Spectrum Organic Products Inc – ‘S-4’ on 7/23/99

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Registration of Securities Issued in a Business-Combination Transaction   —   Form S-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: S-4         Registration of Securities Issued in a               408   1.70M 
                          Business-Combination Transaction                       
 2: EX-2.5      Certificate of Approval and Agreement of Merger        2     13K 
 3: EX-2.6      Certificate of Approval and Agreement of Merger        2     13K 
 4: EX-3.3      Bylaws of S & D Foods, Inc.                           19     74K 
 5: EX-3.4      Bylaws of Spectrum Organic                            19     71K 
 6: EX-5.1      Opinion of Ofpi Counsel                                2     13K 
 7: EX-5.2      Opinion of Company Counsel                             2     15K 
 8: EX-8.1      Opinion of Carr, McClelland                            3     15K 
 9: EX-8.2      Tax Opinion                                            3     16K 
10: EX-8.3      Opinion of Cooley Godward LLP                          3     15K 
11: EX-10.2     Redemption Agreement                                  19     56K 
12: EX-10.3     First Amendment                                        1      9K 
13: EX-10.4     Second Amendment                                       3     20K 
14: EX-10.5     Third Amendment                                        1     11K 
15: EX-10.6     Fourth Amendment                                       1     12K 
16: EX-23.4     Consent                                                1      9K 
17: EX-23.5     Consent                                                1      9K 
18: EX-23.6     Consent                                                1      9K 
19: EX-23.7     Consent                                                1      9K 
20: EX-99.1     Proxy - Registrant                                     2     14K 
21: EX-99.2     Proxy - Spectrum                                       2     12K 
22: EX-99.3     Proxy - Organic Ingredients                            2     12K 

S-4   —   Registration of Securities Issued in a Business-Combination Transaction
Document Table of Contents

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 As filed with the Securities and Exchange Commission on July 23, 1999
 Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 -------------------------

FORM S-4
REGISTRATION STATEMENT
 UNDER
THE SECURITIES ACT OF 1933

 ORGANIC FOOD PRODUCTS, INC.
 -----------------------------------------------------
(Exact Name Of Registrant As Specified In Its Charter)

California                     2033                     94-3076294
 -----------------------     -------------------------    ----------------------
(State Of Incorporation)       (Primary Standard           (I.R.S. Employer   
                             Industrial Classification    Identification Number)
Code Number)

 550 Monterey Road
 Morgan Hill, California 95037
(408) 782-1133
  ----------------------------------------------------------------
 (Address, Including Zip Code, And Telephone Number,
 Including Area Code, Of Registrant's Principal Executive Offices)

 -------------------------
John Battendieri
 Chief Executive Officer
 Organic Food Products, Inc.
 550 Monterey Road
 Morgan Hill, California 95037
(408) 782-1133
--------------------------------------------------------------------------------
(Name, Address, Including Zip Code, And Telephone Number, Including Area Code,
 Of Agent For Service)
 -------------------------

Copies To:

Gary A. Agron, Esq.                       Susan Cooper Philpot, Esq.          
5445 DTC Parkway, Suite 520               Cooley Godward LLP                  
Englewood, Colorado  80111                One Maritime Plaza, 20th Floor      
(303) 770-7254                            San Francisco, California 94111     
                    (415) 693-2000

Mark A. Cassanego, Esq.                   Dennis R. Book, Esq.                
Carr, McClellan, Ingersoll,               Bosso, Williams, Sachs, Book,       
Thompson & Horn,                          Atack & Gallagher                   
Professional Corporation                  A Professional Corporation          
216 Park Road                             133 Mission Street, Suite 280       
Burlingame, California 94010              Santa Cruz, California  95061       
(650) 342-9600                            (831) 426-8484                      

 -------------------------

Approximate Date Of Commencement Of Proposed Sale To The Public:

 As soon as practicable following the effectiveness of this Registration
Statement, the effective time of the proposed merger of Organic Ingredients,    
Inc. with and into the Registrant as described in the Agreement and Plan of     
Merger and Reorganization, dated May 14, 1999, attached as Annex A to the Joint 
Proxy Statement/Prospectus forming a part of this Registration Statement, and   
the effective time of the proposed merger of Spectrum Naturals, Inc. with and   
into the Registrant, as described in the Agreement and Plan of Merger and       
Reorganization, dated as of May 14, 1999, attached as Annex B to the Joint Proxy
Statement/Prospectus forming a part of this Registration Statement.             

If the securities being registered on this Form are to be offered in  
connection with the formation of a holding company, and there is compliance with
General Instruction G, check the following box. |_|                             

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If the form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and   
list the Securities Act registration statement number of the earlier effective  
registration statement for the same offering. |_|                               

  If this form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act   
registration statement number of the earlier effective registration statement   
for the same offering. |_|                                                      

 -------------------------

                                                        [Enlarge/Download Table]


                                                  CALCULATION OF REGISTRATION FEE                                                  
                                                  -------------------------------                                                  

===================================================================================================================================
                                                                     Proposed Maximum       Proposed Maximum         Amount Of     
                                                 Amount To Be         Offering Price           Aggregate            Registration   
   Title Of Shares To Be Registered             Registered (1)        Per share (2)        Offering Price (2)         Fee (3)      
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
Common Stock, without par value per share         36,286,495             $0.75                $27,214,871             $7,566       
===================================================================================================================================

(1)  Includes the number of shares of the common stock of the Registrant that   
 may be issued to former shareholders of Spectrum Naturals, Inc. and the
   number of shares of the common stock of the Registrant that may be issued
     to former shareholders of Organic Ingredients, Inc. pursuant to the mergers
described herein.                                                     
(2)  In accordance with the mergers, each share of Spectrum Naturals will be    
   converted into 4,669.53 shares of common stock of the Registrant and each
   share of Organic Ingredients will be converted into 39.5 shares of common
   stock of the Registrant. Pursuant to Rule 457(f) under the Securities Act
 of 1933, as amended, the registration fee was calculated as of July 21,
     1999 and was estimated solely for the purpose of computing the registration
fee.                                                                  

(3)  Includes $5,443 previously paid by the Registrant.                         

------------------------- 

  The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration       
Statement shall thereafter become effective in accordance with Section 8(a) of  
the Securities Act of 1933, as amended, or until the Registration shall become  
effective in accordance with Section 8(a) of the Securities Act of 1933, as     
amended, or until the Registration shall become effective on such date as the   
Commission, acting pursuant to Section 8(a) may determine.                      

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 [LOGO OF ORGANIC INGREDIENTS, INC.]

 Organic Ingredients, Inc.
P.O. Box 658
 Aptos, California 95001

 Notice of Special Meeting of Shareholders

To the Shareholders of                                                          
Organic Ingredients, Inc.:                                                      

   NOTICE IS HEREBY GIVEN that Organic Ingredients, Inc. will hold a special
meeting of its shareholders on August 24, 1999, at 11:00 a.m., local time, at   
the Organic Ingredients corporate offices at 335 Spreckels Drive, Suite F,      
Aptos, California 95003, for the following purposes:                            

    1. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger and Reorganization, dated as of May 14, 1999, by and between 
Organic Ingredients and Organic Food Products, Inc., a California corporation,  
providing for the merger of Organic Ingredients with and into OFPI, with OFPI as
the surviving corporation. As a result of the merger, each outstanding share of 
the common stock, without par value per share, of Organic Ingredients would be  
converted into the right to receive 39.5 shares of the common stock, without par
value, of OFPI.                                                                 

    2. To transact such other business as may properly come before the special
meeting.                                                                        

    Only holders of record of Organic Ingredients common stock at the close of
business on the record date of July 29, 1999 will be entitled to notice of, and 
to vote at, the special meeting. The affirmative vote of a majority of the      
outstanding shares of Organic Ingredients common stock entitled to vote at the  
special meeting is required to approve and adopt the merger agreement.          

   If you attend the meeting, you may vote your shares in person, which will
revoke any previously executed proxy. FAILURE TO RETURN A PROPERLY EXECUTED     
PROXY CARD OR TO VOTE AT THE SPECIAL MEETING WILL GENERALLY HAVE THE SAME EFFECT
AS A VOTE AGAINST THE MERGER.                                                   

                                By Order of the Board of Directors

             /s/ Andrew Poston
             Corporate Secretary

Aptos, California                                                               
August 2, 1999                                                                  

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL    
MEETING, PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE   
ENCLOSED POSTAGE PREPAID ENVELOPE.                                              

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 [LOGO OF SPECTRUM NATURALS, INC.]

 Spectrum Naturals, Inc.
 133 Copeland Street
Petaluma, California 94952

 Notice of Special Meeting of Shareholders

To the Shareholders of                                                          
Spectrum Naturals, Inc.:                                                        

 NOTICE IS HEREBY GIVEN that Spectrum Naturals, Inc. will hold a special
meeting of its shareholders on August 24, 1999, at 11:00 a.m., local time, at   
the Spectrum corporate offices at 133 Copeland Street, Petaluma, California     
94952, for the following purposes:                                              

    1. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger and Reorganization, dated as of May 14, 1999, by and between 
Spectrum and Organic Food Products, Inc., a California corporation, providing   
for the merger of Spectrum with and into OFPI, with OFPI as the surviving       
corporation. As a result of the merger, each outstanding share of the common    
stock, without par value per share, of Spectrum would be converted into the     
right to receive 4,669.53 shares of the common stock, without par value, of     
OFPI.                                                                           

    2. To transact such other business as may properly come before the special
meeting.                                                                        

     Only holders of record of Spectrum common stock at the close of business on
the record date of July 29, 1999 will be entitled to notice of, and to vote at, 
the special meeting. The affirmative vote of a majority of the outstanding      
shares of Spectrum common stock entitled to vote at the special meeting is      
required to approve and adopt the merger agreement.                             

   If you attend the meeting, you may vote your shares in person, which will
revoke any previously executed proxy. FAILURE TO RETURN A PROPERLY EXECUTED     
PROXY CARD OR TO VOTE AT THE SPECIAL MEETING WILL GENERALLY HAVE THE SAME EFFECT
AS A VOTE AGAINST THE MERGER.                                                   

                                By Order of the Board of Directors

                 /s/  Jethren Phillips

               Corporate Secretary

Petaluma, California                                                            
August 2, 1999                                                                  

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL    
MEETING, PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE   
ENCLOSED POSTAGE PREPAID ENVELOPE.                                              

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 [LOGO OF ORGANIC FOOD PRODUCTS, INC.]

 Organic Food Products, Inc.
 550 Monterey Road
 Morgan Hill, California 95037

 Notice of Special Meeting of Shareholders

To the Shareholders of                                                          
Organic Food Products, Inc.:                                                    

     NOTICE IS HEREBY GIVEN that Organic Food Products, Inc. will hold a special
meeting of its shareholders on August 24, 1999, at 8:30 a.m., local time, at the
OFPI corporate offices at 550 Monterey Road, Morgan Hill, California 95037, for 
the following purposes:                                                         

    1. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger and Reorganization, dated as of May 14, 1999, by and between 
OFPI and Organic Ingredients, Inc., a California corporation, providing for the 
merger of OI with and into OFPI, with OFPI as the surviving corporation. As a   
result of the OI merger, each outstanding share of the common stock, without par
value per share, of OI would be converted into the right to receive 39.5 shares 
of the common stock, without par value, of OFPI.                                

    2. To consider and vote upon a proposal to approve and adopt the Agreement
and Plan of Merger and Reorganization, dated as of May 14, 1999, by and between 
OFPI and Spectrum Naturals, Inc., a California corporation, providing for the   
merger of Spectrum with and into OFPI, with OFPI as the surviving corporation.  
As a result of the Spectrum merger, each outstanding share of the common stock, 
without par value per share, of Spectrum would be converted into the right to   
receive 4,669.53 shares of the common stock, without par value, of OFPI.        

   3. To amend and restate the Articles of Incorporation of OFPI to increase
the number of authorized shares of common stock from 20,000,000 to 100,000,000  
and to change the name of OFPI to "Spectrum Organic Products, Inc."             

 4. To amend and restate the OFPI 1995 Stock Option Plan to increase the
aggregate number of shares of OFPI common stock available for issuance under    
that plan from 625,000 shares to 4,500,000 shares.                              

    5. To transact such other business as may properly come before the special
meeting.                                                                        

     Only holders of record of OFPI common stock at the close of business on the
record date of July 29, 1999 will be entitled to notice of, and to vote at, the 
special meeting. The affirmative vote of a majority of the outstanding shares of
OFPI common stock entitled to vote at the special meeting is required to approve
and adopt the merger agreement.                                                 

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   If your shares are held of record by a broker, bank or other nominee, you
must instruct your broker, bank or other nominee on how to vote your shares, or 
else your shares will not be voted. If you attend the meeting, you may vote your
shares in person, which will revoke any previously executed proxy. FAILURE TO   
RETURN A PROPERLY EXECUTED PROXY CARD OR TO VOTE AT THE SPECIAL MEETING WILL    
GENERALLY HAVE THE SAME EFFECT AS A VOTE AGAINST THE MERGER.                    

                                    By Order of the Board of Directors

                            /s/  Richard R. Bacigalupi

                     Corporate Secretary

Morgan Hill, California                                                         
August 2, 1999                                                                  

YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL    
MEETING, PLEASE SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE   
ENCLOSED POSTAGE PREPAID ENVELOPE.                                              

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 JOINT PROXY STATEMENT
 FOR SPECIAL MEETINGS OF SHAREHOLDERS OF

ORGANIC INGREDIENTS, INC., SPECTRUM NATURALS, INC. AND
 ORGANIC FOOD PRODUCTS, INC.

 PROSPECTUS OF ORGANIC FOOD PRODUCTS, INC.
Up to 36,286,495 Shares of
Common Stock
 without par value

The Board of Directors of Organic Ingredients, Inc. and the Board of  
Directors of Organic Food Products, Inc. have approved an agreement to merge OI 
with and into OFPI, with OFPI as the surviving corporation. As a result of this 
merger, OFPI would issue to OI shareholders 39.5 shares of OFPI common stock for
each share of OI common stock that they own. The Board of Directors of Spectrum 
Naturals, Inc. and the Board of Directors of Organic Food Products, Inc. have   
approved an agreement to merge Spectrum with and into OFPI, with OFPI as the    
surviving corporation. As a result of this merger, OFPI would issue to Spectrum 
shareholders 4,669.53 shares of OFPI common stock for each share of Spectrum    
common stock that they own. OFPI common stock trades on the NASD OTC Bulletin   
Board system under the symbol "OFPI."                                           

The OI merger cannot be completed unless the OI and OFPI shareholders 
approve it. The OI Board of Directors has scheduled a special meeting for OI    
shareholders to vote on the OI merger as follows:                               

 August 24, 1999
11:00 a.m.

 Organic Ingredients, Inc.
331 Spreckels Drive, Suite F
 Aptos, California 95003

The Spectrum merger cannot be completed unless the Spectrum and OFPI  
shareholders approve it. The Spectrum Board of Directors has scheduled a special
meeting for Spectrum shareholders to vote on the Spectrum merger as follows:    

 August 24, 1999
11:00 a.m.

 Spectrum Naturals, Inc.
 133 Copeland Street
Petaluma, California 94952

The OFPI Board of Directors has scheduled a special meeting for OFPI  
shareholders to vote on the issuance of shares pursuant to the OI merger and    
Spectrum merger as follows:                                                     

 August 24, 1999
 8:30 a.m.

 Organic Food Products, Inc.
 550 Monterey Road
 Morgan Hill, California 95037

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This document gives you information about the proposed mergers. OI has
provided information about OI, Spectrum has provided the information about      
Spectrum and OFPI has provided the information about OFPI. Please see "Where You
Can Find More Information" on page 1 for additional information about OFPI on   
file with the Securities and Exchange Commission.                               

    This joint proxy statement/prospectus and the accompanying proxy cards are
first being mailed to OI, Spectrum and OFPI shareholders on or about August 2,  
1999.                                                                           

    The mergers involve risks to OI, Spectrum and OFPI shareholders. See "Risk
Factors" beginning on page 16.                                                  

     The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities or determined if this joint proxy  
statement/prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.                                                          

The date of this joint proxy statement/prospectus is ____________, 1999.

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TABLE OF CONTENTS 

                                                                        Page

FORWARD-LOOKING STATEMENTS...............................................   1   
.                                                                             
WHERE YOU CAN FIND MORE INFORMATION......................................   1   

SUMMARY  ................................................................   3   

      The Companies...................................................   3

      Reasons for the Mergers.........................................   3

      What OI Shareholders Will Receive in the OI Merger..............   4

What Spectrum Shareholders Will Receive in the                
       Spectrum Merger ...............................................   4

      Material Federal Income Tax Consequences........................   4

      The OI Special Meeting..........................................   4

      The Spectrum Special Meeting....................................   5

      The OFPI Special Meeting........................................   6

      Ownership of OFPI Following the Mergers.........................   7

      The Merger Agreements...........................................   7

      Conditions to the OI Merger.....................................   7

      Conditions to the Spectrum Merger...............................   8

      Termination of the OI Merger Agreement..........................   9

      Termination of the Spectrum Merger Agreement....................   9

      Dissenters' Rights..............................................   9

      Accounting Treatment............................................  10

SUMMARY SELECTED HISTORICAL FINANCIAL INFORMATION........................  11   

      OI Selected Historical Financial Data...........................  12

      Spectrum Selected Historical Financial Data.....................  12

      OFPI Selected Historical Financial Data.........................  13

SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA...........  14   

COMPARATIVE PER SHARE DATA...............................................  15   

PRICE RANGE OF COMMON STOCK..............................................  16   

RISK FACTORS.............................................................  17   

      Risks Relating to the Mergers...................................  17

      Risks Relating to OI............................................  18

      Risks Relating to Spectrum......................................  19

i.

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TABLE OF CONTENTS 
                                (CONTINUED)                             PAGE

      Risks Relating to OFPI..........................................  20

      Risks Relating to the Combined Company..........................  20

THE OI SPECIAL MEETING...................................................  26   

      Date, Time and Place............................................  26

      Purpose.........................................................  26

      Record Date and Outstanding Shares..............................  26

      Vote Required..................................................   26

      Proxies.........................................................  26

      Recommendation of OI Board of Directors.........................  26

THE SPECTRUM SPECIAL MEETING.............................................  27   

      Date, Time and Place............................................  27

      Purpose.........................................................  27

      Record Date and Outstanding Shares..............................  27

      Vote Required...................................................  27

      Proxies.........................................................  27

      Recommendation of Spectrum Board of Directors...................  27

THE OFPI SPECIAL MEETING.................................................  29   

      Date, Time and Place............................................  29

      Purpose.........................................................  29

      Record Date and Outstanding Shares..............................  29

      Vote Required...................................................  29

      Proxies.........................................................  30

      Recommendation of OFPI Board of Directors.......................  30

THE MERGERS..............................................................  31   

      Background of the Mergers.......................................  31

      OI's Reasons for the OI Merger.................................,  32

      Spectrum's Reasons for the Spectrum Merger......................  32

      OFPI's Reasons for the Mergers..................................  33

      Accounting Treatment............................................  33

      Material Federal Income Tax Consequences........................  34

ii

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TABLE OF CONTENTS 
                                (CONTINUED)                             PAGE

      Dissenters' Rights.............................................   36

THE OI AGREEMENT AND PLAN OF MERGER AND REORGANIZATION                          
      AND THE RELATED AGREEMENTS .....................................  39

      Effective Time; Effect of OI Merger.............................  39

      Conversion of Shares............................................  39

      Stock Ownership Following the OI Merger.........................  39

      Representations and Warranties..................................  40

Conduct of OFPI's Business and OI's Business Prior            
      to the OI Merger ...............................................  40

      Conduct of Business Following the OI Merger.....................  42

      No Solicitation.................................................  42

      Fees, Expenses and Termination Fees.............................  43

      Conditions to the OI Merger.....................................  43

      Termination of the OI Merger Agreement..........................  45

      Employment Agreements...........................................  46

      Shareholder Lock-up Agreements..................................  46

THE SPECTRUM AGREEMENT AND PLAN OF MERGER AND REORGANIZATION                    
      AND THE RELATED AGREEMENTS .....................................  47

      Effective Time; Effect of Spectrum Merger.......................  47

      Conversion of Shares............................................  47

      Treatment of Options and Warrants...............................  48

      Stock Ownership Following the Spectrum Merger...................  48

      Representations and Warranties..................................  48

Conduct of OFPI's Business and Spectrum's Business            
      Prior to the Spectrum Merger ...................................  49

      Conduct of Business Following the Spectrum Merger...............  51

      No Solicitation.................................................  51

      Fees, Expenses and Termination Fees.............................  53

      Conditions to the Spectrum Merger...............................  53

      Termination of the Spectrum Merger Agreement....................  54

      Employee Benefits...............................................  57

      Employment Agreements...........................................  57

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TABLE OF CONTENTS 
                                (CONTINUED)                             PAGE

      Shareholder Lock-up Agreements..................................  58

MANAGEMENT...............................................................  59   

Proposed Directors and Executive Officers of                  
      Combined Company ...............................................  59

      Compensation Committee Interlocks and Insider Participation.....  60

      Board Committees................................................  60

      Director Compensation...........................................  60

      Employment Agreements...........................................  60

Indemnification and Limitation of Director                    
      and Officers Liability .........................................  61

      Executive Compensation..........................................  62

      Option Grants in Last Fiscal Year...............................  63

Aggregate Option Exercises in Fiscal 1998 and                 
      June 30, 1998 Option Values ....................................  64

      Employee Benefit Plan...........................................  64

PRINCIPAL SHAREHOLDERS...................................................  66   

CERTAIN TRANSACTIONS.....................................................  68   

DESCRIPTION OF OI CAPITAL STOCK..........................................  70   

      OI Common Stock.................................................  70

DESCRIPTION OF SPECTRUM CAPITAL STOCK....................................  71   

      Spectrum Common Stock...........................................  71

DESCRIPTION OF OFPI CAPITAL STOCK........................................  72   

      OFPI Common Stock...............................................  72

      OFPI Preferred Stock............................................  72

COMPARISON OF RIGHTS OF HOLDERS OF OI COMMON STOCK, SPECTRUM                    
      COMMON STOCK AND OFPI COMMON STOCK .............................  74

