Exhibit 10.5
                               THIRD AMENDMENT TO

                              REDEMPTION AGREEMENT



This Third  Amendment  to  Redemption  Agreement is entered into this 9th day of
July, 1999, by and between DEBORA BAINBRIDGE  PHILLIPS (the "Seller"),  SPECTRUM
NATURALS,  INC.,  a  California  corporation  (the  "Corporation")  and  Jethren
Phillips.

     WHEREAS,   the  Seller  and  the  Corporation  entered  into  that  certain
Redemption  Agreement (the  "Redemption  Agreement")  dated November 1, 1996, as
amended by the First Amendment to Redemption  Agreement and the Second Amendment
to Redemption  Agreement between the parties,  and a related  Promissory Note in
the principal amount of $1,621,716; and

     WHEREAS,  the Seller and the Corporation wish to confirm for the benefit of
the National Bank of the Redwoods (the "Bank") as the lender to the Corporation,
that  amounts  due  under  the  Promissory   Note  are  subordinate  to  certain
indebtedness of the Corporation to the Bank;

     NOW,  THEREFORE,  the  Redemption  Agreement is further  amended to add the
following statement:

     The  Promissory  Note and the  Corporation's  obligations to pay thereunder
shall at all times be subject to and subordinate to, any terms and conditions of
payment imposed by the Bank, but only as to the aggregate levels of indebtedness
currently  provided for (whether or not currently  drawn down) under the lending
agreements between the Corporation and the Bank.


SELLER                                      CORPORATION

                                            Spectrum Naturals, Inc.


/s/ Debora Bainbridge Phillips            By: /s/ Debora Bainbridge Phillips
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Debora Bainbridge Phillips


                                              /s/ Jethren Phillips
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                                                 Jethren Phillips