6.1(e) and shall be
          no less stringent than the present levels."

     3. Amendment to Article VII.

          (a) Section 7.10 is hereby amended and restated in its
entirety to read as follows:

          "Section 7.10 Capital Expenditures. The Borrower will not
          incur or contract to incur Capital Expenditures of more than
          Six Hundred Thousand Dollars ($600,000) for the fiscal year
          ending December 31, 2002."

     4. No Other Changes. Except as explicitly amended by this Amendment, all of
the terms and conditions of the Credit Agreement shall remain in full force and
effect and shall apply to any advance or letter of credit thereunder.

     5. Conditions Precedent. This Amendment, shall be effective when the Lender
shall have received an executed original hereof in substance and form acceptable
to the Lender in its sole discretion.

                                      -2-

<PAGE>

     6. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:

          (a) The Borrower has all requisite power and authority to execute this
Amendment and to perform all of its obligations hereunder, and this Amendment
has been duly executed and delivered by the Borrower and constitutes the legal,
valid and binding obligation of the Borrower, enforceable in accordance with its
terms.

          (b) The execution, delivery and performance by the Borrower of this
Amendment has been duly authorized by all necessary corporate action and do not
(i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the Borrower, or the articles of incorporation or by-laws of the Borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected.

          (c) All of the representations and warranties contained in Article V
of the Credit Agreement are correct on and as of the date hereof as though made
on and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.

     7. References. All references in the Credit Agreement to "this Agreement"
shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be deemed
to refer to the Credit Agreement as amended hereby.

     8. No Other Waiver. The execution of this Amendment and any documents
related hereto shall not be deemed to be a waiver of any Default or Event of
Default under the Credit Agreement or breach, default or event of default under
any Security Document or other document held by the Lender, whether or not known
to the Lender and whether or not existing on the date of this Amendment.

     9. Costs and Expenses. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Credit Agreement, the
Security Documents and all other documents contemplated thereby, including
without limitation all reasonable fees and disbursements of legal counsel.
Without limiting the generality of the foregoing, the Borrower specifically
agrees to pay all fees and disbursements of counsel to the Lender for the
services performed by such counsel in connection with the preparation of this
Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses and the fee
required hereunder.

     10. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
Guarantor may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.

                                       3

<PAGE>

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

WELLS FARGO BUSINESS CREDIT, INC.           SPECTRUM ORGANIC PRODUCTS, INC.

By:  /s/  Angelo Samperisi                     By:  /s/  Robert B. Fowles
   -------------------------------                -----------------------------
Name:     Angelo Samperisi                     Name:     Robert B. Fowles
Title:    Vice President                       Title:    Chief Financial Officer

                                      -4-

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