      Authorized Capital..............................................  74

      Directors and Classes of Directors; Removal of Directors........  74

      Special Meetings of Shareholders................................  75

      Cumulative Voting...............................................  75

      Actions by Shareholder Written Consent..........................  75

      Amendment of Bylaws.............................................  76

OI MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION                  
      AND  RESULTS OF OPERATIONS .....................................  77

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TABLE OF CONTENTS 
                                (CONTINUED)                             PAGE

      Overview........................................................  77

Results of Operations for the Three Months Ended              
March 31, 1999 Compared to the Three Months Ended             
      March 31, 1998 .................................................  77

Results of Operations for the Year Ended December 31, 1998    
      Compared to the Year Ended December 31, 1997 ...................  77

      Liquidity and Capital Resources.................................  78

      Year 2000 Compliance............................................  78

      Seasonality.....................................................  79

      New Applicable Accounting Pronouncements........................  79

BUSINESS OF OI...........................................................  80   

      Overview........................................................  80

      Strategy........................................................  80

      Products........................................................  81

      Sales and Marketing.............................................  81

      Manufacturing...................................................  82

      Competition.....................................................  82

      Employees.......................................................  82

      Property........................................................  82

SPECTRUM MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                      
      CONDITION AND RESULTS OF OPERATIONS ............................  83

      Overview........................................................  83

Results of Operations for the Three Months Ended              
March 31, 1999 Compared to the Three Months Ended             
      March 31, 1998 .................................................  83

Results of Operations for the Year Ended December 31, 1998    
      Compared to the Year Ended December 31, 1997 ...................  84

      Liquidity and Capital Resources.................................  84

      Year 2000 Compliance............................................  84

      Seasonality.....................................................  85

      New Applicable Accounting Pronouncements........................  86

BUSINESS OF SPECTRUM.....................................................  87   

      Overview........................................................  87

      Products........................................................  87

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TABLE OF CONTENTS 
                                (CONTINUED)                             PAGE

      Markets and Customers...........................................  89

      Competition.....................................................  89

      Operations......................................................  90

      Marketing Strategy..............................................  90

      Trade Names and Trademarks......................................  90

      Government Regulation...........................................  91

      Employees.......................................................  91

OFPI MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                          
      CONDITION AND RESULTS OF OPERATIONS ............................  92

      Overview........................................................  92

Results of Operations for the Nine Months and the             
      Three Months Ended March 31, 1999 and 1998 .....................  92

Results of Operations for the Year Ended June 30, 1998        
      Compared to the Year Ended June 30, 1997 .......................  93

      Year 2000 Compliance............................................  94

      Seasonality.....................................................  95

      Liquidity and Capital Resources.................................  96

      New Applicable Accounting Pronouncements........................  96

      Related Party Transactions......................................  96

BUSINESS OF OFPI.........................................................  97   

      Overview........................................................  97

      Strategy........................................................  97

      Products........................................................  98

      Sales and Distribution..........................................  99

      Marketing and New Product Development........................... 100

      Manufacturing................................................... 100

      Competition..................................................... 100

      Trade Names and Trademarks...................................... 101

      Government Regulation........................................... 101

      Employees....................................................... 101

      Property........................................................ 101

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TABLE OF CONTENTS 
                                (CONTINUED)                             PAGE

      Legal Proceedings............................................... 102

CHANGE IN ACCOUNTANTS OF OFPI............................................ 103   

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA.................... 104   

EXPERTS  ................................................................ 109   

LEGAL MATTERS............................................................ 109   

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FORWARD-LOOKING STATEMENTS

Certain statements in this joint proxy statement/prospectus constitute
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), and Section 21B of the          
Securities Exchange Act of 1934, as amended (the "Exchange Act"). The reasons   
for the mergers discussed under the caption "The Mergers," statements about the 
expected impact of the mergers on OI's, Spectrum's and OFPI's businesses,       
financial performance and condition, accounting and tax treatment of OFPI       
related to the mergers are forward-looking statements. Further, any statements  
contained herein that are not statements of historical fact may be deemed to be 
forward-looking statements.                                                     

Without limiting the foregoing, the words "projects," "believes,"     
"anticipates," "plans," "expects," "intends" and similar expressions are        
intended to identify forward-looking statements. There are a number of important
factors that could cause the results of the combined company to differ          
materially from those indicated by such forward-looking statements, including   
factors related to the mergers, such as the risk that anticipated synergies will
not be realized, the significant transaction charges and the potential dilutive 
effect to holders of OI's, Spectrum's and OFPI's common stock that will result  
from the mergers, the effect of the mergers on customers and partners of OI,    
Spectrum and OFPI, and factors related to OI's, Spectrum's and OFPI's           
businesses, including a history of operating losses and uncertain profitability,
a significant debt load, significant fluctuations in operating results, the     
ability to recruit, train and retain qualified management and other personnel,  
product liability and insurance, as well as those additional factors set forth  
in this joint proxy statement/prospectus under the caption "Risk Factors."      
Neither OI, Spectrum and OFPI undertakes any obligation to update any           
forward-looking statements.                                                     

 WHERE YOU CAN FIND MORE INFORMATION

   OFPI is subject to the informational requirements of the Exchange Act and
files annual, quarterly and special reports, proxy statements and other         
information with the SEC. You may read and copy any reports, statements or other
information OFPI files at the SEC's public reference rooms in Washington, D.C., 
New York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 
for further information on the public reference rooms. OFPI's SEC filings are   
also available to the public from commercial document retrieval services and at 
the Website maintained by the SEC at www.sec.gov.                               

   OFPI has filed a registration statement to register with the SEC the OFPI
common stock to be issued to Spectrum shareholders in the Spectrum merger and to
the OI shareholders in the OI merger. This joint proxy statement/prospectus is  
part of that registration statement. As allowed by SEC rules, this joint proxy  
statement/prospectus does not contain all of the information you can find in the
registration statement or the exhibits to the registration statement.           

   If there is any contrary information in a previously filed document, then
you should rely on the information in this joint proxy statement/prospectus. All
information contained in this joint proxy statement/prospectus relating to OFPI 
has been supplied by OFPI, all information relating to OI has been supplied by  
OI, and all information relating to Spectrum has been supplied by Spectrum.     

     Neither OI nor Spectrum is subject to the informational requirements of the
Exchange Act and, as a result, OI and Spectrum do not file reports, proxy or    
informational statements or other information with the SEC.                     

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You should rely on the information contained in this joint proxy      
statement/prospectus to vote on the merger agreements and the mergers. We have  
not authorized anyone to provide you with information that is different from    
what is contained in this joint proxy statement/prospectus. You should not      
assume that the information contained in the joint proxy statement/prospectus is
accurate as of any date other than __________, 1999. This joint proxy           
statement/prospectus does not constitute an offer to sell or a solicitation of  
an offer to buy any securities, or the solicitation of a proxy, in any          
jurisdiction in which, or to any person to whom, it is unlawful to make any such
offer or solicitation.                                                          

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 SUMMARY

  This summary highlights selected information from this document and does
not contain all of the information that is important to you. To understand the  
mergers fully and for a more complete description of the legal terms of the     
mergers, you should read carefully this entire document. See "Where You Can Find
More Information" on page 1. We have included page references parenthetically to
direct you to a more complete description of the topics presented in this       
summary.                                                                        

The Companies                                                                   

Organic Ingredients, Inc.                                     
335 Spreckels Drive, Suite F                                  
Aptos, California  95003                                      
Telephone: (831) 685-6506                                     

   OI is a leading manufacturer and supplier of industrial, premium quality,
certified organic fruit and vegetable ingredients and vinegars to the natural   
foods industry.                                                                 

Spectrum Naturals, Inc.                                       
133 Copeland Street                                           
Petaluma, California 94952                                    
Telephone: (707) 778-8900                                     

    Spectrum is a leading manufacturer and marketer of organic and all natural
oils, vinegars, oil-based spreads and condiments under the "Spectrum Naturals"  
label and essential fatty acid nutritional supplements under the "Spectrum      
Essentials" label. Industrial ingredients are sold through its Spectrum         
Commodities division.                                                           

A condition to the merger between Spectrum and OFPI is that Spectrum  
Commodities, Inc., a California corporation, has previously merged with and into
Spectrum Naturals, Inc. OFPI has agreed that this condition will not be waived  
unless prior consent is obtained from the OFPI shareholders. Except as otherwise
noted, all information in this joint proxy statement/prospectus assumes the     
completion of the merger between Spectrum Commodities and Spectrum Naturals, and
any references to "Spectrum" refers to these two companies, as combined. See    
"The Spectrum Merger Agreement and Plan of Merger and Reorganization and the    
Related Agreements - Conditions to the Spectrum Merger."                        

Organic Food Products, Inc.                                   
550 Monterey Road                                             
Morgan Hill, California 95037                                 
Telephone: (408) 782-1133                                     

  OFPI manufactures and markets a line of organic food products, including
pasta sauces, salsas, dry cut pasta and children's meals, under the brand names 
"Millina's Finest," "Garden Valley Naturals," "Garden Valley Organics," "Grandma
Millina's" and "Parrot." OFPI also manufacturers private label food products and
markets an energy drink under the brand name "Energy Plus."                     

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Reasons for the Mergers (page 31)                                               

  Each of the Spectrum, OI and OFPI Boards of Directors has concluded that
the mergers will result in a combined company with substantially more resources 
and greater manufacturing, sales and distribution capabilities. Each of the     
Spectrum, OI and OFPI Boards of Directors believes that the mergers are fair to 
and in the best interests of their respective shareholders.                     

What OI Shareholders Will Receive in the OI Merger (page 38)                    

    If the OI merger is approved, holders of OI common stock will receive 39.5
shares of OFPI common stock in exchange for each share of OI common stock they  
own. OFPI will not issue fractional shares. OI shareholders will instead be paid
cash instead of fractional shares of OFPI common stock based on the market value
of OFPI common stock as reported on the NASD OTC Bulletin Board system or other 
applicable market or bulletin board system at the close of trading on the last  
trading day before the OI merger occurs.                                        

     You should not send in your OI stock certificates until instructed to do so
after the OI merger is completed.                                               

What Spectrum Shareholders Will Receive in the Spectrum Merger (page 46)        

   If the Spectrum merger is approved, holders of Spectrum common stock will
receive 4,669.53 shares of OFPI common stock in exchange for each share of      
Spectrum common stock they own. OFPI will not issue fractional shares. Spectrum 
shareholders will be paid cash instead of fractional shares of OFPI common stock
based on the market value of OFPI common stock as reported on the NASD OTC      
Bulletin Board system or other applicable market or bulletin board system at the
close of trading on the last trading day before the Spectrum merger occurs.     

     You should not send in your Spectrum stock certificates until instructed to
do so after the Spectrum merger is completed.                                   

Material Federal Income Tax Consequences (page 33)                              

     Each merger will be treated as a tax-free reorganization for federal income
tax purposes. Neither Spectrum shareholders nor OI shareholders will recognize  
gain or loss in the mergers, except for taxes on cash received in the mergers.  
The merger agreements do not require the parties to obtain a ruling from the IRS
as to the tax consequences of the mergers. As a condition to the closing of each
merger, each of OFPI, Spectrum and OI must receive opinions from its legal      
counsel that the mergers will be a tax-free reorganization for federal income   
tax purposes.                                                                   

     Tax matters are very complicated and the tax consequences of the mergers to
you will depend on the facts of your own situation. We urge you to consult your 
tax advisors for a full understanding of the tax consequences of the mergers to 
you.                                                                            

The OI Special Meeting (page 26)                                                

 If you are a OI shareholder, you will be asked to approve and adopt the
merger agreement at a special meeting of OI shareholders. The OI special meeting
will be held at the OI corporate offices at 335 Spreckels Drive, Suite F, Aptos,
California on August 24, 1999 at 11:00 a.m.                                     

Record Date; Voting Power (page 26)                                   

   You are entitled to vote at the special meeting if you owned shares of OI
common stock as of the close of business on July 29, 1999, the record date for  
the special meeting.                                                            

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     On the record date, there were 100,000 shares of OI common stock allowed to
vote at the special meeting. OI shareholders will have one vote for each share  
of OI common stock they owned on the record date.                               

Voting by Proxy (page 26)                                             

     You may vote on the OI merger by indicating on your proxy card how you want
to vote, and signing and mailing it in the enclosed return envelope. Please     
return your proxy as soon as possible so that your shares may be represented at 
the special meeting of the OI shareholders. If you sign and send in your proxy  
card and do not indicate how you wish to vote, your proxy will be counted as a  
vote in favor of the OI merger. If you do not vote, or you abstain, it will have
the effect of a vote against the OI merger.                                     

Votes Required (page 26)                                              

In order for the OI merger to proceed, a majority of the shares of OI 
common stock outstanding on the record date must vote to approve and adopt the  
OI merger agreement.                                                            

The Board's Recommendation to OI Shareholders (page 26)               

  The OI Board of Directors unanimously recommends that you vote "for" the
proposal to approve and adopt the OI merger agreement.                          

The Spectrum Special Meeting (page 27)                                          

   If you are a Spectrum shareholder, you will be asked to approve and adopt
the merger agreement at a special meeting of Spectrum shareholders. The Spectrum
special meeting will be held at the Spectrum corporate offices at 133 Copeland  
Street, Petaluma, California on August 24, 1999 at 11:00 a.m.                   

Record Date; Voting Power (page 27)                                   

You are entitled to vote at the special meeting if you owned shares of
Spectrum common stock as of the close of business on July 29, 1999, the record  
date for the special meeting.                                                   

On the record date, there were 5,000 shares of Spectrum common stock  
allowed to vote at the special meeting. Spectrum shareholders will have one vote
for each share of Spectrum common stock they owned on the record date.          

Voting by Proxy (page 27)                                             

  You may vote on the Spectrum merger by indicating on your proxy card how
you want to vote, and signing and mailing it in the enclosed return envelope.   
Please return your proxy as soon as possible so that your shares may be         
represented at the special meeting of the Spectrum shareholders. If you sign and
send in your proxy card and do not indicate how you wish to vote, your proxy    
will be counted as a vote in favor of the Spectrum merger. If you do not vote,  
or you abstain, it will have the effect of a vote against the Spectrum merger.  

Votes Required (page 27)                                              

  In order for the Spectrum merger to proceed, a majority of the shares of
Spectrum common stock outstanding on the record date must vote to approve and   
adopt the merger agreement.                                                     

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The Board's Recommendation to Spectrum Shareholders (page 27)         

    The Spectrum Board of Directors unanimously recommends that you vote "for"
the proposal to approve and adopt the Spectrum merger agreement.                

The OFPI Special Meeting (page 28)                                              

    If you are an OFPI shareholder, you will be asked to approve and adopt the
following:                                                                      

o    the Spectrum merger agreement and the Spectrum merger;           

o    the OI merger agreement and the OI merger;                       

o    amendment of OFPI's articles of incorporation to increase the    
       authorized number of shares of OFPI common stock from 20,000,000 to
100,000,000;                                                

   o    change of the name of OFPI to "Spectrum Organic Products, Inc."; and

   o    amendment of OFPI's 1998 Stock Option Plan to increase the number of
      shares of OFPI common stock available for issuance under that plan
from 625,000 to 4,500,000.                                  

Record Date; Voting Power (page 28)                                   

     You are entitled to vote at the special meeting if you owned shares of OFPI
common stock as of the close of business on July 29, 1999, the record date for  
the special meeting.                                                            

On the record date, there were __________ shares of OFPI common stock 
allowed to vote at the special meeting. OFPI shareholders will have one vote for
each share of OFPI common stock they owned on the record date.                  

Voting by Proxy (page 28)                                             

You may vote on the mergers, the increase in the authorized number of 
shares of common stock, the increase in the number of shares available under    
OFPI's stock option plan and the change of OFPI's name by indicating on your    
proxy card how you want to vote, and signing and mailing it in the enclosed     
return envelope. Please return your proxy as soon as possible so that your      
shares may be represented at the special meeting of the OFPI shareholders. If   
you sign and send in your proxy card and do not indicate how you wish to vote,  
your proxy will be counted as a vote in favor of the merger. If you do not vote,
or you abstain, it will have the effect of a vote against the mergers.          

Votes Required (page 28)                                              

   In order for the mergers, the increase in the authorized number of shares
of common stock, the increase in the number of shares available under OFPI's    
stock option plan and the change of OFPI's name to proceed, a majority of the   
shares of OFPI common stock outstanding on the record date must vote to approve 
and adopt each proposal. Approval and closing of the OI merger is a condition to
the closing of the Spectrum merger.                                             

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The Board's Recommendation to OFPI Shareholders (page 29)             

     The OFPI Board of Directors unanimously recommends that you vote "for" each
proposal. The OFPI Board of Directors currently intends that it will proceed    
with the OI merger only if the Spectrum merger is approved by the OFPI          
shareholders and there is a high probability that the conditions to closing the 
Spectrum merger will be met.                                                    

Ownership of OFPI Following the Mergers (pages 38 and 47)                       

 We anticipate that OI shareholders will receive approximately 3,950,000
shares of OFPI common stock in the OI merger based on the number of shares of OI
common stock outstanding on June 1, 1999. We anticipate that Spectrum           
shareholders will receive approximately 36,286,495 shares of OFPI common stock  
in the Spectrum merger based on the number of shares of Spectrum common stock   
outstanding on July 1, 1999. Based on those numbers, existing Spectrum          
shareholders will own approximately 73.8% of the OFPI common stock outstanding  
after the mergers, existing OI shareholders will own approximately 9.0% of the  
OFPI common stock outstanding after the mergers, and existing OFPI shareholders 
will own approximately 17.2% of the OFPI common stock outstanding after the     
mergers.                                                                        

     In the Spectrum merger, the exchange ratio between Spectrum and OFPI shares
is based upon the number of OFPI shares outstanding as of the closing of the    
Spectrum merger. Except as otherwise noted, all information in this joint proxy 
statement/prospectus is based upon the number of OFPI shares outstanding as of  
May 14, 1999. See "The OI Agreement and Plan of Merger and Reorganization and   
the Related Agreements--Conversion of Shares" and "The Spectrum Agreement and   
Plan of Merger and Reorganization and the Related Agreements--Conversion of     
Shares."                                                                        

The Merger Agreements (pages 38 and 46)                                         

The OI merger agreement is attached as Annex A to this document. We   
encourage you to read the OI merger agreement. It is the legal document         
governing the OI merger.                                                        

   The Spectrum merger agreement is attached as Annex B to this document. We
encourage you to read the Spectrum merger agreement. It is the legal document   
governing the Spectrum merger.                                                  

Conditions to the OI Merger (page 42)                                           

We will complete the OI merger only if we satisfy (or waive) several  
conditions, including the following:                                            

  o    each of OI and OFPI have completed a satisfactory investigation and
          review of the other party's business, financial condition, operations,
facilities, financial performance and prospects;            

  o    holders of a majority of the outstanding common stock of each of OI
and OFPI approve and adopt the OI merger agreement;         

o    all material authorizations, consents, orders or approvals of, or
    filings with, any government entity have been obtained or filed;

o    no court or government body or authority has acted to restrain or
prohibit the consummation of the OI merger;                 

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     o    each party's representations and warranties contained in the OI merger
agreement continue to be accurate in all material respects; 

     o    OI and OFPI have complied with their respective covenants contained in
the OI merger agreement in all material respects;           

  o    no material adverse effect has occurred with respect to OI or OFPI;

  o    OI's counsel and OFPI's counsel deliver legal opinions and opinions
   regarding some of the federal income tax consequences of the OI
merger;                                                     

   o    Joseph Stern, the president and a director of OI, shall have entered
into an employment agreement with OFPI;                     

     o    Kenneth A. Steel, Jr. and Charles Bonner have resigned as directors of
OFPI; and                                                   

     o    Jethren Phillips, John Battendieri, Neil Blomquist, Joseph Stern, Dean
        Nicholson and Steven Reedy have entered into lock-up agreements with
OFPI.                                                       

Conditions to the Spectrum Merger (page 52)                                     

    We will complete the Spectrum merger only if we satisfy (or waive) several
conditions, including the following:                                            

    o    each of Spectrum and OFPI have completed a satisfactory investigation
  and review of the other party's business, financial condition,
operations, facilities, financial performance and prospects;

o    holders of a majority of the outstanding common stock of each of 
      Spectrum and OFPI approve and adopt the Spectrum merger agreement;

o    all material authorizations, consents, orders or approvals of, or
    filings with, any government entity have been obtained or filed;

o    no court or government body or authority has acted to restrain or
prohibit the consummation of the Spectrum merger;           

    o    each party's representations and warranties contained in the Spectrum
      merger agreement continue to be accurate in all material respects;

o    Spectrum and OFPI have complied with their respective covenants  
        contained in the Spectrum merger agreement in all material respects;

  o    no material adverse effect has occurred with respect to Spectrum or
OFPI;                                                       

o    Spectrum's counsel and OFPI's counsel deliver legal opinions and 
         opinions regarding some of the federal income tax consequences of the
Spectrum merger;                                            

     o    Kenneth A. Steel, Jr. and Charles Bonner have resigned as directors of
OFPI;                                                       

o    OI has been acquired by OFPI;                                    

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o    Spectrum Commodities has been acquired by Spectrum Naturals;     

   o    No greater than five percent of OFPI's shareholders are eligible for
dissenter's rights under applicable laws;                   

     o    Jethren Phillips, John Battendieri, Neil Blomquist, Joseph Stern, Dean
        Nicholson and Steven Reedy have entered into lock-up agreements with
OFPI; and                                                   

o    OFPI has refinanced the existing credit and loan arrangements for
OFPI, OI and Spectrum.                                      

Termination of the OI Merger Agreement (page 44)                                

   The Board of Directors of both OI and OFPI can jointly agree to terminate
the OI merger agreement at any time without completing the OI merger. One or    
both companies can terminate the OI merger agreement if:                        

o    the OI merger is not completed by August 31, 1999;               

    o    the Board of Directors of either OI or OFPI fails to recommend the OI
merger;                                                     

   o    the required vote of the OI shareholders or OFPI shareholders is not
received;                                                   

o    a court or other government entity prohibits the OI merger; or   

o    either OI or OFPI breaches the OI merger agreement.              

Termination of the Spectrum Merger Agreement (page 53)                          

The Board of Directors of both Spectrum and OFPI can jointly agree to 
terminate the Spectrum merger agreement at any time without completing the      
Spectrum merger. One or both companies can terminate the Spectrum merger        
agreement if:                                                                   

o    the Spectrum merger is not completed by August 31, 1999;         

   o    the Board of Directors of either Spectrum or OFPI fails to recommend
the Spectrum merger;                                        

     o    the required vote of the Spectrum shareholders or OFPI shareholders is
not received;                                               

   o    a court or other government entity prohibits the Spectrum merger; or

o    either Spectrum or OFPI breaches the Spectrum merger agreement.  

Dissenters' Rights  (page 35)                                                   

Each of OI, Spectrum and OFPI is organized under California law. Under
California law, in connection with the OI merger, (i) shareholders of OI are    
entitled to exercise their dissenters' rights, which would require OI to        
purchase the dissenting OI shares for cash at their fair market value and (ii)  
shareholders of OFPI are entitled to exercise their dissenters' rights, which   
would require OFPI to purchase the dissenting OFPI shares for cash at their fair
market value, in both cases excluding any appreciation or depreciation as a     
result of the OI merger. Similarly, in connection with the Spectrum merger,     
California law provides that (i) shareholders of Spectrum are entitled to       

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exercise their dissenters' rights, which would require Spectrum to purchase the 
dissenting Spectrum shares for cash at their fair market value and (ii)         
shareholders of OFPI are entitled to exercise their dissenters' rights, which   
would require OFPI to purchase the dissenting OFPI shares for cash at their fair
market value, in both cases excluding any appreciation or depreciation as a     
result of the Spectrum merger.                                                  

Accounting Treatment (page 32)                                                  

The OI merger will be accounted for under the "purchase" method of    
accounting, meaning that the purchase price for OI will be allocated to the     
identifiable acquired assets and assumed liabilities of OI.                     

  The Spectrum merger will be accounted for as a reverse acquisition, with
Spectrum treated as the accounting acquiror. The purchase price for OFPI will   
then be allocated to the identifiable acquired assets and assumed liabilities of
OFPI.                                                                           

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 SUMMARY SELECTED HISTORICAL FINANCIAL INFORMATION

   We are providing the following information to aid you in your analysis of
the financial aspects of the mergers. With respect to OI, we derived this       
information from audited financial statements for the year ended December 31,   
1998 included elsewhere in this document, unaudited financial statements for the
year ended December 31, 1997, not included elsewhere in this document, and      
unaudited financial statements for the three months ended March 31, 1999 and    
1998, included elsewhere in this document. With respect to Spectrum, we derived 
this information from audited financial statements for the two years ended      
December 31, 1998, and unaudited financial statements for the three months ended
March 31, 1999 and 1998 included elsewhere in this document. This information is
only a summary, and you should read it in conjunction with OI's and Spectrum's  
historical financial statements (and related notes) and Management's Discussion 
and Analysis of Financial Condition and Results of Operations, contained        
elsewhere in this joint proxy statement/prospectus.                             

  With respect to OFPI, we derived this information from audited financial
statements for the two years ended June 30, 1998 and unaudited financial        
statements for the nine months ended March 31, 1999 and 1998, included elsewhere
in this document. This information is only a summary, and you should read it in 
conjunction with OFPI's historical financial statements (and related notes) and 
Management's Discussion and Analysis of Financial Condition and Results of      
Operations contained elsewhere in this joint proxy statement/prospectus and in  
the annual reports, quarterly reports and other information on file with the    
SEC. See "Where You Can Find More Information" on page 1.                       

    Basic earnings (loss) per share is calculated by dividing earnings or loss
for the period by the weighted average number of shares actually outstanding    
during the periods presented. Diluted earnings (loss) per share also includes   
shares resulting from exercise of options and warrants that have a dilutive     
effect - that is, shares that would decrease earnings per share. Such potential 
common stock equivalents are not considered, however, if they would have the    
effect of decreasing loss per share, or if the exercise price is higher than the
current market price.                                                           

   For OI and Spectrum, historical income per share and book value per share
are calculated based on the equivalent number of combined OFPI shares that will 
be issued to OI and Spectrum shareholders in exchange for their current         
holdings. For OI, the equivalent shares are calculated by multiplying actual    
outstanding and weighted averages by the OI exchange ratio of 39.5 shares of    
combined OFPI stock for each share of OI stock. For Spectrum, the equivalent    
shares are calculated by multiplying actual outstanding and weighted averages by
the Spectrum exchange ratio of 4,669.53 shares of combined OFPI stock for each  
share of Spectrum stock. For OFPI, historical income (loss) per share and book  
value per share are based on actual outstanding and weighted average shares for 
the periods presented. The pro forma combined loss per share and book value per 
share are based on the equivalent number of combined OFPI shares that will be   
outstanding after the mergers.                                                  

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                                                        [Enlarge/Download Table]

                                       OI Selected Historical Financial Data                                       
                                     (in thousands, except per share amounts)                                      

                                                      Three Months Ended                     Year Ended            
                                                          March 31,                          December 31,          
                                                   ------------------------------------------------------------    
                                                    1999             1998               1998              1997     
                                                    ----             ----               ----              ----     
                                                                                                                   
Historical Statement                                                                                               
of Operations Data:                                                                                                
Total revenues ..............................      $1,324            $1,964            $5,789            $5,319    
Net income ..................................        --              $   87            $   71            $  334    
Income per share, basic and diluted .........        --              $ 0.02            $ 0.02            $ 0.09    
Equivalent weighted average .................       3,950             3,950             3,950             3,950    
shares, basic and diluted                                                                                          

                                                   March 31,               December 31                             
Historical Balance                                   1999             1998              1997                       
Sheet Data:                                        --------          -----------------------                       
Working capital ...............................    $  348            $  371            $  596                      
Total assets ..................................    $2,884            $2,827            $3,972                      
Long-term debt ................................    $  205            $  240              --                        
Total shareholders' equity ....................    $  421            $  421            $  912                      

                                    Spectrum Selected Historical Financial Data                                    
                                     (in thousands, except per share amounts)                                      

                                                      Three Months Ended                      Year Ended           
                                                           March 31,                          December 31,         
                                                   --------------------------          --------------------------- 
                                                     1999              1998              1998              1997    
Historical Statement                                                                                               
of Operations Data:                                                                                                
Total revenues ...............................     $  6,506          $  5,778          $ 23,951           $ 20,392 
Net income ...................................     $    236          $    107          $    403           $    471 
Income per equivalent share, basic and                                                                             
diluted ......................................     $   0.01          $   --            $   0.01           $   0.01 
Equivalent weighted                                                                                                
average shares, basic and diluted ............       32,336            32,336            32,336             32,336 

                                                   March 31,                December 31,                           
                                                     1999             1998              1997                       
                                                   --------          --------------------------                    
Historical Balance                                                                                                 
Sheet Data:                                                                                                        
Working capital ..............................     $    880          $    467          $    251                    
Total assets .................................     $  8,390          $  7,226          $  6,957                    
Long-term debt ...............................     $  3,091          $  2,603          $  2,472                    
Total shareholders' equity (deficit) .........     $    377          $    141          $   (140)                   

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                                      OFPI Selected Historical Financial Data                                      
                                     (in thousands, except per share amounts)                                      

                                                    Nine Months Ended                            Year Ended        
                                                         March 31,                                June 30,         
                                               ----------------------------            ----------------------------
                                                 1999                1998                1998                1997  
                                                 ----                ----                ----                ----  
Historical Statement                                                                                               
of Operations Data:                                                                                                
Total revenues ...........................     $  8,015            $  8,208            $ 12,304            $ 11,379
Net income (loss) ........................       (3,670)               (723)             (4,619)                 55
Earnings (loss) per equivalent ...........        (0.50)              (0.12)              (0.69)               0.01
share, basic and diluted                                                                                           
Weighted average equivalent ..............        7,276               6,196               6,697               5,229
shares, basic and diluted                                                                                          

                                                March 31,                  December 31                             
                                                  1999               1998                1997                      
                                               ----------          ----------------------------                    

Historical Balance                                                                                                 
Sheet Data:                                                                                                        
Working capital (deficit)  ...............     $   (991)           $  1,725            $   (487)                   
Total assets .............................     $  4,412            $  7,256            $  8,951                    
Total long-term debt .....................     $     10            $     34            $    497                    
Total shareholders' equity ...............     $    207            $  3,877               2,616                    


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SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA

 The following selected unaudited pro forma combined condensed financial
data of OI, Spectrum and OFPI is derived from the unaudited pro forma combined  
condensed financial statements and should be read in conjunction with such pro  
forma statements and the notes thereto, which are included elsewhere in this    
joint proxy statement/prospectus. For pro forma purposes the financial          
statements of OFPI for the fiscal year ended June 30, 1998 have been restated to
reflect a December 31 year end and have been combined with the financial        
statements of OI and Spectrum for the year ended December 31, 1998. For the     
three months ended March 31, 1999, the financial statements of OFPI have been   
combined with the financial statements of OI and Spectrum for the three months  
ended March 31, 1999. The pro forma combined statement of operations data       
assumes that the mergers occurred as of January 1, 1998 and the pro forma       
combined balance sheet data assumes that the mergers occurred as of March 31,   
1999. The pro forma data is presented for illustrative purposes only and is not 
necessarily indicative of the operating results or financial position that would
have occurred if the mergers had been consummated, nor is it necessarily        
indicative of future operating results or financial position. See "Unaudited Pro
Forma Combined Condensed Financial Data" included elsewhere in this joint proxy 
statement/prospectus.                                                           

                                                        [Enlarge/Download Table]


                                                   Three Months                   Year Ended        
                                                   March 31, 1999              December 31, 1998    
                                                   --------------              -----------------    
Pro Forma Combined                                                (in  thousands,                   
Statement of Operations Data:                               except per share amounts)               

                                                                                                    
Total revenues....................................    $10,339                       $ 41,800        
Net loss..........................................    $  (360)                      $ (7,034)       
Earnings (loss) per share, basic and diluted          $ (0.01)                      $  (0.16)       
Weighted average equivalent                                                                         
shares, basic and diluted.........................     43,562                         42,983        

                                                                        March 31, 1999              
                                                             -------------------------------------  
Pro Forma Combined                                          (in thousands, except per share amounts)
Balance Sheet Data:                                                                                 
Cash, cash equivalents and short-term investments                         $     279                 
Working capital ..................................                        $     119                 
Total assets......................................                        $  22,985                 
Total long-term debt..............................                        $   3,306                 
Total shareholders' equity........................                        $   8,304                 
Book value per share..............................                        $    0.19                 

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COMPARATIVE PER SHARE DATA
 (unaudited)

   The following table sets forth information on the earnings and book value
per common share for OI, Spectrum and OFPI on a historical and pro forma        
combined basis and indicates the relative earnings and book values of the       
companies for the periods covered.                                              

 Historical and pro forma book value per share is calculated by dividing
shareholders' equity at the end of the period by the number of common shares    
outstanding at the end of the period. For OI and Spectrum, historical income per
share is calculated based on the equivalent number of combined OFPI shares that 
will be issued to OI and Spectrum shareholders in exchange for their current    
holdings. For OI, the equivalent shares are calculated by multiplying actual    
outstanding and weighted averages by the OI exchange ratio of 39.5 shares of    
combined OFPI stock for each share of OI stock. For Spectrum, the equivalent    
shares are calculated by multiplying actual outstanding and weighted averages by
the Spectrum exchange ratio of 4,669.53 shares of combined OFPI stock for each  
share of Spectrum stock.                                                        

                                                        [Enlarge/Download Table]


                                                              Three Months Ended            Year Ended         
                                                                 March 31,                 December 31,        
                                                          -------------------------   -------------------------
                                                            1999             1998        1998             1997 
                                                            ----             ----        ----             ---- 
                                                                                                               
OI historical                                                                                                  
Income per equivalent share, ............................ $   0.00         $   0.02   $   0.02         $   0.05
  basic and diluted                                                                                            
Book value per equivalent share ......................... $   0.11                    $   0.11         $   0.20

Spectrum historical                                                                                            
Income per equivalent share, ............................ $   0.01         $   0.00   $   0.01         $   0.01
  basic and diluted                                                                                            
Book value per equivalent share ......................... $   0.01                    $   0.00         $   0.00

                                                              Nine Months Ended              Year Ended        
                                                                  March 31,                    June 30,        
                                                          -------------------------   -------------------------
                                                            1999             1998        1998            1997  
                                                            ----             ----        ----            ----  
OFPI historical                                                                                                
Earnings (loss) per share, .............................. $  (0.50)        $  (0.12)  $  (0.69)        $   0.01
  basic and diluted                                                                                            
Book value per share .................................... $   0.03                    $   0.53         $   0.49

                                                               Three Months Ended            Year Ended        
                                                                 March 31, 1999          December 31, 1998     
                                                                 --------------          -----------------     
Pro Forma Combined                                                                                             
Loss per equivalent share, basic and diluted ............        $  (0.01)                  $  (0.16)          
Book value per equivalent share .........................        $   0.19                                      

     The information set forth above is only a summary and you should read it in
conjunction with the Unaudited Pro Forma Condensed Combined Financial Statements
on pages 100 through 103 and the respective audited and unaudited financial     
statements of OI, Spectrum and OFPI.                                            

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 PRICE RANGE OF COMMON STOCK

 Shares of OFPI's common stock are listed on the NASD OTC Bulletin Board
system under the symbol "OFPI." The shares of OFPI common stock issued in       
connection with the merger will also be listed on the NASD OTC Bulletin Board   
system. The table below provides, for the calendar quarters indicated, the      
reported high and low bid prices of OFPI's common stock as reported on the      
Nasdaq SmallCap Market through May 26, 1999 and on the NASD OTC Bulletin Board  
system thereafter. These prices represent interdealer prices without retail     
mark-up, markdown or commission, and may not necessarily represent actual       
transactions.                                                                   

                                                          High           Low
                                                          ----           ---
FY 1998                                                                         
    First Quarter ended September 30, 1997 ............  $4.3125       $3.8750
(commencing August 12, 1997)                                          
    Second Quarter ended December 31, 1997 ............   4.5625        2.8750
    Third Quarter ended March 31, 1998 ................   3.6250        2.6250
    Fourth Quarter ended June 30, 1998 ................   4.2500        3.0000

FY 1999                                                                         
    First Quarter ended September 30, 1998 ............   3.7500        0.9688
    Second Quarter ended December 31, 1998 ............   1.0625        0.3750
    Third Quarter ended March 31, 1999 ................   1.8125        0.5625
    Fourth Quarter ended June 30, 1999 ................   1.6875        0.5318
    Period from July 1, 1999 to July 21, 1999 .........   0.8750        0.6875

    On February 17, 1999, the full trading day prior to the date of the public
announcement of the proposed mergers, OFPI's common stock closed at $0.75 per   
share. On July 21, 1999, the closing bid price for OFPI's common stock was $0.75
per share. As of June 3, 1999, OFPI had 47 shareholders of record.              

OI is a privately owned company, and, therefore, no market value      
information on its stock is available. As of July 1, 1999, OI had two           
shareholders of record.                                                         

Spectrum is a privately owned company, and, therefore, no market value
information on its stock is available. As of July 1, 1999, Spectrum had one     
shareholder of record.                                                          

    Because the market price of OFPI common stock changes, the market value of
the shares to be issued in the mergers may increase or decrease at any time. See
"Risk Factors."                                                                 

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RISK FACTORS

     Certain important factors, in addition to those discussed under the caption
"Risk Factors" and elsewhere in this document, could affect the future results  
of the combined company and could cause those results to differ materially from 
those expressed in our forward-looking statements. In addition, we do not have  
any intention or obligation to update forward-looking statements after we       
distribute this document, even if new information, future events or other       
circumstances have made them incorrect or misleading.                           

   You should carefully consider the following factors in evaluating whether
to vote to approve the merger agreements. Keep in mind that the risks described 
below are not the only risks facing OI, Spectrum and OFPI or the combined       
company.                                                                        

Risks Relating to the Mergers                                                   

We may not achieve the intended synergies as a combined company. OI,  
Spectrum and OFPI have entered into the merger agreements with the expectation  
that the mergers will result in benefits to all three companies through the     
integration of the companies' operations. The integration of operations will    
require, among other things, that we leverage the companies' manufacturing      
capabilities and combine the sales and marketing operations. The difficulties of
such integration may be increased by a number of factors, including the         
following:                                                                      

  o    geographical separation of the three companies and their employees;

o    potential incompatibility of business cultures;                  

    o    distraction of management's attention from the day-to-day business of
the combined company;                                       

o    loss of key employees and management; and                        

    o    integration of various marketing and branding strategies could result
in increased write-offs of inventory as obsolete.           

We cannot be certain that this integration will be achieved quickly or
efficiently. If we fail to integrate the three companies quickly and            
efficiently, the combined company's business and results of operations could be 
significantly harmed.                                                           

  The mergers will result in dilution to our shareholders. The issuance of
OFPI common stock in the mergers dilute the percentage ownership of the existing
OFPI shareholders in the combined company and will reduce OI's and Spectrum's   
net income per share. This dilution could reduce the market price of OFPI's     
common stock unless and until the combined company achieves revenue growth or   
cost savings and other business economies sufficient to offset the effect of    
such issuance. We cannot guarantee that we will achieve net revenue growth      
together with cost savings or other business economies as a result of the       
mergers or that you will achieve greater returns as an OFPI shareholder. Upon   
completion of the mergers, existing Spectrum shareholders will own approximately
73.8% of the OFPI common stock outstanding after the mergers, existing OI       
shareholders will own approximately 9.0% of the OFPI common stock               
then-outstanding, and existing OFPI shareholders will own approximately 17.2% of
the OFPI common stock then-outstanding.                                         

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    Amortization of goodwill may delay profitability. For accounting purposes,
Spectrum is treated as the purchaser since holders of Spectrum stock will       
receive OFPI shares representing a majority of the combined equity. It is       
estimated that the market value of the OFPI common stock to be issued in the    
mergers to holders of OI stock, or to be held by current holders of OFPI stock, 
exceeds the identifiable tangible assets less liabilities assumed of OI and OFPI
by approximately $7,678,000. In accordance with generally accepted accounting   
principles, the increase in this amount over existing OI goodwill of            
approximately $263,000 at March 31, 1999 will be recorded as additional goodwill
and amortized over the next 12.5 years. This amortization will result in an     
additional annual charge to earnings of approximately $593,000, which may       
significantly decrease operating earnings and delay OFPI's return to            
profitability, as well as adversely impact the market value of OFPI's common    
stock in any given period.                                                      

     Shares of our common stock eligible for sale may reduce our stock price. In
connection with the mergers, we estimate that an aggregate of approximately     
36,286,495 newly-issued shares of OFPI common stock will be issued to current OI
and Spectrum shareholders. Certain OI, Spectrum and OFPI shareholders, who      
together will beneficially own 40,124,260 shares of OFPI, have agreed to refrain
from selling their OFPI common stock until the first anniversary of the closing 
date of the mergers. The future availability of this substantial number of      
additional shares of OFPI common stock for sale in the market could decrease the
per share market price of OFPI's common stock.                                  

     Current contract negotiations with vendors may not be signed if the mergers
are not completed. OI is currently in negotiations with numerous vendors to     
obtain exclusive sales and marketing contracts for new product lines that may be
negatively impacted or may not occur if the mergers are not completed. These    
contracts depend on certain purchase needs that would not exist if OI does not  
merge with OFPI and Spectrum.                                                   

The rights of OI shareholders will change. Following the OI merger, OI
shareholders will become OFPI shareholders. There are important differences     
between the rights of OI shareholders and the rights of OFPI shareholders. For a
description of these differences, see "Comparisons of Rights of Holders of OI   
Common Stock, Spectrum Common Stock and OFPI Common Stock."                     

 The rights of Spectrum shareholders will change. Following the Spectrum
merger, Spectrum shareholders will become OFPI shareholders. There are important
differences between the rights of Spectrum shareholders and the rights of OFPI  
shareholders. For a description of these differences, see "Comparisons of Rights
of Holders of OI Common Stock, Spectrum Common Stock and OFPI Common Stock."    

Risks Relating to OI                                                            

   OI is dependent upon its food broker for sales and marketing capabilities
and its relationships in the organic food industry. OI relies significantly on  
Beta Pure Foods, its food broker, to market and sell OI's products. Beta        
utilizes its contacts and relationships in the organic food industry to assist  
OI in expanding its presence in various market segments. If Beta is unable to   
successfully market and sell OI's products, or if OI's relationship with Beta is
terminated for any reason, OI may be unable to find a substitute partner to     
provide such marketing and sales services or develop these capabilities and     
relationships themselves.                                                       

     OI is dependent upon a small number of customers. Three customers accounted
for approximately 47% of OI's revenues in 1998 and three customers accounted for
approximately 40% of OI's revenues in the first three months of 1999. In the    
past, OI has derived a substantial amount of its revenues from a small number of
customers, and its list of large customers can change significantly from year to
year. Accordingly, if this customer turnover continues, the loss of its larger  

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customers will adversely affect its results of operations and OI will need to   
continue to obtain similarly large orders from new customers. The failure to    
retain its large customers or the failure to continue to attract new large      
customers will harm OI's business.                                              

OI is dependent upon its suppliers for organic raw materials. In many 
cases, OI relies on its suppliers to provide significant quantities of organic  
raw materials for a particular OI product. For example, OI purchased            
approximately 47% of its products from two suppliers in 1998. Further, one      
supplier provides OI with all of its organic white grape juice concentrate.     
Organic white grape juice concentrate constituted approximately 23% of OI's     
revenues in 1998 and approximately 24% of OI's revenues for the first three     
months of 1999. If the supply arrangements between OI and its larger suppliers  
were to be terminated for any reason, OI may be unable to find substitute       
sources for those raw materials in a timely manner, or at all. Failure to       
replace these sources in a timely manner would adversely impact OI's business.  

   OI is subject to fluctuations in the cost of manufacturing capability. OI
does not own, or have long-term leases for, any food processing facilities, and 
instead has arrangements to pay for such facilities on an as-you-go basis.      
Accordingly, OI may be unable to obtain sufficient processing and manufacturing 
capacity for its products on acceptable terms, or at all. If OI is unable to    
obtain such capacity on a timely basis, as needed and on acceptable terms, its  
business will be harmed.                                                        

Risks Relating to Spectrum                                                      

    Spectrum has debt obligations that might require a significant issuance of
common stock in the event of a default. In September 1997, Spectrum repurchased 
5,000 shares of its outstanding common stock in exchange for a $1,621,000       
promissory note payable to a former shareholder and an additional obligation of 
approximately $613,000 relating to payment of taxes and a bonus. See footnote 7 
to Spectrum's audited financial statements for the year ended December 31, 1998.
Upon consummation of the mergers these obligations will become obligations of   
the combined company, and the stock redemption agreement will provide that in   
the event of a default on the payments the holder of the promissory note can    
require the combined company to issue OFPI shares in satisfaction of the debt   
measured by 90% of the mean between the bid and ask price for the ten trading   
days preceding the default.                                                     

 Spectrum's supplement oils and oil-based spreads businesses depend upon
technology license agreements. Spectrum has entered into a technology license   
agreement with Nimbus Publications, Inc. that gives Spectrum a worldwide        
exclusive license to commercialize specified Nimbus inventions relating to the  
extraction and refinement of oils from nuts, seeds, vegetable and marine        
materials. Spectrum believes the license agreement is material to the production
and marketing of its supplement oil products. In addition, Spectrum has an      
agreement with OGAM, a United Kingdom-based research and development company and
the developer of the patented process for manufacturing "Spectrum Spread," for  
the North American natural and specialty food markets. The OGAM agreement       
provides Spectrum with a license for these markets, for which Spectrum pays     
royalties to OGAM. The loss of either of these licenses could have a material   
adverse effect on Spectrum's sales and operations.                              

     Spectrum's consulting arrangement with OFPI may adversely impact Spectrum's
business if the mergers are not completed. As of May 1999, Spectrum has a       
management contract with OFPI to market and sell specified inventory that it    
acquired from OFPI. If the mergers are not completed, either party has the right
to terminate the contract, in which case Spectrum would have a large amount of  
juice and related products in inventory that would not be compatible with its   
core business. Termination of that contract before Spectrum is able to sell the 
former OFPI inventory could adversely affect Spectrum's financial condition.    

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Risks Relating to OFPI                                                          

OFPI has limited financing resources to meet immediate working capital
requirements. OFPI's operating losses have nearly exhausted the cash available  
under its current loan agreement. The reduced marketing programs and inventory  
levels caused by the limited cash available has resulted in decreased sales and 
increased production costs due to the inefficiencies associated with smaller    
production runs. As a result of the deterioration of its business, OFPI expects 
to be in default of certain of its annual loan covenants as of its June 30, 1999
year end. OFPI is currently in default under debt agreements with two former    
shareholders in an aggregate amount of $497,238.                                

In connection with the merger agreements OFPI has agreed not to pursue
incurring new debt or to sell its assets. Accordingly, given its current        
financial situation and length of time required to complete the mergers, if the 
mergers do not occur, OFPI would have to immediately obtain additional capital  
and would have very limited financing alternatives given its operating history  
and financial position.                                                         

    OFPI's settlement of the litigation with Global Natural Brands, Ltd. could
reduce cash available for its operations and its reduce earnings. In October    
1998, Global Natural Brands, Ltd. brought suit against OFPI, including its      
officers and directors, following OFPI's termination of the management services 
agreement between OFPI and Global. While OFPI intends to defend itself          
vigorously, it has recorded a reserve for an anticipated settlement. Payment of 
a settlement may significantly reduce cash available for working capital and any
settlement greater than the amount reserved would decrease earnings in the      
period the settlement was reached. See "Business of OFPI--Legal Proceedings."   

OFPI's sales are concentrated in a limited number of markets. OFPI    
distributes its products in a limited number of markets, which exposes it to    
fluctuations caused by factors such as adverse economic conditions and changing 
consumer preferences in these particular markets.                               

 OFPI's consulting arrangement with Spectrum may adversely impact OFPI's
business if the mergers are not completed. Spectrum has a management contract   
with OFPI to market and sell specified inventory that it acquired from OFPI. If 
the mergers are not completed, either party could terminate the contract and    
OFPI would have to purchase inventory from Spectrum or have products produced by
copackers. In addition, customers accounts production planning would need to be 
setup in OFPI's systems, adversely effecting customer relations and requiring   
additional working capital. Termination of the contract before Spectrum is able 
to sell its current inventory could adversely affect OFPI's customer service    
levels and reduce sales.                                                        

Risks Relating to the Combined Company                                          

   We have significant debt and credit obligations and may be unable to meet
them. We will continue to be highly leveraged following the mergers with OI and 
Spectrum. As a condition to closing the Spectrum merger, we will replace OFPI's,
OI's and Spectrum's existing credit facilities with a single credit facility for
the combined company. In order to obtain this financing it will be necessary to 
encumber our assets, which could be lost in the event of a default.             

    The combined company's cash flow may not be sufficient to service the debt
obligations under the new credit facility and meet the continuing obligations of
OFPI, OI and Spectrum. Additional cash demands that may increase this risk      
include continued losses from our operations, settlement of the Global          
litigation, cash requirements of purchase contracts and losses from unexpected  
changes in the current business environment.                                    

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In the event future cash flow is insufficient to meet working capital 
needs, we may be required to obtain additional financing or raise capital       
through the issuance of securities in private or public transactions. The terms 
and conditions required to obtain the additional capital may not be available to
us on favorable terms, or at all. Moreover, we cannot be certain that we will be
able to meet our future cash flow requirements or obtain future financing.      

  Trading of OFPI's stock has recently been moved from the Nasdaq SmallCap
Market to the NASD OTC Bulletin Board. Trading on the NASD OTC Bulletin Board   
system will likely make it difficult for holders of OFPI common stock to achieve
liquidity for their investment. The OTC Bulletin Board system historically has  
provided less trading volume than the Nasdaq SmallCap Market or any of the      
larger markets such as the Nasdaq National Market. In addition, the lower       
trading volume of OFPI's stock on the OTC Bulletin Board has resulted in and is 
expected to continue to result in increased volatility in OFPI's stock price.   

    We depend upon our executive officers and key employees. OFPI's operations
depend upon its ability to hire and retain qualified personnel with experience  
in the natural and organic food products industry. There is competition for such
personnel, and there can be no assurance that OFPI will be successful in this   
regard. OFPI's operations are also dependent upon the continued services of its 
executive officers. Since March 1998, OFPI has experienced significant turnover 
and has lost a number of its executive officers and directors, including its    
former Chief Executive Officer and Chief Financial Officer. The current board of
directors and executive management team has only been together for a short      
period of time. The loss of the services of any of these executive officers,    
whether as a result of death, disability or otherwise, would harm OFPI's        
business. OFPI currently has an employment agreement with its Chief Executive   
Officer and, upon the completion of the mergers, will have employment agreements
with its Chief Executive Officer, Chief Financial Officer, President of Retail  
Brands, President of Industrial Ingredients and Vice President of Product       
Development. After the mergers, OFPI will have key person life insurance on the 
life of its Chief Executive Officer in the face amount of $1,000,000 and on the 
life of its President of Retail Brands in the face amount of $500,000. OFPI does
not currently have and, following the mergers, will not have any key person     
insurance for any other officers. See "Certain Transactions."                   

   Our net revenues and operating results may fluctuate. OFPI's net revenues
and operating results may fluctuate significantly because of a number of        
factors, some of which are outside OFPI's control. These factors may include:   

o        unfavorable economic conditions;                     

o        decreased consumer demand for organic food products; 

o        increased price competition;                         

o        fluctuations in market prices of raw materials;      

o        weather conditions;                                  

o        availability of water supply;                        

o        unanticipated or increased expenses; and             

o        introduction of new products by competition.         

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    Based on the preceding factors, OFPI may experience a shortfall in revenue
or earnings or otherwise fail to meet public market expectations, which could   
materially adversely affect OFPI's business, financial condition and the market 
price of OFPI's common stock.                                                   

   Our operating results depend upon the cost of raw materials, market price
fluctuations and our suppliers. OFPI's operating results and financial condition
may be adversely affected by market fluctuations in the cost and availability of
its raw materials, particularly whole and processed organic tomatoes. Raw       
materials costs are determined by a constantly changing market upon which OFPI  
has no control. OFPI often enters into fixed price contracts to purchase a      
portion of its organic tomatoes. Nevertheless, cost fluctuations in the open    
market could increase OFPI's product costs (for products not covered by fixed   
price contracts) and adversely affect its operations. Moreover, market price    
declines for raw materials which are covered by fixed price contracts would     
increase OFPI's product costs relative to its competitors and reduce its gross  
profits on finished goods. While many raw materials are available from a number 
of sources, OFPI currently purchases its organic tomato products from only two  
suppliers and has written agreements covering only a portion of its anticipated 
tomato product purchases. One of these suppliers accounted for approximately 82%
of OFPI's total purchases of tomato products for the year ended June 30, 1998.  
One supplier accounted for approximately 84% or more of the OFPI's total        
purchases of tomato products for the nine months ended March 31, 1999. Any      
interruption in raw materials supply (caused by factors such as drought, insect 
infestation or the like) would interrupt OFPI's production and adversely affect 
its operations. Overcontracting for organic tomatoes or other raw materials in  
order to fix prices could cause cash flow difficulties until the excess raw     
materials are processed and sold.                                               

     We face intense competition in the food products industry. The organic food
and health food industries in general and the pasta sauce and pasta, salsa,     
condiment and fruit juice businesses in particular are highly competitive, and  
there are numerous multinational, national, regional and local firms that       
currently compete, or are capable of competing, with us. In the non-organic     
pasta sauce market, our competitors include The Campbell's Soup Company, through
its Prego brand, Unilever Canada Limited, through its Ragu brand, Borden, Inc., 
through its Classico brand, and Newman's Own. In the non-organic salsa market,  
we face competition from Campbell's Soup's Pace brand, the Old El Paso brand of 
International Home Foods, Inc. and the La Victoria brand of products of         
Authentic Specialty Foods (DESC). Our competitors in the non-organic condiments 
market include H.J. Heinz Company, Reckitt & Colman Inc., which markets French's
mustard, and International Home Foods, which markets Gulden's mustard. Our      
competition in the fruit juice market includes The Coca-Cola Company, through   
its Minute Maid brand, and Del Monte Foods International, Inc. We compete with  
national cut pasta manufacturers such as Borden, through its Ravarino & Freschi 
brand, and New World Pasta Company, which sells pasta under the American Beauty 
and Ronzoni brands.                                                             

    We also compete with DeBoles, which makes a line of pastas and organic and
natural pasta sauces. In the organic salsa market, our competitors include      
Simply Natural, Small Planet Foods, L.L.C.'s Muir Glen line of products, and    
Enrico. We face competition in the natural food condiment market from Eden,     
Canoleo, Nasoya, Annie's, and Braggs. In the organic or natural fruit juice     
market, we face competition from Odwalla, Inc. and J.M. Smucker Company's       
Knudsen brand of drinks.                                                        

In the specialty culinary oils market, our competitors include Hain,  
Loriva, Anglia (Oils of the World), Consorzio and private label. New entrants to
the market are increasing as specialty oil companies respond to upward trending 
in demand. In the nutritional oils market, we face competition from Omega,      
Arrowhead, Jarrow, Source Naturals, Flora, Health from the Sun, Barleans, and   
numerous other private label producers.                                         

  We also face competition from makers of mass market cooking oils such as
ConAgra, Inc. through its Wesson brand, CPC International, through its Mazola   
brand, The Proctor & Gamble Company, through its Puritan brand, Hollywood,      

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Ventura Foods, through its Saffola brand, and Colavita. These mass market       
products are commodity-based everyday cooking oils and constitute a formidable  
presence on grocery and supermarket shelves, due to their lower prices due to   
volume-driven freight and distribution cost savings, use of lower cost raw      
material and other cost benefits.                                               

     In the industrial organic ingredients markets, we compete with Small Planet
Foods' Cascadian Farms and Muir Glen product lines. In some cases, we compete   
with our own customers. In the ingredients markets, our customers sometimes have
sourced ingredients directly and bypassed us in the supply chain. Our growers   
sometimes process their own crops and distribute them directly in competition   
with us. In addition, from time to time, our co-packers develop their own set of
products and source raw materials in competition with us. In addition, some of  
our customers are also our competitors. For example, Cascadian Farms buys white 
grape juice concentrate, fruit purees and citrus products from us. In addition, 
J.M. Smucker Company, a customer for our citrus products, fruit juice and fruit 
puree, competes with us in the retail frozen fruit juice and applesauce         
categories.                                                                     

Many of our competitors are larger than us and have more financial,   
marketing and management resources, and brand name recognition, than we have. If
we do not compete effectively in the organic food and health food industries,   
our business will suffer.                                                       

   We depend upon a few major customers. A significant amount of our revenue
will be derived from a small number of customers. Gerber accounted for          
approximately 24% of OI's revenues for the year ended December 31, 1998. For the
three months ended March 31, 1999, Horizon Organic Dairy accounted for          
approximately 29% of OI's revenues. United Natural Foods, Inc. accounted for    
approximately 34% and Tree of Life, Inc. accounted for approximately 11% of     
Spectrum's revenues for the year ended December 31, 1998. For the three months  
ended March 31, 1999, United Natural Foods also accounted for approximately 33% 
and Tree of Life accounted for approximately 11% of Spectrum's revenues. United 
Natural Foods accounted for approximately 21% and Price/Costco accounted for    
approximately 17% of OFPI's revenues for the year ended June 30, 1998. For the  
nine months ended March 31, 1999, United Natural Foods accounted for            
approximately 25% and Price/Costco accounted for approximately 10% of OFPI's    
revenues. A loss of any of these customers would have a material adverse impact 
on the combined company's operations.                                           

We have limited experience with club stores and chain grocery stores. 
Although OFPI has sold its products to health food stores since 1987, sales to  
club stores and chain grocery stores commenced in December 1994 and August 1995,
respectively. There can be no assurance that OFPI will be able to maintain or   
expand its sales to club stores and chain grocery stores, or that sales will be 
sufficient to offset slotting fees or in-store demonstration fees incurred to   
obtain shelf space in club stores and chain grocery stores.                     

Certain existing customers of OI may view the mergers negatively. OI  
currently serves its customer base as a supplier of ingredients. If the mergers 
are completed, we will have retail and distribution capabilities for our branded
and private label products that OI did not have prior to the mergers. As a      
result, OI's current customers may view the combined company as a competitor    
instead of as a supplier, which may cause us to lose such customers. If the     
combined company's customers elect to move their business elsewhere, our        
operations and financial condition could be adversely affected.                 

   We face significant exposure to product liability claims. Food processors
are subject to significant liability should the consumption of their products   
cause injury, illness or death. Although OFPI carries product liability         
insurance, with limits per occurrence of up to $2,000,000, there can be no      
assurance that this insurance will be adequate to protect against product       
liability claims or that insurance coverage will continue to be available at    
reasonable prices.                                                              

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We must comply with various government regulations. OFPI is subject to
various federal, state and local laws affecting its business. OFPI's food       
processing facility is subject to regulation by various governmental agencies,  
including state and local licensing, zoning, land use, construction and         
environmental regulations and various federal, state, and local health,         
sanitation, immigration, safety and fire codes and standards. In order to offer 
organic food products, OFPI is also subject to inspection and regulation by the 
United States Department of Agriculture. Suspension of any licenses or          
approvals, due to failure to comply with applicable regulations, could interrupt
OFPI's operations, cause a loss of its organic food designation, limit the      
number of employees working within its facilities or otherwise materially and   
adversely affect its business. OFPI is also subject to federal and state laws   
establishing minimum wages and regulating overtime and working conditions. Since
some of OFPI's personnel are paid at rates not far above the federal or         
California state minimum wage, increases in the federal or California minimum   
wage will result in increases in OFPI's labor costs.                            

We face significant securities disclosure compliance related to penny 
stocks. The SEC has adopted rules that define a "penny stock" as equity         
securities priced at under $5.00 per share that are not listed for trading on   
Nasdaq and (i) the issuer has net tangible assets of less than $2,000,000 if in 
business for more than three years or less than $5,000,000 if in business for   
less than three years or (ii) the issuer has had average annual revenues of less
than $6,000,000 for the prior three years. Accordingly, OFPI's securities are   
characterized as penny stock. Therefore, broker-dealers dealing in OFPI stock   
are subject to the disclosure rules for transactions involving penny stocks that
require the broker-dealer, among other things, to determine the suitability of  
purchasers of the securities and obtain the written consent of purchasers to    
purchase such securities and to disclose the best (inside) bid and offer prices 
for such securities and the price at which the broker-dealer last purchased or  
sold the securities. The additional burdens imposed upon broker-dealers may     
discourage them from effecting transactions in penny stocks, which could reduce 
the liquidity of OFPI's common stock.                                           

    We may require significant amounts of additional capital in the future. We
may require substantial capital resources to continue to develop, manufacture   
and market our products, to expand our product lines and to fund future         
operations. We cannot be certain that such financing will be available when     
needed, if at all, or on terms that would be favorable to us. Any additional    
equity financings would be dilutive to our shareholders, and additional debt    
financings, if available, would further affect our operating results and would  
likely require us to agree to additional restrictive covenants. Our inability to
raise or generate sufficient funds may require us to delay or abandon some or   
all of our planned future expansion or expenditures, which could harm our       
business.                                                                       

    Our executive management and board of directors following the mergers will
have substantial control over the company. Following the completion of the      
Spectrum merger and OI merger, our directors and executive officers will        
beneficially own approximately 87.8% of our outstanding common stock, many of   
whom are new employees or shareholders of OFPI. As a result, if our directors   
and executive officers voted together, they would be able to exercise           
significant influence over the election of members of our board of directors and
other corporate actions requiring shareholder approval, and would therefore have
significant control over our management and direction.                          

  We have a limited number of market makers and a limited public float for
our stock. Certain of the underwriters for our initial public offering in 1997  
currently are market makers for our common stock. The underwriters originally   
placed the 1,300,000 shares sold in that offering to their customers. OFPI      
believes that a significant amount of that stock is still controlled by the     
underwriters' customers. These customers may engage in transactions for the sale
or purchase of our stock through the underwriters. These underwriters may be    

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able to exert a major influence on the market for our stock, which could affect 
its price and liquidity. Additionally, a significant majority of our stock is   
owned by our affiliates, therefore only a very small number of shares generally 
are available for trading. Accordingly, our stock price fluctuate significantly 
due to transactions of a small number of shares.                                

We must effectively manage our growth. In addition to integrating the 
operations and personnel of three companies, we must manage the significantly   
larger operations of the combined company to attract, train, motivate, manage   
and retain employees successfully, and to continue to improve our operational,  
financial and management systems. Our Chief Financial Officer joined OFPI in    
January 1999, and our Chief Executive Officer and the rest of the executive     
management team following the mergers will be required to oversee a public      
company that is significantly larger as a result of the mergers. If we are      
unable to manage our recent and future growth effectively, our business,        
operating results and financial condition could be harmed.                      

Our directors have limitations on their liability. OFPI's articles of 
incorporation substantially limit the liability of OFPI's directors to OFPI and 
its shareholders for breach of fiduciary or other duties to OFPI. See           
"Comparison of Rights of Holders of OI Common Stock, Spectrum Common Stock and  
OFPI Common Stock."                                                             

   We do not expect to pay dividends. OFPI has not paid any dividends on its
common stock and does not intend to pay dividends in the foreseeable future.    

     Our business could be adversely impacted by Year 2000 compliance issues. We
use computer software that may be impacted by the Year 2000 problem, and we also
rely on vendors of equipment and services whose products may be impacted by the 
Year 2000 problem. Our Year 2000 compliance issues include:                     

o    the equipment we use in our manufacturing process;               

o    the hardware and third-party software we use for corporate       
administration;                                             

o    the services of third-party providers we purchases for certain   
professional services; and                                  

     o    our external services such as telecommunications and electrical power.

We have initiated a plan that will attempt to identify all computer   
hardware and software, plant equipment and services upon which we rely. If we   
are unable to complete the implementation of our plan in a timely manner or at  
all, or if we are unable to upgrade any systems identified as requiring such an 
upgrade, our operations would be adversely affected. The systems of other       
companies upon which our systems rely may not be timely upgraded. A failure to  
upgrade by another company or an upgrade that is incompatible with our systems  
would also harm our business.                                                   

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THE OI SPECIAL MEETING

Date, Time and Place                                                            

  OI's board of directors is soliciting the enclosed proxy to be used at a
special meeting of shareholders to be held on August 24, 1999, at 11:00 a.m.    
local time, or at any adjournment or postponement of the meeting. The proxy will
be used for the purposes described in this joint proxy statement/prospectus and 
in the accompanying notice of special meeting. The meeting will be held at the  
OI corporate offices at 335 Spreckels Drive, Suite F, Aptos, California 95003.  
OI intends to mail this joint proxy statement/prospectus and accompanying notice
of special meeting and proxy card on or about August 2, 1999 to all shareholders
entitled to vote at this meeting. The costs of soliciting proxies will be borne 
by OI subject to the provisions of the OI merger agreement relating to the      
payment of expenses.                                                            

Purpose                                                                         

    The purpose of the meeting is to vote upon a proposal to approve and adopt
the OI merger agreement and to approve the OI merger.                           

Record Date and Outstanding Shares                                              

    Only holders of record of OI common stock at the close of business on July
29, 1999 will be entitled to notice of and to vote at the meeting. At the close 
of business on such date, OI had outstanding and entitled to vote 100,000 shares
of common stock. Each record holder of OI common stock on such date will be     
entitled to one vote for each share held.                                       

Vote Required                                                                   

 Approval and adoption of the OI merger agreement and approval of the OI
merger will require the affirmative vote of the holders of a majority of the OI 
common stock outstanding on the record date. The persons named as proxy holders 
on the proxy card will vote your shares as you indicate on the card. If you do  
not specify on the proxy card how to vote your shares, the proxy holders will   
vote your shares in favor of the OI merger agreement and the OI merger. The     
inspector of election appointed for the meeting will separately tabulate        
affirmative and negative votes and abstentions. Abstentions will have the same  
effect as negative votes.                                                       

     Directors and executive officers of OI, namely John Battendieri, a director
of OI, and Joseph Stern, the President and a director of OI, together own 100%  
of the outstanding OI common stock.                                             

Proxies                                                                         

    You may revoke your proxy before it is voted by filing a written notice of
revocation or a duly executed proxy bearing a later date with OI's corporate    
secretary. You may also revoke your proxy by attending the meeting and voting in
person. Attending the meeting will not, by itself, revoke a proxy.              

Recommendation of OI Board of Directors                                         

The OI board of directors has approved the OI merger agreement and the
transactions contemplated by the OI merger agreement and has determined that the
OI merger is fair to, and in the best interests of, OI and its shareholders.    
After careful consideration, the OI board of directors recommends that you vote 
in favor of approval and adoption of the OI merger agreement and approval of the
OI merger.                                                                      

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THE SPECTRUM SPECIAL MEETING

Date, Time and Place                                                            

   Spectrum's board of directors is soliciting the enclosed proxy to be used
at a special meeting of shareholders to be held on August 24, 1999, at 11:00    
a.m. local time, or at any adjournment or postponement of the meeting. The proxy
will be used for the purposes described in this joint proxy statement/prospectus
and in the accompanying notice of special meeting. The meeting will be held at  
the Spectrum corporate offices at 133 Copeland Street, Petaluma, California     
94952. Spectrum intends to mail this joint proxy statement/prospectus and       
accompanying notice of special meeting and proxy card on or about August 2, 1999
to all shareholders entitled to vote at this meeting. The costs of soliciting   
proxies will be borne by Spectrum subject to the provisions of the Spectrum     
merger agreement relating to the payment of expense.                            

Purpose                                                                         

    The purpose of the meeting is to vote upon a proposal to approve and adopt
the Spectrum merger agreement and to approve the Spectrum merger.               

Record Date and Outstanding Shares                                              

     Only holders of record of Spectrum common stock at the close of business on
July 29, 1999 will be entitled to notice of and to vote at the meeting. At the  
close of business on such date, Spectrum had outstanding and entitled to vote   
5,000 shares of Spectrum common stock. Each record holder of Spectrum common    
stock on such date will be entitled to one vote for each share held.            

Vote Required                                                                   

    Approval and adoption of the Spectrum merger agreement and approval of the
Spectrum merger will require the affirmative vote of the holders of a majority  
of the Spectrum common stock outstanding on the record date. The persons named  
as proxy holders on the proxy card will vote your shares as you indicate on the 
card. If you do not specify on the proxy card how to vote your shares, the proxy
holders will vote your shares in favor of the Spectrum merger agreement and the 
Spectrum merger. The inspector of election appointed for the meeting will       
separately tabulate affirmative and negative votes and abstentions. Abstentions 
will have the same effect as negative votes.                                    

  Jethren Phillips, Spectrum's Chief Executive Officer and Chairman of the
Board owns 100% of the outstanding Spectrum common stock.                       

Proxies                                                                         

    You may revoke your proxy before it is voted by filing a written notice of
revocation or a duly executed proxy bearing a later date with Spectrum's        
corporate secretary. You may also revoke your proxy by attending the meeting and
voting in person. Attending the meeting will not, by itself, revoke a proxy.    

Recommendation of Spectrum Board of Directors                                   

    The Spectrum board of directors has approved the Spectrum merger agreement
and the transactions contemplated by the Spectrum merger agreement and has      
determined that the Spectrum merger is fair to, and in the best interests of,   
Spectrum and its shareholders. After careful consideration, the Spectrum board  
of directors recommends that you vote in favor of approval and adoption of the  
Spectrum merger agreement and approval of the Spectrum merger.                  

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THE OFPI SPECIAL MEETING

Date, Time and Place                                                            

    OFPI's board of directors is soliciting the enclosed proxy to be used at a
special meeting of shareholders to be held on August 24, 1999, at 11:00 a.m.    
local time, or at any adjournment or postponement of the meeting. The proxy will
be used for the purposes described in this joint proxy statement/prospectus and 
in the accompanying notice of special meeting. The meeting will be held at the  
OFPI corporate offices at 550 Monterey Road, Morgan Hill, California 95037. OFPI
intends to mail this joint proxy statement/prospectus and accompanying notice of
special meeting and proxy card on or about August 2, 1999 to all shareholders   
entitled to vote at this meeting. The costs of soliciting proxies will be borne 
by OFPI subject to the provisions of the OI merger agreement and the Spectrum   
merger agreement relating to the payment of expense.                            

Purpose                                                                         

   The purpose of the meeting is to vote upon proposals to approve and adopt
the OI merger agreement and OI merger, the Spectrum merger agreement and the    
Spectrum merger, amend the OFPI articles of incorporation to increase the number
of authorized shares of common stock, to increase the number of shares of OFPI  
common stock available for issuance under its stock option plan, and to change  
the name of OFPI to "Spectrum Organic Products, Inc."                           

Record Date and Outstanding Shares                                              

  Only holders of record of OFPI capital stock at the close of business on
July 29, 1999 will be entitled to notice of and to vote at the meeting. At the  
close of business on such date, OFPI had outstanding and entitled to vote       
__________ shares of common stock. Each record holder of common stock on such   
date will be entitled to one vote for each share held.                          

Vote Required                                                                   

  Approval and adoption of the merger agreement and approval of the merger
will require the affirmative vote of the holders of a majority of the OFPI      
capital stock outstanding on the record date. The persons named as proxy holders
on the proxy card will vote your shares as you indicate on the card. If you do  
not specify on the proxy card how to vote your shares, the proxy holders will   
vote your shares in favor of the OI merger agreement and the Spectrum merger    
agreement and the OI merger and the Spectrum merger. The inspector of election  
appointed for the meeting will separately tabulate affirmative and negative     
votes and abstentions. Abstentions will have the same effect as negative votes. 

   Directors and executive officers of OFPI, including for this purpose John
Battendieri, OFPI's Chief Executive Officer and a member of its board of        
directors, and Kenneth Steel, Jr., a director of OFPI, together with            
shareholders of OFPI who own 5% or more of any class or series of OFPI capital  
stock, own approximately 50.9% of the outstanding OFPI capital stock.           

In connection with the Spectrum merger, OFPI shareholders holding     
approximately 32.4% of the outstanding shares of common stock have agreed to    
vote their shares in favor of the Spectrum merger agreement and the Spectrum    
merger. A form of the voting agreement is attached as Annex G to this joint     
proxy statement/prospectus. We encourage you to read this agreement.            

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Proxies                                                                         

    You may revoke your proxy before it is voted by filing a written notice of
revocation or a duly executed proxy bearing a later date with OFPI's corporate  
secretary. You may also revoke your proxy by attending the meeting and voting in
person. Attending the meeting will not, by itself, revoke a proxy.              

Recommendation of OFPI Board of Directors                                       

The OFPI board of directors has approved the merger agreement and the 
transactions contemplated in those agreements and has determined that both the  
OI merger and the Spectrum merger is fair to, and in the best interests of, OFPI
and its shareholders. After careful consideration, the OFPI board of directors  
recommends that you vote in favor of approval and adoption of the OI merger and 
the Spectrum merger. The OFPI board of directors also recommends that you vote  
in favor of approval and adoption of the amendment of OFPI's articles of        
incorporation to increase the authorized number of common stock, the increase in
the number of shares available for issuance under the OFPI stock option plan and
the change of OFPI's corporate name.                                            

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 THE MERGERS

Background of the Mergers                                                       

Prior to June 1996, OFPI was involved in the industrial ingredient    
business. As part of the June 1996 merger of OFPI's predecessors, OFPI          
determined not to pursue the industrial ingredients business. Accordingly,      
OFPI's industrial ingredients business was phased out in the first half of      
fiscal 1997. Subsequently, a number of former OFPI employees became employed by 
OI, and OI acquired a number of OFPI's ingredients customers.                   

From time to time between 1996 and 1998, the possibility of OFPI      
re-entering the ingredients business was discussed conceptually, but was not    
pursued.                                                                        

In September 1997, Spectrum decided to offer its culinary oils and    
condiments food lines for sale and retained Monterey Bay Corporate Development, 
a financial consulting firm, to manage the sale process.                        

     During January 1998, Spectrum had discussions with Global Natural Brands, a
management services company, regarding the possible sale of Spectrum's food     
business. On February 18, 1998, Spectrum learned that Global had approached OFPI
regarding a proposed merger of Spectrum and OFPI, and on March 13, 1998,        
Spectrum received a letter of intent from Global, which was accepted by         
Spectrum.                                                                       

   On March 15, 1998, Spectrum received notification from Global of Global's
assignment of the Spectrum letter of intent agreement to OFPI and Global's plans
to merge Spectrum with OFPI. This letter of intent was terminated by Spectrum on
March 23, 1998 due to Global's failure to obtain the required letter of credit. 

     On April 29, 1998, OFPI announced the appointment of Global to a management
services agreement to assume control of day to day operations of OFPI, and on   
May 15, 1998, OFPI announced they had reached an agreement to purchase Spectrum.

 On August 12, 1998, OFPI announced the expiration of their agreement to
purchase Spectrum and announced the withdrawal of their agreement to purchase   
Spectrum on October 9, 1998. Following this withdrawal, Spectrum considered     
other options for selling all or a portion of its business.                     

    In November 1998, members of Spectrum's management met with the management
of OI to discuss a potential merger of OI with Spectrum. OI's management team   
included John Battendieri, a director and 50% shareholder of OI, and the chief  
executive officer, chairman of the board and a 27.8% shareholder of OFPI. Both  
parties agreed to hold further discussions to continue to negotiate specific    
terms of a merger, including the potential of adding OFPI to the transaction.   

  On December 10, 1998, the management of OI, Spectrum and OFPI met at the
offices of Monterey Bay Corporate Development to review detail financial        
projections and related potential synergies of merging the three companies,     
along with the equity allocations of the combined company.                      

    On February 4, 1999, Spectrum representatives met with the OFPI management
team and their auditors to explore the accounting issues related to a potential 
merger. From February 4 through February 18, Spectrum, OI and OFPI              
representatives continued to discuss a potential merger of the three companies, 
and on February 18, 1999, OFPI entered into a letter of intent with each of     
Spectrum and OI to merge into one company.                                      

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From February 18, 1999 through May 14, 1999, OI, Spectrum and OFPI    
negotiated the terms of the definitive agreements related to the mergers and    
performed due diligence reviews of each other company.                          

 On May 6, 1999, Spectrum and OFPI entered into an agreement under which
Spectrum manages and administers OFPI's juice business in exchange for royalty  
payments.                                                                       

     On May 14, 1999, the OFPI board of directors approved the merger agreements
with each of OI and Spectrum and the Spectrum merger agreement and OI merger    
agreement were signed by the companies.                                         

OI's Reasons for the OI Merger                                                  

  The OI board of directors has approved the OI merger agreement, believes
that the OI merger is fair to and in the best interests of OI and its           
shareholders, and unanimously recommends the approval and adoption of the OI    
merger agreement by the OI shareholders at the special meeting.                 

   OI's board believes that combining Spectrum's oil and grain product lines
with OI's fruit and vegetable product lines would increase product offerings and
product categories. Larger volume purchasing would provide lower costs,         
opportunities for crop selection, and the ability to acquire rights to crops not
available as individual companies. Combining OI's sourcing abilities and OFPI's 
retail brand and distribution systems is expected to further lower costs and    
improve both private label and branded business. The combined company offers new
strategic relationships for each of OI, Spectrum and OFPI and the potential to  
expand financing capacity.                                                      

Spectrum's Reasons for the Spectrum Merger                                      

The Spectrum board of directors has approved the Spectrum merger      
agreement,  believes  that  the  Spectrum  merger  is  fair  to and in the  best
interests of Spectrum  and its  shareholders,  and  unanimously  recommends  the
approval  and  adoption  of  the  Spectrum  merger  agreement  by  the  Spectrum
shareholders at the special meeting.                                            

In the course of reaching its decision to approve the Spectrum merger 
agreement, the Spectrum board of directors considered and reviewed with Spectrum
management a number of factors relevant to the Spectrum merger, including the   
strategic overview and prospects of Spectrum, its products and its finances.    

Spectrum has historically been financed by earnings and a bank line of
credit guarantee by Spectrum's founder, Jethren Phillips. In the view of        
Spectrum's management, this method of financing had become restrictive and had  
limited Spectrum's growth. The management of Spectrum has identified more growth
opportunities that it has been able to finance.                                 

 In September 1997, Spectrum's board of directors had determined to sell
part of the business in order to raise the funds required to support these new  
opportunities. During this process it was determined Spectrum could not realize 
the potential value by selling only a portion of the business, due to the       
synergistic relationships between the various segments. Spectrum next explored a
merger with a new partner in order to gain critical mass and access to          
additional capital.                                                             

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 Merging with OI had been identified as one of the top opportunities for
Spectrum's rapidly growing industrial ingredients business. In addition, during 
the previous attempt to sell the food portion of Spectrum's business to OFPI,   
significant cost saving opportunities were identified, but financing was not    
available at that time. Due to the business ties between OI and OFPI, it was    
determined a merger of OI, Spectrum and OFPI would generate both cost savings   
and revenue growth opportunities. Spectrum's board believes that combining OI,  
Spectrum and OFPI will offer opportunities to lower duplicate administrative    
expenses. It is also anticipated cost savings will be realized by combining     
warehousing and distribution expenses. Moreover, by combining the research and  
product development capabilities and organic raw material sourcing capabilities 
of the companies, Spectrum expects to improve product quality and lower product 
cost. Spectrum's board believes that Spectrum's relative financial strength will
improve the prospects for obtaining new financing.                              

   In addition, access to the public marketplace for additional capital will
make it easier for Spectrum to raise the resources necessary to fund the future 
capital needs to the combined company.                                          

OFPI's Reasons for the Mergers                                                  

The OFPI board of directors has approved the OI and Spectrum merger   
agreements, believes that the OI merger and Spectrum merger are fair to and in  
the best interests of OFPI and its shareholders and unanimously recommends the  
approval and adoption of the OI and Spectrum merger agreements by the OFPI      
shareholders at the special meeting.                                            

OFPI has exhausted the cash available under its current financing     
agreement. Because of this cash flow situation, OFPI has been forced to conduct 
business with its vendors on a COD basis, jeopardizing its vendor relationships 
and customer service levels. In addition, OFPI has failed to meet some of its   
subordinated debt obligations and is currently in default. Due to this financial
condition, OFPI has few, if any, other financing alternatives.                  

While OFPI recognizes the strategic and operational benefits of the   
mergers, the OFPI board believe that the most critical benefit is the financing 
opportunities available to the merged company. Absent the mergers, unless other 
additional capital can be obtained in the near term, the availability of which  
OFPI has no assurance, OFPI will be forced to file for protection under         
bankruptcy laws.                                                                

    In reaching its decision to approve the OI and Spectrum merger agreements,
the OFPI board of directors considered and reviewed with OFPI management a      
number of relevant factors, including OFPI's strategic overview and current     
financial situation.                                                            

    Merging with OI and Spectrum will enable OFPI to leverage its customer and
vendor relationships, as well as provide the critical mass to be a leader in the
natural and organic products industry. The combined company is expected to      
improve over the operating results of OFPI's business through lower raw         
materials costs and decreased selling expenses. In addition, the mergers will   
provide OFPI with the additional management resources, infrastructure and       
systems to achieve operating efficiencies in OFPI's existing business and       
support future growth.                                                          

Accounting Treatment                                                            

The OI merger will be accounted for under the "purchase" method of    
accounting. Under this method, in the OI merger the purchase price of OI will be
compared to the value of the identifiable tangible assets less the assumed      
liabilities of OI, and any excess will be recorded as goodwill. The purchase    
price will be determined by multiplying the number of combined OFPI shares to be
issued to former OI shareholders by the average of the closing market prices for
the three days immediately prior to the announcement of the mergers in February 
1999.                                                                           

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     Since a controlling interest in the combined company will be held after the
mergers by former shareholders of Spectrum, the Spectrum merger will be         
accounted for as a reverse merger. For accounting purposes, Spectrum will be    
treated as the acquiror, and OFPI will be treated as the acquired entity. The   
assumed purchase price of OFPI will be determined by multiplying the number of  
combined OFPI shares to be held by former OFPI shareholders after the Spectrum  
merger by the average of the closing market prices for the three days           
immediately prior to the announcement of the mergers in February 1999. Any      
excess of this amount over the identifiable tangible assets less the assumed    
liabilities of OFPI will be recorded as goodwill.                               

Material Federal Income Tax Consequences                                        

The following discussion summarizes the material federal income tax   
considerations generally applicable to OI and Spectrum shareholders. It assumes 
that Spectrum shareholders and OI shareholders hold their Spectrum common stock 
and OI common stock as capital assets within the meaning of Section 1221 of the 
Internal Revenue Code.                                                          

The discussion below is based on current law. Changes in the law could
affect the federal income tax consequences of the mergers to OI and Spectrum    
shareholders. We have not and will not seek a ruling from the IRS in connection 
with the mergers. This discussion does not address the consequences of the      
mergers under state, local or foreign law, nor does the discussion address all  
aspects of federal income taxation that may be important to a Spectrum          
shareholder or OI shareholder in light of his or her particular circumstances or
tax issues that may be significant to Spectrum shareholders subject to special  
rules, such as:                                                                 

o    financial institutions,                                          

o    insurance companies,                                             

o    foreign individuals and entities,                                

o    tax-exempt entities,                                             

o    dealers in securities,                                           

   o    persons who are subject to the alternative minimum tax provisions of
the Internal Revenue Code,                                  

o    persons who acquired Spectrum or OI common stock pursuant to the 
     exercise of an employee option (or otherwise as compensation), or

o    persons who acquired Spectrum or OI common stock as part of an   
          integrated investment (including a "straddle") composed of Spectrum or
OI common stock and one or more other positions.            

     Accordingly, Spectrum shareholders and OI shareholders are urged to consult
their own tax advisors as to the specific tax consequences of the mergers,      
including the applicable federal, state, local and foreign tax consequences to  
them of the mergers.                                                            

  Cooley Godward LLP, counsel to Spectrum, and Carr, McClellan, Ingersoll,
Thompson & Horn, Professional Corporation, counsel to OFPI, are of the opinion  

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that the Spectrum merger will constitute a reorganization pursuant to Section   
368(a) of the Internal Revenue Code. Bosso, Williams, Sachs, Book, Atack &      
Gallagher, counsel to OI, and Carr, McClellan, counsel to OFPI, are of the      
opinion that the OI merger will also constitute a reorganization pursuant to    
Section 368(a) of the Code. In addition, it is a condition to the obligation of 
each party to consummate the mergers that it receive an opinion of its counsel  
to the effect that the mergers will each constitute such a Section 368(a)       
reorganization. These opinions neither bind the IRS or the courts nor preclude  
the IRS or a court from adopting a contrary position.                           

In addition, the tax opinions assume and are conditioned upon the     
following:                                                                      

   o    the truth and accuracy of the statements, covenants, representations
 and warranties contained in the merger agreements, in the tax
          representations received from OFPI and Spectrum or OI and in all other
       instruments and documents related to the formation and operation of
         OFPI and Spectrum or OI examined by and relied upon by Cooley Godward
  or Bosso, Williams or Carr, McClellan in connection with their
respective opinions;                                        

    o    that original documents submitted to counsel are authentic, documents
         submitted to counsel as copies conform to the original documents, and
that those documents have been (or will be by the applicable
  "effective time" of the mergers) duly and validly executed and
delivered;                                                  

o    that all covenants contained in the merger agreements and the tax
     representations received from OI, Spectrum and OFPI are performed
without waiver or breach of any material provision; and     

   o    that any representation or statement made "to the best of knowledge"
or similarly qualified is correct without being qualified.  

     As a reorganization, the mergers will have the following federal income tax
consequences (subject to the limitations and qualifications referred to in this 
joint proxy statement/prospectus):                                              

     Exchange of Spectrum Common Stock or OI Common Stock for OFPI Common Stock.
Except as discussed below, no gain or loss will be recognized for federal income
tax purposes by Spectrum or OI shareholders who exchange their Spectrum common  
stock or OI common stock for OFPI common stock pursuant to the mergers. Each    
Spectrum or OI shareholder's aggregate tax basis in the OFPI common stock he or 
she receives in the mergers will be the same as his or her aggregate tax basis  
in the Spectrum or OI common stock surrendered in the mergers (reduced by any   
tax basis allocable to fractional shares exchanged for cash), and the holding   
period of the OFPI common stock received will include the holding period of the 
Spectrum common stock or OI common stock surrendered.                           

Cash Received Instead of Fractional Shares. The payment of cash to a  
Spectrum or OI shareholder instead of a fractional share of OFPI common stock   
generally should result in the recognition of capital gain or loss measured by  
the difference between the amount of cash received and the portion of the tax   
basis of the Spectrum or OI common stock allocable to that fractional share     
interest. In the case of an individual, capital gain is generally subject to    
United States federal income tax at a maximum rate of 20% if such individual has
held his or her Spectrum or OI common stock for more than one year at the time  
of the merger, and at ordinary income rates (as a short-term capital gain) if   
the individual has held his or her Spectrum or OI common stock for one year or  
less at the time of the consummation of the mergers. The deductibility of       
capital losses may be limited.                                                  

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    If the IRS were to successfully challenge the reorganization status of the
Spectrum merger or the OI merger, Spectrum shareholders or the OI shareholders, 
as applicable, would be subject to significant adverse tax consequences. Under  
these circumstances, the acquired corporation would be treated as though it had 
sold its assets in a taxable sale and then liquidated. An acquired corporation  
shareholder would recognize gain or loss equal to the difference between the    
basis in his or her shares of common stock surrendered in the merger and the    
fair market value, as of the completion of the merger, of the shares of OFPI    
common stock received in the merger plus any cash received instead of a         
fractional share of OFPI common stock. In addition, an acquired corporation     
shareholder's aggregate basis in his or her shares of OFPI common stock received
in the merger would equal the fair market value of such stock as of the         
completion of the merger. Finally, an acquired corporation shareholder's holding
period for his or her OFPI common stock would begin the day after the closing   
date of the applicable merger.                                                  

    Reporting Requirements. Each Spectrum or OI shareholder that receives OFPI
common stock in the mergers will be required to file a statement with his or her
federal income tax return setting forth his or her basis in the Spectrum or OI  
common stock surrendered and the fair market value of the OFPI common stock and 
cash received in the mergers, and to retain permanent records of these facts    
relating to the mergers.                                                        

  Backup Withholding. Unless an exemption applies under applicable law and
regulations, the exchange agent is required to withhold, and will withhold, 31% 
of any cash payments to a Spectrum or OI shareholder in the mergers unless the  
shareholder provides the appropriate form as described below. Each Spectrum or  
OI shareholder should complete and sign the Substitute Form W-9 included as part
of the letter of transmittal to be sent to each Spectrum or OI shareholder, so  
as to provide the information, including such shareholder's taxpayer            
identification number, and certification necessary to avoid backup withholding, 
unless an applicable exemption exists and is proved in a manner satisfactory to 
OFPI and the exchange agent.                                                    

The preceding discussion is not meant to be a complete analysis or    
discussion of all potential tax effects relevant to the mergers. Thus, Spectrum 
and OI shareholders are urged to consult their own tax advisors as to the       
specific tax consequences to them of the mergers, including tax return reporting
requirements, federal, state, local and other applicable tax laws and the effect
of any proposed changes in the tax laws.                                        

Dissenters' Rights                                                              

Shareholders of OI, Spectrum or OFPI who do not vote in favor of the  
mergers and who otherwise comply with the requirements of Chapter 13 of the     
California Corporations Code will be entitled to exercise dissenters' rights    
under California law. Such rights entitle the shareholder to require OI,        
Spectrum or OFPI to purchase the dissenting shares for cash at their fair market
value, excluding any appreciation or depreciation as a result of the mergers.   
The following is a summary description of the provisions of the applicable      
California law. This summary is complete in all material respects but should be 
read with the full text of the applicable law, a copy of which is attached      
hereto as Annex C. Any holder of OFPI, Spectrum or OI common stock intending to 
exercise statutory dissenters' rights is urged to review Annex C carefully and  
to consult with legal counsel so as to assure strict compliance with its        
provisions.                                                                     

    A vote in favor of the merger agreements and the mergers will constitute a
waiver of your dissenters' rights.                                              

  If the mergers are approved by the required vote of the OI, Spectrum and
OFPI shareholders, each holder of OI, Spectrum or OFPI common stock who does not

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vote in favor of the mergers and who follows the procedures set forth in Chapter
13 will be entitled to have their shares of OI, Spectrum or OFPI common stock   
purchased for cash at their fair market value. The fair market value of the     
OFPI, Spectrum or OI common stock will be determined as of the day before the   
first announcement of the terms of the mergers, excluding any appreciation or   
depreciation as a result of the mergers.                                        

  Within 10 days after approval of the mergers by the OI, Spectrum or OFPI
shareholders, OI, Spectrum and OFPI must mail a notice of such approval to      
holders of shares which were not voted in favor of the mergers, together with a 
statement of the price determined by OI, Spectrum and OFPI to represent the fair
market value of the shares for which dissenters' rights remain available, a     
brief description of the procedures to be followed in order for the shareholder 
to pursue dissenters' rights, and a copy of Sections 1300 to 1304 of Chapter 13.
The statement of price by OI, Spectrum or OFPI constitutes an offer by OI,      
Spectrum or OFPI to purchase all shares for which dissenters' rights remain     
available at the stated amount. Only a holder of record of shares of OI,        
Spectrum or OFPI common stock on the record date (or his or her duly appointed  
representative) is entitled to assert a purchase demand against the applicable  
corporation for the shares registered in that holder's name.                    

A shareholder of OI, Spectrum or OFPI electing to exercise dissenters'
rights must, within 30 days after the date that the approval notice is mailed to
such shareholder, mail or deliver a written demand to OI, Spectrum or OFPI, as  
appropriate, stating that such holder is demanding that the applicable          
corporation purchase his or her shares of common stock, and a statement as to   
what the shareholder claims to be the fair market value of such shares. A holder
who elects to exercise dissenters' rights should mail or deliver his or her     
written demand to OI at 335 Spreckels Drive, Suite F, Aptos, California 95003,  
Attention: Joseph Stern, to Spectrum at 133 Copeland Street, Petaluma,          
California 94952, Attention: Jethren Phillips or to OFPI at 550 Monterey Road,  
Suite B, Morgan Hill, California, 95037, Attention: Richard R. Bacigalupi. Such 
statement of the fair market value of the shares of OI, Spectrum or OFPI common 
stock constitutes an offer by the shareholder to sell the shares of OI, Spectrum
or OFPI at that price.                                                          

If OI, Spectrum or OFPI and the dissenting shareholder agree upon the 
purchase price of the shares, the dissenting shareholder is entitled to the     
agreed upon price with interest thereon at the legal rate on judgments from the 
date of such agreement. Payment for the dissenting shares must be made within 30
days after the later date of such agreement or the date on which all statutory  
and contractual conditions to the mergers are satisfied, and is subject to      
surrender to OI, Spectrum or OFPI of the certificates for the dissenting shares.

 If OI, Spectrum or OFPI and the shareholder fail to agree upon the fair
market value of shares of OI, Spectrum or OFPI common stock, then within 6      
months after the date that the approval notice was mailed to shareholders, any  
shareholder who has made a valid written purchase demand and who has not voted  
in favor of approval and adoption of the mergers may file a complaint in        
superior court requesting a determination as to whether the shares are          
dissenting shares or as to the fair market value of such holder's shares of the 
OI, Spectrum or OFPI common stock, or both.                                     

   Any holder of dissenting shares who has duly demanded the purchase of his
or her shares under Chapter 13 will not, after the effective time of the        
mergers, be entitled to vote the shares subject to such demand for any purposes 
or be entitled to the payment of dividends or other distributions on such       
dissenting shares (except dividends or other distributions payable to           
shareholders of record as of the date prior to the effective time of the        
mergers).                                                                       

     If any holder of OI, Spectrum or OFPI common stock who demands the purchase
of his or her shares under Chapter 13 fails to perfect, or effectively withdraws
or loses his or her right to such purchase, the shares of such holder will      
remain outstanding, in the case of OFPI shareholders, and in the case of OI and 

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Spectrum shareholders, the shares of such holder will be converted into shares  
of OFPI common stock in accordance with the applicable exchange ratios set forth
in the merger agreements. Dissenting shares lose their status as dissenting     
shares if:                                                                      

o    the mergers are abandoned;                                       

    o    the shares are transferred prior to their submission for the required
endorsement;                                                

   o    the dissenting shareholder fails to make a timely written demand for
purchase, along with a statement of fair market value;      

o    the dissenting shares are voted in favor of the mergers;         

     o    the dissenting shareholder and OI, Spectrum or OFPI, as applicable, do
          not agree upon the status of the shares as dissenting shares or do not
     agree on the purchase price, but neither OI, Spectrum or OFPI, as
        applicable, nor the shareholder files a complaint or intervenes in a
          pending action within six months after mailing of the approval notice;
or                                                          

o    with OI's, Spectrum's or OFPI's consent, as the case may be, the 
shareholder delivers to the applicable corporation a written
      withdrawal of such shareholder's demand for purchase of his or her
shares.                                                     

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THE OI AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AND THE RELATED AGREEMENTS

    Please note that the following description of the OI merger agreement is a
summary only. You should read the following summary and the OI merger agreement 
attached as Annex A for a full understanding of the OI merger agreement. The OI 
merger agreement is incorporated by reference into this joint proxy             
statement/prospectus.                                                           

Effective Time; Effect of OI Merger                                             

 The OI merger will become effective upon the filing of a Certificate of
Merger with the Secretary of State of the State of California (the "OI Effective
Time"). The closing of the OI merger (the "OI Closing") will occur at the       
offices of Cooley Godward LLP, One Maritime Plaza, 20th Floor, San Francisco,   
California 94111 at a time and on a date to be specified by the parties, which  
will be no later than the second day after the satisfaction or waiver of the    
conditions to the OI merger (the "OI Closing Date"). The Certificate of Merger  
will be filed on the OI Closing Date. The OI Closing and the OI Effective Time  
are anticipated to be on or about August 31, 1999.                              

At the OI Effective Time, OI shall be merged with and into OFPI, the  
separate corporate existence of OI shall cease, and OFPI shall be the surviving 
corporation.                                                                    

Conversion of Shares                                                            

     At the OI Effective Time, by virtue of the OI merger and without any action
on the part of OI or the holders of OI securities, each outstanding share of OI 
common stock will be canceled and converted into 39.5 shares of OFPI common     
stock.                                                                          

 The exchange ratio of 39.5 to 1 will be adjusted for, or OFPI will make
appropriate provisions to reflect the effect of, any stock split, reverse split,
stock dividend, extraordinary dividend or distribution, reorganization,         
recapitalization or other like change with respect to OFPI common stock or OI   
common stock occurring or having a record or effective date after the date of   
the OI merger agreement.                                                        

    No fractional shares will be issued by virtue of the OI merger. In lieu of
a fraction of a share of OFPI common stock, each OI shareholder will receive    
(after all fractional shares to be received by such holder are aggregated) from 
OFPI an amount of cash (rounded down to the nearest whole cent) equal to the    
product of (a) such fraction, multiplied by (b) the closing price of a share of 
OFPI common stock on the OI Closing Date, as reported on the NASD OTC Bulletin  
Board system, or other applicable market.                                       

Stock Ownership Following the OI Merger                                         

  Based on the capitalization of OI as of the close of business on June 1,
1999 and the 39.5 to 1 exchange ratio, an aggregate of approximately 3,950,000  
shares of OFPI common stock will be issued to OI shareholders in the OI merger. 
Based on the number of shares of OFPI common stock issued and outstanding as of 
May 14, 1999, and after giving effect to the issuance of OFPI common stock in   
the OI merger, the former holders of OI common stock would hold, and have voting
power with respect to approximately 34.3% of OFPI's total issued and outstanding
shares immediately after the OI Effective Time, and approximately 9.0% of OFPI's
total issued and outstanding shares immediately following the consummation of   
the Spectrum merger.                                                            

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Representations and Warranties                                                  

   OI and OFPI have made representations in the OI merger agreement relating
to, among other things:                                                         

     o    their respective capitalization and organization and similar corporate
matters;                                                    
  o    authorization, execution, delivery and enforceability of the merger
agreement;                                                  
   o    conflicts under governing documents, required consents or approvals,
and violations of any agreements or law;                    
     o    financial statements and documents filed with the SEC (if any) and the
accuracy of information contained therein;                  
o    absence of material adverse events, changes or effects;          
o    tax matters relating to the proposed merger;                     
o    the absence of undisclosed liabilities;                          
o    compliance with laws, including food and drug laws;              
o    litigation;                                                      
o    intellectual property matters;                                   
o    the disclosure and enforceability of certain material contracts; 
o    compliance with environmental and tax laws and regulations;      
o    retirement and other employee plans and matters;                 
o    certain business matters relating to permits and licenses and    
insurance;                                                  
o    liabilities relating to employees, labor unions or other         
organizations;                                              
o    finders and brokers;                                             
o    title to property; accounts receivable, inventory, equipment; and
o    insurance.                                                       

     The representations and warranties of OI or OFPI in the OI merger agreement
described above will survive for two years after the OI Effective Time.         

In addition, OI and OFPI have agreed to make representations that will
serve as the basis for the tax opinions of Carr, McClellan and Bosso, Williams, 
described under "The Merger-- Material Federal Income Tax Consequences."        

Conduct of OFPI's Business and OI's Business Prior to the OI Merger             

 During the period from the date of the OI merger agreement until the OI
Effective Time, each of OI and OFPI has agreed to:                              

(a)  conduct its business and operations in the ordinary course and in
      substantially the same manner as such business and operations have
been conducted prior to the date of the merger agreement;   

(b)  use reasonable efforts to preserve intact its current business   
         organization, keep available the services of its current officers and
         employees and maintain its relations and goodwill with all suppliers,
       customers, landlords, creditors, employees and other persons having
business relationships with it;                             

    (c)  keep in full force all insurance policies in effect as of the date of
the merger agreement; and                                   

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  (d)  cause its officers to report regularly to OFPI or OI concerning the
status of its business.                                     

     The merger agreement further provides that, during the period from the date
of the merger agreement until the OI Effective Time, OI or OFPI will not,       
subject to certain exceptions, take any of the following actions:               

(a)  declare, accrue, set aside or pay any dividend or make any other 
         distribution in respect of any shares of capital stock, and shall not
         repurchase, redeem or otherwise reacquire any shares of capital stock
or other securities;                                        

    (b)  not sell, issue or authorize the issuance of (i) any capital stock or
          other security, (ii) any option, call, warrant or right to acquire, or
  relating to, any capital stock or other security, or (iii) any
        instrument convertible into or exchangeable for any capital stock or
    other security (except that OFPI may issue common stock upon the
     exercise of outstanding options or upon conversion of convertible
securities outstanding on the date of the merger agreement);

    (c)  amend or waive any of OFPI's rights under, or (except pursuant to the
         terms of OFPI options outstanding on the date of the merger agreement
     which provide for automatic acceleration upon consummation of the
     merger) permit the acceleration of vesting under any provision of
     OFPI's stock plans, any provision of any agreement evidencing any
          outstanding option or warrant or any provision of any restricted stock
purchase agreement;                                         

  (d)  amend or permit the adoption of any amendment to the OI's or OFPI's
          articles of incorporation or bylaws, or effect or permit OI or OFPI to
    become a party to any acquisition transaction, recapitalization,
   reclassification of shares, stock split, reverse stock split or
similar transaction;                                        

   (e)  form any subsidiary or acquire any equity interest or other interest
in any other entity;                                        

  (f)  make any capital expenditure, except for capital expenditures that,
       when added to all other capital expenditures made during the period
         from the date of the OI merger agreement until the OI Effective Time,
        do not exceed, in the case of OI, $100,000, and in the case of OFPI,
$50,000, in the aggregate;                                  

   (g)  (i) enter into or become bound by, or permit any of the assets owned
          or used by it to become bound by, any material contracts except in the
        ordinary course of business, or (ii) amend or prematurely terminate,
        or waive any material right or remedy under, any material contracts;

 (h)  (i) acquire, lease or license any material right or other material
      asset from any other person, (ii) sell or otherwise dispose of, or
       lease or license, any material right or other material asset to any
        other person, or (iii) waive or relinquish any material right, other
     than in the ordinary course of business and except for immaterial
  assets acquired, leased, licensed or disposed of by OI or OFPI
pursuant to contracts that are not material contracts;      

(i)  (i) lend money to any person, or (ii) incur or guarantee any     
         indebtedness, except for routine advances of expenses to employees in
       the ordinary course of business and except that OI or OFPI may make
   routine borrowings in the ordinary course of business under its
existing bank lines of credit;                              

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     (j)  (i) pay any bonus or make any profit-sharing or similar payment to, or
          increase the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its
          directors, officers or employees, other than in the ordinary course of
         business and solely with respect to non-officers and non-directors or
(ii) establish, adopt or amend any employee benefit plan;   

     (k)  change any of its methods of accounting or accounting practices in any
respect;                                                    

(l)  make any tax election;                                           

(m)  commence or settle any legal proceeding not disclosed in OI's or 
OFPI's disclosure schedule to the OI merger agreement;      

    (n)  enter into any material transaction or take any other material action
         outside the ordinary course of business or inconsistent with its past
practices; and                                              

    (o)  agree or commit to take any of the actions described in clauses "(a)"
through "(n)" described above.                              

Conduct of Business Following the OI Merger                                     

     Pursuant to the OI merger, OI will cease to exist as a corporation and will
be merged with and into OFPI, with OFPI as the surviving corporation. All       
property, rights, privileges, powers and franchises of OI will vest in OFPI; all
debts, liabilities and duties of OI will become the debts, liabilities and      
duties of OFPI.                                                                 

   Pursuant to the OI merger agreement, OFPI shall file Amended and Restated
Articles of Incorporation attached hereto as Annex D. The bylaws of OFPI are the
bylaws attached as Exhibit D to the OI merger agreement. The directors and      
officers of OFPI are the individuals listed on Exhibit C to the OI merger       
agreement.                                                                      

No Solicitation                                                                 

During the period from the date of the merger agreement until the OI  
Effective Time, each of OI and OFPI has agreed that it shall not, and shall     
cause its subsidiaries not to, and shall cause its and its subsidiaries'        
respective officers and directors not to:                                       

o    solicit, initiate, encourage or induce the making, submission or 
       announcement of any Acquisition Proposal (as defined below) or take
          any action (excluding any press releases issued in connection with the
     announcement of the execution of the merger agreement) that could
reasonably be expected to lead to an Acquisition Proposal,  

    o    furnish any information regarding OI or OFPI, or its subsidiaries, to
       any third party in connection with or in response to an Acquisition
Proposal,                                                   

     o    continue or engage in discussions with any third party with respect to
any Acquisition Proposal,                                   

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o    approve, endorse or recommend any Acquisition Proposal, or       

  o    enter into any letter of intent or similar document or any contract
    contemplating or otherwise relating to any Acquisition Proposal.

For the purposes of the OI merger agreement, an "Acquisition Proposal"
means any offer or proposal made by a third party for:                          

       o    any sale, lease exchange, transfer or other disposition of the
               assets of OI or OFPI, or its subsidiaries, constituting more than
             10% of the consolidated assets of OI or OFPI, or accounting for
             more than 10% of the consolidated revenues of OI or OFPI in any
     one transaction or in a series of related transactions;

   o    any offer to purchase, tender offer, exchange offer or any
               similar transaction or series of related transactions made by any
              third party involving more than 10% of the outstanding shares of
capital stock of OI or OFPI;                      

         o    any merger, consolidation, business combination, share exchange,
              reorganization or other similar transaction or series of related
transactions involving OI or OFPI; or             

          o    any assignment, transfer or licensing or other disposition of, in
            whole or in part, certain intellectual property, other than in
the ordinary course of business.                  

  In addition, each of OI and OFPI has agreed to promptly inform the other
party orally and in writing of any Acquisition Proposal (including the identity 
of the third party making such Acquisition Proposal and its terms). OI and OFPI 
have also agreed to keep the other party informed regarding the status of any   
such Acquisition Proposal.                                                      

Fees, Expenses and Termination Fees                                             

 Except as set forth below, all fees and expenses incurred in connection
with the merger agreement and the transactions contemplated thereby will be paid
by the party that incurs them. OFPI has agreed to pay fees and expenses incurred
by OI in connection with the OI merger and the OI merger agreement if:          

   o    the OI merger agreement is terminated by either OFPI or OI
            because the OFPI shareholders do not approve the OI merger; or

     o    the OI merger agreement is terminated by OI because the OFPI
              Board fails to recommend the approval of the OI merger agreement
         to OFPI shareholders, or withdraws, amends or modifies in a
               manner adverse to OI its recommendations to OFPI shareholders for
approval of the OI merger agreement.              

Conditions to the OI Merger                                                     

The respective obligations of OI and OFPI to effect the OI merger are 
subject to the satisfaction or waiver in writing at or prior to the OI Effective
Time of the following conditions:                                               

          o    the representations and warranties of OI or OFPI contained in the
             OI merger agreement are accurate in all material respects as of
the date of the OI merger agreement;              

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       o    OI or OFPI has performed and complied in all material respects
         with all covenants or obligations required by the OI merger
              agreement to be performed or complied with on or prior to the OI
Closing Date;                                     

          o    all consents listed in each of OI's or OFPI's disclosure schedule
  have been obtained and are in full force and effect;

    o    OI and OFPI shareholders have duly approved and adopted the
merger agreement and the OI merger;               

     o    the SEC has declared effective the Registration Statement of
            which this joint proxy statement/prospectus is a part, and the
           Registration Statement shall not be subject to any stop order
         suspending that effectiveness or proceedings seeking a stop
order;                                            

          o    OFPI and OI have received legal opinions from Bosso, Williams and
Carr, McClellan, respectively;                    

         o    OFPI and OI have received opinions of Carr, McClellan and Bosso,
        Williams, respectively, to the effect that the merger will
              constitute a reorganization within the meaning of Section 368(a)
of the Code;                                      

 o    no temporary restraining order, preliminary or permanent
              injunction or other orders preventing the consummation of the OI
               merger or otherwise makes it illegal has been issued by any court
of competent jurisdiction;                        

          o    a Compliance Certificate signed by the Chief Executive Officer of
             OI or OFPI, evidencing compliance with the conditions set forth
               in the OI merger agreement has been delivered to the other party;
and                                               

       o    Joseph Stern has entered into an employment agreement mutually
satisfactory to OFPI and Mr. Stern.               

     In addition, the obligations of OFPI to consummate and effect the OI merger
are also subject to the satisfaction or waiver at or prior to the OI Effective  
Time, of the following condition, which may be waived by OFPI:                  

         o    OI's shareholders shall have entered into an agreement with OFPI
             prohibiting such shareholders from transferring any OFPI common
               stock beneficially owned by such persons for a period of one year
from the OI Closing Date.                         

   OI's obligation to consummate and effect the OI merger is also subject to
the following condition:                                                        

         o    OFPI shall have taken steps necessary to accomplish the Spectrum
             merger immediately after the OI merger and OFPI has provided OI
       with Spectrum's intent to accomplish the Spectrum merger.

Currently, both OFPI and OI anticipate that they will satisfy all     
conditions to the OI merger at or prior to consummation of the OI merger.       

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Termination of the OI Merger Agreement                                          

The OI merger agreement provides that it may be terminated at any time
prior to the OI Effective Time, whether before or after approval of the OI      
merger by the OI shareholders and the OFPI shareholders:                        

o    by mutual written consent of OFPI and OI;              

o    by either OFPI or OI if the merger shall not have been 
             consummated on or before August 31, 1999 (unless the failure to
               consummate the OI merger is attributable to a failure on the part
          of the party seeking to terminate the OI merger agreement to
              perform any material obligation required to be performed by such
              party at or prior to the OI Effective Time or unless the SEC has
              not completed its review of the joint proxy statement/prospectus
    or OFPI is in the process of addressing SEC comments);

     o    by either OFPI or OI if a court of competent jurisdiction or
             other governmental entity has issued a final and non-appealable
    order, decree, ruling, or taken any other action, that
          permanently restrains, enjoins or otherwise prohibits the OI
merger;                                           

        o    by either OFPI or OI if the OFPI shareholders have not approved
           the OI merger agreement at the OFPI special meeting (provided
            that the right to terminate will not be available to any party
             that breached in any material respect its obligations under the
             OI merger agreement in a manner that contributed to the failure
to obtain that shareholder approval);             

o    by OI if:                                              

             i.   the Board of Directors of OFPI has failed to recommend, or
                for any reason withdrawn or has amended or modified in a
                  manner adverse to OI its unanimous recommendation in favor
                  of, the OI merger or approval or adoption of the OI merger
agreement;                              

ii.  OFPI has failed to include in the joint proxy
                statement/prospectus the unanimous recommendation of the
                    Board of Directors of OFPI in favor of approval and adoption
     of the OI merger agreement and the OI merger;

           iii. the Board of Directors of OFPI has approved, endorsed or
recommended any Acquisition Proposal;   

        iv.  OFPI has entered into any letter of intent or similar
            document or any contract relating to any Acquisition
Proposal;                               

               v.   OFPI has failed to hold the OFPI special meeting as promptly
                as practicable and in any event within 45 days after the
                 definitive joint proxy statement/prospectus is filed with
the SEC;                                

            vi.  a tender or exchange offer relating to securities of OFPI
       has been commenced and OFPI has not sent to its
            securityholders, within five business days after the
                  commencement of such tender or exchange offer, a statement
                   disclosing that OFPI recommends rejection of such tender or
exchange offer;                         

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              vii. an Acquisition Proposal is publicly announced, and OFPI (a)
                   fails to issue a press release announcing its opposition to
                 such Acquisition Proposal within five business days after
               such Acquisition Proposal is announced or (b) otherwise
              fails to actively oppose such Acquisition Proposal; or

             viii. a person or group (as defined in the Exchange Act and the
                   rules promulgated thereunder) shall have acquired more than
                    fifty percent of OFPI's voting securities (excluding persons
                   and groups that, as of the date of the OI merger agreement,
                  hold more than fifty percent of OFPI's voting securities).

        o    by OFPI or OI if the other party has materially breached any of
             its representations, warranties, covenants or agreements in the
          OI merger agreement, provided that if the breaching party is
               exercising reasonable efforts to cure such breach, then the other
            party may not terminate the OI merger agreement. Neither party
          may terminate the agreement if it shall have breached in any
             material respect its obligations under the OI merger agreement.

Employment Agreements                                                           

    The OI merger agreement is conditioned upon the execution of an employment
agreement between OFPI and Joseph Stern upon terms that are mutually            
satisfactory to OPFI and Mr. Stern. A form of employment agreement is attached  
to this joint proxy statement/prospectus as Annex E. See "Management--Employment
Agreements."                                                                    

Shareholder Lock-up Agreements                                                  

The OI merger is conditioned upon the execution of one-year "lock-up" 
agreements by each of the OI shareholders. A form of this lock-up agreement is  
attached to this joint proxy statement/prospectus as Annex F. Under the terms of
the lock-up agreement, each OI shareholder will agree to refrain from selling or
otherwise transferring any OFPI securities, or rights to acquire any OFPI       
securities, that he owns or later acquires, until after the first anniversary of
the closing of the OI merger. For more information on the holdings of Messrs.   
Stern and Battendieri, OI's shareholders, see "Principal Shareholders."         

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THE SPECTRUM AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
AND THE RELATED AGREEMENTS

     Please note that the following description of the Spectrum merger agreement
is a summary only. You should read the following summary and the Spectrum merger
agreement attached as Annex B for a full understanding of the Spectrum merger   
agreement. The Spectrum merger agreement is incorporated by reference into this 
joint proxy statement/prospectus.                                               

Effective Time; Effect of Spectrum Merger                                       

    The Spectrum merger will become effective upon the filing of a Certificate
of Merger with the Secretary of State of the State of California (the "Spectrum 
Effective Time"). The closing of the Spectrum merger (the "Spectrum Closing")   
will occur at the offices of Cooley Godward LLP, One Maritime Plaza, 20th Floor,
San Francisco, California 94111 at a time and on a date to be specified by the  
parties, which will be no later than the second day after the satisfaction or   
waiver of the conditions to the Spectrum merger (the "Spectrum Closing Date").  
The Certificate of Merger will be filed on the Spectrum Closing Date. The       
Spectrum Closing and the Spectrum Effective Time are anticipated to be on or    
about August 31, 1999.                                                          

   At the Spectrum Effective Time (a) Spectrum shall be merged with and into
OFPI, (b) the separate corporate existence of Spectrum shall cease, and (c) OFPI
shall be the surviving corporation under the name "Spectrum Organic Products,   
Inc."                                                                           

Conversion of Shares                                                            

At the Spectrum Effective Time, by virtue of the Spectrum merger and  
without any action on the part of Spectrum or the holders of Spectrum           
securities, each outstanding share of Spectrum common stock, will be canceled   
and converted into 4,669.53 shares of OFPI common stock.                        

     The exchange ratio of 4,669.53 to 1 will be adjusted for, or OFPI will make
appropriate provisions to reflect the effect of, any stock split, reverse split,
stock dividend, extraordinary dividend or distribution, reorganization,         
recapitalization or other like change with respect to OFPI common stock or      
Spectrum common stock occurring or having a record or effective date after the  
date of the Spectrum merger agreement.                                          

    The exchange ratio between the Spectrum common stock and OFPI common stock
is related to the number of OFPI shares outstanding as of the date of the       
Spectrum merger, including shares of OFPI common stock issued in the OI merger. 
Shares issued pursuant to any OFPI options or warrants outstanding immediately  
prior to the Spectrum merger that are exercised after the closing of the        
Spectrum merger will result in additional shares being issued to the Spectrum   
shareholders. The number of outstanding shares of OFPI common stock used for    
such calculation may also be adjusted downward if a specified number of shares  
currently held in escrow relating to OFPI's acquisition of Sunny Farms          
Corporation are cancelled prior to the closing of the Spectrum merger. The      
exchange ratio is based in part upon the average closing price of OFPI's common 
stock for the three days prior to the announcement of the mergers. The exchange 
ratio may be adjusted if Spectrum and OFPI are required to use a different      
valuation method.                                                               

  No fractional shares will be issued by virtue of the Spectrum merger. In
lieu of a fraction of a share of OFPI common stock, each Spectrum shareholder   
will receive (after all fractional shares to be received by such holder are     

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aggregated) from OFPI an amount of cash (rounded down to the nearest whole cent)
equal to the product of (a) such fraction, multiplied by (b) the closing price  
of a share of OFPI common stock on the Spectrum Closing Date, as reported on the
NASD OTC Bulletin Board system or other applicable market.                      

Treatment of Options and Warrants                                               

  At the Spectrum Effective Time, OFPI will assume all options to purchase
Spectrum common stock then outstanding under Spectrum's 1998 Equity Incentive   
Plan as described below under "-- Employee Benefits." As of June 1, 1999 there  
were options to purchase a total of 180 shares of Spectrum common stock         
outstanding, which will represent options to purchase approximately 840,515     
shares of OFPI common stock. Each Spectrum stock option, whether or not         
exercisable at the Spectrum Effective Time, to the full extent permitted by     
applicable law, shall be assumed by OFPI in a manner so that it shall be        
exercisable after the Spectrum Effective Time upon the same terms and conditions
as under the Spectrum Stock Option Plan pursuant to which it was granted and the
applicable option agreement issued thereunder. See the more detailed discussion 
under "Employee Benefits" below.                                                

     Within 5 business days after the Spectrum Effective Time, OFPI shall file a
registration statement on Form S-8 with the SEC relating to such stock options. 

Stock Ownership Following the Spectrum Merger                                   

     Based on the capitalization of Spectrum as of the close of business on July
1, 1999 and the 4,669.53 to 1 exchange ratio, an aggregate of approximately     
36,286,495 shares of OFPI common stock will be issued to Spectrum shareholders  
in the Spectrum merger. At the Spectrum Effective Time, OFPI will assume all    
options outstanding immediately prior to the Spectrum Effective Time under the  
Spectrum Stock Option Plans. Based on the number of shares of OFPI common stock 
issued and outstanding as of June 1, 1999, and after giving effect to the       
issuance of OFPI common stock in the Spectrum merger and the OI merger, the     
former holders of Spectrum common stock would hold, and have voting power with  
respect to approximately 73.8% of OFPI's total issued and outstanding shares    
immediately after the Spectrum Effective Time. Holders of former Spectrum       
options would hold options and rights to acquire approximately 1.9% of the total
issued and outstanding shares of OFPI common stock immediately after the        
Spectrum Effective Time (assuming the exercise of only such options and rights).

Representations and Warranties                                                  

Spectrum and OFPI have made representations in the Spectrum merger    
agreement relating to, among other things:                                      

     o    their respective capitalization and organization and similar
corporate matters;                                
     o    authorization, execution, delivery and enforceability of the
Spectrum merger agreement;                        
  o    conflicts under governing documents, required consents or
 approvals, and violations of any agreements or law;
       o    financial statements and documents filed with the SEC (if any)
and the accuracy of information contained therein;
o    absence of material adverse events, changes or effects;
o    tax matters relating to the proposed merger;           
o    the absence of undisclosed liabilities;                
o    compliance with laws, including food and drug laws;    
o    litigation;                                            

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o    intellectual property matters;                         
         o    the disclosure and enforceability of certain material contracts;
    o    compliance with environmental and tax laws and regulations;
o    retirement and other employee plans and matters;       
      o    certain business matters relating to permits and licenses and
insurance;                                        
 o    liabilities relating to employees, labor unions or other
organizations;                                    
o    finders and brokers;                                   
          o    title to property; accounts receivable, inventory, equipment; and
o    insurance.                                             

The representations and warranties of Spectrum or OFPI in the Spectrum
merger agreement described above will survive for two years after the Spectrum  
Effective Time.                                                                 

 In addition, Spectrum and OFPI have agreed to make representations that
will serve as the basis for the tax opinions of Carr, McClellan and Cooley      
Godward described under "The Mergers -- Material Federal Income Tax             
Consequences."                                                                  

Conduct of OFPI's Business and Spectrum's Business Prior to the Spectrum Merger 

    During the period from the date of the Spectrum merger agreement until the
Spectrum Effective Time, each of Spectrum and OFPI has agreed to:               

(a)  conduct its business and operations in the ordinary course and in
      substantially the same manner as such business and operations have
      been conducted prior to the date of the Spectrum merger agreement;

(b)  use reasonable efforts to preserve intact its current business   
         organization, keep available the services of its current officers and
         employees and maintain its relations and goodwill with all suppliers,
       customers, landlords, creditors, employees and other persons having
business relationships with it or any of its subsidiaries;  

    (c)  keep in full force all insurance policies in effect as of the date of
the Spectrum merger agreement; and                          

 (d)  cause its officers to report regularly to OFPI or Spectrum, as the
case may be, concerning the status of its business.         

     The Spectrum merger agreement further provides that, during the period from
the date of the Spectrum merger agreement until the Spectrum Effective Time,    
Spectrum or OFPI will not, subject to certain exceptions, take any of the       
following actions:                                                              

(a)  declare, accrue, set aside or pay any dividend or make any other 
         distribution in respect of any shares of capital stock, and shall not
         repurchase, redeem or otherwise reacquire any shares of capital stock
       or other securities (other than repurchases of unvested shares from
Spectrum employees upon termination of employment);         

    (b)  not sell, issue or authorize the issuance of (i) any capital stock or
          other security, (ii) any option, call, warrant or right to acquire, or
  relating to, any capital stock or other security, or (iii) any
        instrument convertible into or exchangeable for any capital stock or
      other security (except that: (a) Spectrum or OFPI may issue common
        stock upon the exercise of outstanding options or upon conversion of

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convertible securities outstanding on the date of the merger
      agreement, (b) Spectrum may continue to grant stock options in the
        ordinary course and consistent with past practice, provided that any
         such options shall be subject to Spectrum's standard vesting schedule
         (but such options shall not vest more than 25% per year following the
     grant thereof) and in no event shall any such options contain any
         provisions pursuant to which the vesting of such options may or would
        be accelerated in any respect upon any change in control transaction
  or any other transaction (including the merger) or any similar
        provision, and (c) OFPI may issue shares of OFPI common stock in the
OI merger);                                                 

 (c)  amend or waive any of its rights under, or (except pursuant to the
         terms of OFPI options outstanding on the date of the merger agreement
    that provide for automatic acceleration upon consummation of the
     merger) permit the acceleration of vesting under any provision of
       OFPI's stock plans, any provision of any Spectrum or OFPI agreement
         evidencing any outstanding option or warrant, or any provision of any
restricted stock purchase agreement;                        

    (d)  amend or permit the adoption of any amendment to Spectrum's or OFPI's
        articles of incorporation or bylaws, or effect or permit Spectrum or
     OFPI, or their subsidiaries, to become a party to any acquisition
    transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;          

   (e)  form any subsidiary or acquire any equity interest or other interest
in any other entity;                                        

  (f)  make any capital expenditure, except for capital expenditures that,
       when added to all other capital expenditures made during the period
     from the date of the Spectrum merger agreement until the Spectrum
         Effective Time, do not exceed, in the case of Spectrum, $100,000, and
in the case of OFPI, $50,000, in the aggregate;             

   (g)  (i) enter into or become bound by, or permit any of the assets owned
          or used by it to become bound by, any material contracts except in the
        ordinary course of business, or (ii) amend or prematurely terminate,
        or waive any material right or remedy under, any material contracts;

 (h)  (i) acquire, lease or license any material right or other material
      asset from any other person, (ii) sell or otherwise dispose of, or
       lease or license, any material right or other material asset to any
        other person, or (iii) waive or relinquish any material right, other
     than in the ordinary course of business and except for immaterial
        assets acquired, leased, licensed or disposed of by Spectrum or OFPI
pursuant to contracts that are not material contracts;      

(i)  (i) lend money to any person, or (ii) incur or guarantee any     
         indebtedness, except for routine advances of expenses to employees in
        the ordinary course of business and except that Spectrum or OFPI may
        make routine borrowings in the ordinary course of business under its
existing bank lines of credit;                              

     (j)  (i) pay any bonus or make any profit-sharing or similar payment to, or
          increase the amount of the wages, salary, commissions, fringe benefits
or other compensation or remuneration payable to, any of its
          directors, officers or employees, other than in the ordinary course of
         business and solely with respect to non-officers and non-directors or
(ii) establish, adopt or amend any employee benefit plan;   

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     (k)  change any of its methods of accounting or accounting practices in any
respect;                                                    

(l)  make any tax election;                                           

     (m)  commence or settle any legal proceeding not disclosed in Spectrum's or
OFPI's disclosure schedule to the Spectrum merger agreement;

    (n)  enter into any material transaction or take any other material action
         outside the ordinary course of business or inconsistent with its past
practices; and                                              

    (o)  agree or commit to take any of the actions described in clauses "(a)"
through "(n)" described above.                              

Conduct of Business Following the Spectrum Merger                               

Pursuant to the Spectrum merger, Spectrum will cease to exist as a    
corporation and will be merged with and into OFPI, with OFPI as the surviving   
corporation. All property, rights, privileges, powers and franchises of Spectrum
will vest in OFPI; all debts, liabilities and duties of Spectrum will become the
debts, liabilities and duties of OFPI. OFPI shall change its name to "Spectrum  
Organic Products, Inc."                                                         

Pursuant to the Spectrum merger agreement, OFPI shall file Amended and
Restated Articles of Incorporation attached hereto as Annex D. The bylaws of    
OFPI are the bylaws attached as Exhibit D to the Spectrum merger agreement. The 
directors and officers of OFPI are the individuals listed on Exhibit C to the   
Spectrum merger agreement.                                                      

No Solicitation                                                                 

    During the period from the date of the Spectrum merger agreement until the
Spectrum Effective Time, each of Spectrum and OFPI has agreed that it shall not,
and shall cause its subsidiaries not to, and shall cause its and its            
subsidiaries' respective officers and directors not to:                         

         o    solicit, initiate, encourage or induce the making, submission or
            announcement of any Acquisition Proposal (as defined below) or
     take any action (excluding any press releases issued in
               connection with the announcement of the execution of the Spectrum
               merger agreement) that could reasonably be expected to lead to an
Acquisition Proposal,                             

   o    furnish any information regarding Spectrum or OFPI, or its
       subsidiaries, to any third party in connection with or in
response to an Acquisition Proposal,              

    o    continue or engage in discussions with any third party with
respect to any Acquisition Proposal,              

   o    approve, endorse or recommend any Acquisition Proposal, or

   o    enter into any letter of intent or similar document or any
             contract contemplating or otherwise relating to any Acquisition
Proposal.                                         

For the purposes of the Spectrum merger agreement, an "Acquisition    
Proposal" means any offer or proposal made by a third party for:                

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       o    any sale, lease exchange, transfer or other disposition of the
           assets of Spectrum or OFPI, or its subsidiaries, constituting
              more than 10% of the consolidated assets of Spectrum or OFPI, or
          accounting for more than 10% of the consolidated revenues of
               Spectrum or OFPI in any one transaction or in a series of related
transactions;                                     

   o    any offer to purchase, tender offer, exchange offer or any
               similar transaction or series of related transactions made by any
              third party involving more than 10% of the outstanding shares of
             capital stock of Spectrum or OFPI, or any shares of the capital
stock of any of its subsidiaries;                 

         o    any merger, consolidation, business combination, share exchange,
              reorganization or other similar transaction or series of related
              transactions involving Spectrum or OFPI, or its subsidiaries; or

          o    any assignment, transfer or licensing or other disposition of, in
            whole or in part, certain intellectual property, other than in
the ordinary course of business.                  

   Spectrum or OFPI may furnish information regarding it or its subsidiaries
to, or enter discussions with, a third party in response to a Superior Proposal 
(as defined below) if:                                                          

         o    Spectrum's or OFPI's Board of Directors concludes in good faith,
              based upon the written advice of its outside legal counsel, that
        such action is required in order for such party's Board of
              Directors to comply with its fiduciary obligations to Spectrum's
or OFPI's shareholders, under applicable law,     

      o    prior to furnishing any such information to, or entering into
            discussions with, such third party, Spectrum or OFPI gives the
               other party written notice of the identity of the third party and
             of Spectrum's or OFPI's intention to furnish information to, or
            enter into discussions with, such third party, and Spectrum or
              OFPI, receives from such third party an executed confidentiality
       agreement containing customary limitations on the use and
              disclosure of all written and oral information furnished to such
third party by or on behalf of Spectrum or OFPI,  

     o    prior to furnishing any such information to any third party,
            Spectrum or OFPI furnishes such information to the other party
     (to the extent such information has not been previously
furnished), and                                   

         o    Spectrum or OFPI, or any of its representatives has not violated
any of the restrictions set forth above.          

     For purposes of the Spectrum merger agreement, the term "Superior Proposal"
means an unsolicited, bona fide written proposed Acquisition Proposal submitted 
by a third party that Spectrum's or OFPI's Board of Directors determines in good
faith, based upon the written advice of its financial advisor, to be more       
favorable from a financial point of view to Spectrum's or OFPI's shareholders   
than the terms of the Spectrum merger; provided, however, that any such         
Acquisition Proposal shall not be deemed to be a "Superior Proposal" if any     
financing required to consummate the transaction contemplated by such offer is  
not committed at the time such Acquisition Proposal is made.                    

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  In addition, each of Spectrum and OFPI has agreed to promptly inform the
other party orally and in writing of any Acquisition Proposal (including the    
identity of the third party making such Acquisition Proposal and its terms).    
Spectrum and OFPI have also agreed to keep the other party informed regarding   
the status of any such Acquisition Proposal.                                    

Fees, Expenses and Termination Fees                                             

 Except as set forth below, all fees and expenses incurred in connection
with the Spectrum merger agreement and the transactions contemplated thereby    
will be paid by the party that incurs them. OFPI has agreed to pay fees and     
expenses incurred by Spectrum in connection with the merger and the Spectrum    
merger agreement if:                                                            

      o    the Spectrum merger agreement is terminated by either OFPI or
               Spectrum because the OFPI shareholders do not approve the merger;
or                                                

        o    the Spectrum merger agreement is terminated by Spectrum because
            the OFPI Board fails to recommend the approval of the Spectrum
            merger agreement to OFPI shareholders, or withdraws, amends or
             modifies in a manner adverse to Spectrum its recommendations to
              OFPI shareholders for approval of the Spectrum merger agreement.

Conditions to the Spectrum Merger                                               

The respective obligations of Spectrum and OFPI to effect the Spectrum
merger are subject to the satisfaction or waiver in writing at or prior to the  
Spectrum Effective Time of the following conditions:                            

          o    the representations and warranties of Spectrum or OFPI, contained
           in the Spectrum merger agreement are accurate in all material
       respects as of the date of the Spectrum merger agreement;

     o    Spectrum or OFPI, has performed and complied in all material
        respects with all covenants or obligations required by the
              Spectrum merger agreement to be performed or complied with on or
prior to the Spectrum Closing Date;               

       o    all consents listed in each of Spectrum's or OFPI's disclosure
           schedule have been obtained and are in full force and effect;

          o    Spectrum and OFPI shareholders have duly approved and adopted the
Spectrum merger agreement and the Spectrum merger;

     o    the SEC has declared effective the Registration Statement of
            which this joint proxy statement/prospectus is a part, and the
           Registration Statement shall not be subject to any stop order
         suspending that effectiveness or proceedings seeking a stop
order;                                            

   o    OFPI and Spectrum have received legal opinions from Cooley
          Godward LLP and Carr, McClellan, Ingersoll, Thompson & Horn,
respectively;                                     

     o    OFPI and Spectrum have received opinions of Carr, McClellan,
              Ingersoll, Thompson & Horn and Cooley Godward LLP, respectively,
      to the effect that the Spectrum merger will constitute a
              reorganization within the meaning of Section 368(a) of the Code;

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 o    no temporary restraining order, preliminary or permanent
           injunction or other orders preventing the consummation of the
               merger or otherwise makes it illegal has been issued by any court
of competent jurisdiction; and                    

          o    a Compliance Certificate signed by the Chief Executive Officer of
             Spectrum or OFPI, evidencing compliance with the conditions set
              forth in the Spectrum merger agreement has been delivered to the
other party.                                      

    In addition, the obligations of OFPI to consummate and effect the Spectrum
merger are also subject to the satisfaction or waiver at or prior to the        
Spectrum Effective Time, of the following condition, which may be waived by     
OFPI:                                                                           

         o    Spectrum Commodities has merged with and into Spectrum Naturals.

In addition, the obligations of Spectrum to consummate and effect the 
Spectrum merger are subject to the satisfaction or waiver at or prior to the    
Spectrum Effective Time, of each of the following conditions, any of which may  
be waived by Spectrum:                                                          

  o    Spectrum has received written resignations from specified
directors of OFPI;                                

       o    OFPI has acquired 100% of the outstanding capital stock of OI;

         o    OFPI has entered into Shareholder Lock-up Agreements prohibiting
            specified shareholders from transferring any OFPI common stock
              beneficially owned by such persons for a period of one year from
the Spectrum Closing Date;                        

     o    OFPI has entered into employment agreements with non-compete
         provisions with each of Jethren Phillips, John Battendieri,
  Joseph Stern, Richard Bacigalupi and Neil Blomquist;

        o    Spectrum, OFPI and OI have refinanced their existing credit and
         loan arrangements in a manner satisfactory to Spectrum; and

  o    No more than five percent of OFPI's shareholders shall be
eligible for dissenters' rights.                  

 Currently, both OFPI and Spectrum anticipate that they will satisfy all
conditions to the Spectrum merger at or prior to consummation of the Spectrum   
merger.                                                                         

Termination of the Spectrum Merger Agreement                                    

 The Spectrum merger agreement provides that it may be terminated at any
time prior to the Spectrum Effective Time, whether before or after approval of  
the Spectrum merger by the Spectrum shareholders:                               

o    by mutual written consent of OFPI and Spectrum;        

         o    by either OFPI or Spectrum if the Spectrum merger shall not have
               been consummated on or before August 31, 1999 (unless the failure
               to consummate the Spectrum merger is attributable to a failure on
            the part of the party seeking to terminate the Spectrum merger
         agreement to perform any material obligation required to be
           performed by such party at or prior to the Spectrum Effective
Time);                                            

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        o    by either OFPI or Spectrum if a court of competent jurisdiction
 or other governmental entity has issued a final and
              non-appealable order, decree, ruling, or taken any other action,
            that permanently restrains, enjoins or otherwise prohibits the
Spectrum merger;                                  

     o    by either OFPI or Spectrum if the OFPI shareholders have not
        approved the Spectrum merger agreement at the OFPI special
       meeting (provided that the right to terminate will not be
              available to any party that breached in any material respect its
              obligations under the Spectrum merger agreement in a manner that
              contributed to the failure to obtain that shareholder approval);

         o    by either OFPI or Spectrum if the Spectrum shareholders have not
            approved the Spectrum merger agreement at the Spectrum special
       meeting (provided that the right to terminate will not be
              available to any party that breached in any material respect its
              obligations under the Spectrum merger agreement in a manner that
              contributed to the failure to obtain that shareholder approval);

o    by Spectrum if:                                        

             i.   the Board of Directors of OFPI has failed to recommend, or
                for any reason withdrawn or has amended or modified in a
                  manner adverse to Spectrum its unanimous recommendation in
                    favor of, the Spectrum merger or approval or adoption of the
Spectrum merger agreement;              

ii.  OFPI has failed to include in the joint proxy
                statement/prospectus the unanimous recommendation of the
                    Board of Directors of OFPI in favor of approval and adoption
                 of the Spectrum merger agreement and the Spectrum merger;

           iii. the Board of Directors of OFPI has approved, endorsed or
recommended any Acquisition Proposal;   

        iv.  OFPI has entered into any letter of intent or similar
            document or any contract relating to any Acquisition
Proposal;                               

               v.   OFPI has failed to hold the OFPI special meeting as promptly
                as practicable and in any event within 45 days after the
                 definitive joint proxy statement/prospectus is filed with
the SEC;                                

            vi.  a tender or exchange offer relating to securities of OFPI
       has been commenced and OFPI has not sent to its
            securityholders, within five business days after the
                  commencement of such tender or exchange offer, a statement
                   disclosing that OFPI recommends rejection of such tender or
exchange offer;                         

              vii. an Acquisition Proposal is publicly announced, and OFPI (a)
                   fails to issue a press release announcing its opposition to
                 such Acquisition Proposal within five business days after
               such Acquisition Proposal is announced or (b) otherwise
              fails to actively oppose such Acquisition Proposal; or

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             viii. a person or group (as defined in the Exchange Act and the
                   rules promulgated thereunder) shall have acquired more than
                    fifty percent of OFPI's voting securities (excluding persons
              and groups that, as of the date of the Spectrum merger
                agreement, hold more than fifty percent of OFPI's voting
securities).                            

o    by OFPI if:                                            

              i.   the Board of Directors of Spectrum has failed to recommend,
               or has withdrawn or has amended or modified in a manner
                 adverse to OFPI its unanimous recommendation in favor of,
                   the Spectrum merger or approval or adoption of the Spectrum
merger agreement;                       

    ii.  Spectrum has failed to include in the joint proxy
                statement/prospectus the unanimous recommendation of the
               Board of Directors of Spectrum in favor of approval and
                  adoption of the Spectrum merger agreement and the Spectrum
merger;                                 

               iii. the Board of Directors of Spectrum has approved, endorsed or
recommended any Acquisition Proposal;   

            vi.  Spectrum has entered into any letter of intent or similar
            document or any contract relating to any Acquisition
Proposal;                               

              v.   Spectrum has failed to hold the Spectrum special meeting as
               promptly as practicable and in any event within 45 days
                after the definitive joint proxy statement/prospectus is
filed with the SEC;                     

       vi.  a tender or exchange offer relating to securities of
                    Spectrum has been commenced and Spectrum has not sent to its
            securityholders, within five business days after the
                  commencement of such tender or exchange offer, a statement
                    disclosing that Spectrum recommends rejection of such tender
or exchange offer;                      

              vii. an Acquisition Proposal is publicly announced, and Spectrum
                    (a) fails to issue a press release announcing its opposition
                    to such Acquisition Proposal within five business days after
               such Acquisition Proposal is announced or (b) otherwise
              fails to actively oppose such Acquisition Proposal; or

             viii. a person or group (as defined in the Exchange Act and the
                   rules promulgated thereunder) shall have acquired more than
                    fifty percent of the Spectrum's voting securities (excluding
               persons and groups that, as of the date of the Spectrum
                    merger agreement, hold more than fifty percent of Spectrum's
voting securities.                      

       o    by OFPI or Spectrum if the other party has materially breached
             any of its representations, warranties, covenants or agreements
              in the Spectrum merger agreement, provided that if the breaching

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              party is exercising reasonable efforts to cure such breach, then
              the other party may not terminate the Spectrum merger agreement.
        Neither party may terminate the agreement if it shall have
        breached in any material respect its obligations under the
Spectrum merger agreement.                        

Employee Benefits                                                               

     At the Spectrum Effective Time, OFPI will assume each outstanding option to
purchase shares of Spectrum common stock under the Spectrum 1998 Equity         
Incentive Plan, whether that option is vested or unvested. Each Spectrum stock  
option assumed by OFPI will continue to have and be subject to substantially the
same terms and conditions as applied under the Spectrum Stock Option Plan and   
related documents, except that:                                                 

     o    each such Spectrum stock option will be exercisable for that
              number of whole shares of OFPI common stock equal to the product
        of the number of shares of Spectrum common stock that were
          issuable on exercise of such option immediately prior to the
               Spectrum Effective Time, multiplied by the 4,669.53 to 1 exchange
              ratio, and rounded down to the nearest whole number of shares of
OFPI common stock; and                            

         o    the per share exercise price for the shares of OFPI common stock
              issuable on exercise of the Spectrum stock option will equal the
             quotient determined by dividing the exercise price per share of
        Spectrum common stock at which that option was exercisable
              immediately prior to the Spectrum Effective Time by the 4,669.53
        to 1 exchange ratio, rounded up to the nearest whole cent.

     If any shares of Spectrum common stock outstanding immediately prior to the
Spectrum Effective Time are unvested or are subject to a repurchase option, risk
of forfeiture or other condition under any applicable restricted stock purchase 
agreement or other agreement with Spectrum, then the shares of OFPI common stock
issued in exchange for such shares of Spectrum common stock will also be        
unvested and subject to the same repurchase option, risk of forfeiture or other 
condition, and the certificates representing such shares of OFPI common stock   
may accordingly be marked with appropriate legends. Spectrum shall take all     
action that may be necessary to ensure that, from and after the Spectrum        
Effective Time, OFPI is entitled to exercise any such repurchase option or other
right set forth in any such restricted stock purchase agreement or other        
agreement.                                                                      

  No later than five business days after the Spectrum Effective Time, OFPI
will file a Registration Statement on Form S-8 under the Securities Act of 1933 
covering the shares of OFPI common stock issuable pursuant to outstanding       
options and rights to purchase Spectrum common stock assumed by OFPI pursuant to
the Spectrum merger.                                                            

Employment Agreements                                                           

The Spectrum merger agreement is conditioned upon the execution of    
employment agreements between OFPI and each of Jethren Phillips, John           
Battendieri, Joseph Stern, Richard Bacigalupi and Neil Blomquist upon terms that
are mutually satisfactory to OPFI and Spectrum. A form of employment agreement  
is attached to this joint proxy statement/prospectus as Annex E. See            
"Management--Employment Agreements."                                            

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Shareholder Lock-up Agreements                                                  

     The Spectrum merger is conditioned upon the execution of one-year "lock-up"
agreements by shareholders and optionholders of Spectrum. A form of this lock-up
agreement is attached to this joint proxy statement/prospectus as Annex F. Under
the terms of the lock-up agreement, each Spectrum shareholder or optionholder   
will agree to refrain from selling or otherwise transferring any OFPI           
securities, or rights to acquire any OFPI securities, that he owns or later     
acquires, until after the first anniversary of the closing of the Spectrum      
merger. For more information on the holdings of Messrs. Phillips and Blomquist, 
Spectrum's shareholders (and Mr. Blomquist is Spectrum's sole optionholder), see
"Principal Shareholders."                                                       

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MANAGEMENT

Proposed Directors and Executive Officers of Combined Company                   

    Certain information as of May 14, 1999 regarding OFPI's proposed directors
and executive officers, as contemplated by the Spectrum merger and OI merger, is
set forth below.                                                                

Name                               Age     Position                             
----                               ---     --------                             
Jethren Phillips (l) ...........    48     Chief Executive Officer and Chairman 
                  of the Board
Richard R. Bacigalupi...........    49     Chief Financial Officer and Treasurer
Neil Blomquist..................    47     President of Retail Brands and       
                         Corporate Secretary
Joseph Stern....................    46     President of Industrial Ingredients  
John Battendieri................    52     Vice President of Product Development
                  and Director
Phillip Moore (1) (2)...........    49     Director                             

----------------                                                                
(1)      Member of the Compensation Committee.                                  
(2)      Member of the Audit Committee.                                         

  Jethren Phillips founded Spectrum in November 1980 and has served as its
Chief Executive Officer and Chairman of the Board of Directors since its        
inception. Prior to founding Spectrum, he was a principal of Spectrum Brokerage,
a natural foods brokerage and product development company, from 1978 to 1981. In
1995, Mr. Phillips founded Spectrum Commodities, an organic and natural food    
ingredients company, and has served as its Chief Executive Officer and Chairman 
of the Board since its inception.                                               

  Richard R. Bacigalupi has served as OFPI's Chief Financial Officer since
January 1999. Prior to joining OFPI, he served as the Chief Financial Officer   
for PowerBar, Inc., a branded consumer product company, from February 1995 to   
May 1998. From October 1991 to April 1994, Mr. Bacigalupi served as Corporate   
Controller for Spreckels Industries, Inc., a sugar processing and equipment     
manufacturing company. Mr. Bacigalupi is a Certified Public Accountant and holds
a bachelor of science degree in business administration from California State   
University, Fresno.                                                             

Neil Blomquist has served as Spectrum's President and Chief Operating 
Officer since January 1994, and served as its director of sales and marketing   
from 1989 to 1994. Mr. Blomquist has served on the board of directors of the    
California Olive Oil Council since 1996. Mr. Blomquist holds a bachelor's degree
in business management and economics from the University of South Dakota.       

   Joseph Stern co-founded and has served as OI's President since June 1996.
Prior to joining OI, he founded Creative Team Consulting, a consulting company, 
which he operated from 1992 to 1996. From 1985 to 1991, Mr. Stern was President 
of United News, which was the fourth largest publication distributor in the     
United States when Mr. Stern sold that business to Charles Levy Company in 1991.
Mr. Stern holds a bachelor's degree in science from Penn State University. Prior
to that, Mr. Stern founded Earthly Organics, a natural and organic food         
distributor, and served as its President from 1975 to 1985, when it was sold to 
Cornucopia (now United Natural Foods).                                          

   John Battendieri founded OFPI in 1988 and has served as its President and
as a director since 1988 and as its Chief Executive Officer since October 1998. 
In 1987, he founded Santa Cruz Naturals, an organic fruit juice company, which  
was sold to J.M. Smucker Company, a food products and condiments company, in    

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1992. Mr. Battendieri has grown, developed and marketed a wide variety of       
natural food products for more than 25 years. He has also served as a director  
of OI since its inception. Mr. Battendieri attended Southern Illinois           
University.                                                                     

Phillip Moore founded Moore Consulting, a mergers and acquisition     
consulting firm, in April 1996. Prior to that, he was the owner of Perimeter    
Sales & Merchandising, a food brokerage firm, from September 1995 to April 1996.
From 1981 to September 1995, Mr. Moore served in various capacities for         
McCormick & Company, Incorporated, a seasonings and specialty foods company. Mr.
Moore holds a bachelor's degree in accounting from Guilford College.            

   OFPI's board of directors currently is comprised of three directors, with
two vacancies. Directors are elected by the shareholders at each annual meeting 
of shareholders to serve until the next annual meeting of shareholders or until 
their successors are duly elected and qualified. Upon the closing of the        
mergers, Jethren Phillips and Phillip Moore will be appointed to the OFPI Board,
and Kenneth Steel, Jr. and Charles Bonner will resign from the OFPI board.      

Compensation Committee Interlocks and Insider Participation                     

    None of OFPI's executive officers are members of the board of directors or
compensation committee of any entity that has one or more executive officers    
serving as a member of OFPI's board of directors. Following the mergers, none of
OFPI's executive officers will serve as members of the board of directors or    
compensation committee of any entity (other than OFPI) that has one or more     
executive officers serving as a member of OFPI's board of directors.            

Board Committees                                                                

     The audit committee of the OFPI board of directors, currently consisting of
Messrs. Steel and Bonner, reviews the internal accounting procedures of OFPI and
consults with and reviews the services provided by OFPI's independent auditors. 
The compensation committee of the OFPI board of directors, also currently       
consisting of Messrs. Steel and Bonner, reviews and recommends to the OFPI board
the compensation and benefits for OFPI's executive officers. Following the      
merger, OFPI's board of directors intends to appoint Mr. Moore and another      
non-employee director to be named after the mergers to the audit committee, and 
Messrs. Moore and Phillips to the compensation committee. Mr. Phillips will not 
participate in any decisions relating to his compensation.                      

Director Compensation                                                           

OFPI's non-employee directors do not receive any cash compensation as 
directors, although they are reimbursed for out-of-pocket expenses in attending 
board of directors' meetings. Mr. Steel received options to purchase 20,000     
shares of OFPI common stock at $2.50 per share and 30,000 shares of OFPI common 
stock at $2.00 per share. Mr. Bonner received options to purchase 20,000 shares 
of OFPI common stock at $2.50 per share and 5,000 shares of OFPI common stock at
$2.00 per share.                                                                

Employment Agreements                                                           

Upon the completion of the mergers, OFPI will enter into employment   
agreements with Jethren Phillips, Richard Bacigalupi, Neil Blomquist, Joseph    
Stern and John Battendieri to serve as the executive officers of OFPI, in the   
capacities set forth in "Management--Proposed Directors and Executive Officers  
of Combined Company."                                                           

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  Under the terms of the employment agreement, in addition to compensation
and benefits, each executive is eligible for annual bonuses in amounts          
determined in accordance with performance objectives. Each executive also agrees
not to solicit any employee, customer or supplier of OFPI while employed by OFPI
and for two years thereafter. Furthermore, each executive agrees not to compete 
with OFPI in any line of business engaged in (or planned to be engaged in) by   
OFPI.                                                                           

Indemnification and Limitation of Director and Officers Liability               

     OFPI's Restated Articles of Incorporation limits the liability of directors
to the maximum extent permitted by California law. California law provides that 
directors of a corporation will not be personally liable for monetary damages   
for breach of their fiduciary duties as directors, except liability for:        

     o    acts or omissions that involve intentional misconduct or a knowing and
culpable violation of law;                                  

    o    acts or omissions that a director believes to be contrary to the best
        interests of the corporation or its shareholders or that involve the
absence of good faith on the part of the director;          

 o    any transaction from which a director derived an improper personal
benefit; or                                                 

  o    acts or omissions that show a reckless disregard for the director's
         duty to the corporation or its shareholders in circumstances in which
      the director was aware, or should have been aware, in the ordinary
         course of performing a director's duties, of a risk of serious injury
to the corporation or its shareholders.                     

  Such limitation of liability does not apply to liabilities arising under
the federal securities laws and does not affect the availability of equitable   
remedies such as injunctive relief or rescission.                               

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Executive Compensation                                                          

    The following table sets forth the annualized compensation awarded or paid
by OFPI during the fiscal years ended June 30, 1998 and 1997 and OFPI's Chief   
Executive Officers and four other most highly compensated officers whose annual 
salary and bonus exceeded $100,000 in fiscal 1998 and 1997 (hereinafter, the    
"Named Executive Officers").                                                    

                                                        [Enlarge/Download Table]

                                              Summary Compensation Table                                              
                                                                                                          Long-Term   
                                                                                                        Compensation  
                                                                          Annual Compensation              Awards     
                                                                          -------------------              ------     
                                                                                             Other                    
                                            Underlying                                      Annual       Securities   
                                              Fiscal                                        Compen-      Underlying   
Name and Principal Position                   Year           Salary ($)      Bonus ($)     sation ($)    Options      
---------------------------                   ----           ----------      ---------     ----------    -------      
                                                                                                                      
Floyd R. Hill (1).....................        1998            $123,000         --             --           200,000 (2)
      Chief Executive Officer                 1997            $110,000                                                
                                              1996            $ 85,000                                                
James F. Swallow (3)...................       1998                --           --             --         1,808,784 (3)
      Chief Executive Officer                                                                                         
John Battendieri......................        1998            $114,000         --          $168,000(5)       --       
      President                               1997            $110,000         --             --             --       
                                              1996            $220,000         --             --             --       
Donald Ladwig (6).....................        1998                --           --             --             --       
      Vice President of Sales and Marketing   1997            $100,000         --            $5,000          --       

----------                                                                      
(1)  Mr. Hill was OFPI's Chief Executive Officer during fiscal 1998 from July 1,
1997 through May 8, 1998.                                             

(2)  Of these options, 100,000 were terminated by agreement upon Mr. Hill's     
departure from OFPI in 1998.                                          

(3)  Mr. Swallow was OFPI's Chief Executive Officer during fiscal 1998 from May 
     9, 1998 through June 30, 1998. In fiscal 1998, OFPI paid consulting fees of
     $62,000 to Global National Brands, of which Mr. Swallow is a principal, and
he did not receive a salary from OFPI.                                

(4)  Includes 1,808,784 shares issuable pursuant to options granted to Global   
Natural Brands, Ltd., attributable to Mr. Swallow through his partial 
     ownership of Global. These options expired in October 1998 upon termination
     of the management services agreement between OFPI and Global. See "Business
of OFPI - Legal Proceedings."                                         

(5)  Represents forgiveness of debt. See "Certain Transactions."                

(6)  Mr. Ladwig left OFPI in 1997.                                              

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3                                                                               

Option Grants in Last Fiscal Year                                               

    The following table sets forth each grant of stock options made during the
fiscal year ended June 30, 1998 to each of the Named Executive Officers:        

                                                        [Enlarge/Download Table]


                                                  Individual Grants                                          
                  -----------------------------------------------------------                                
                                      Percentage                                                             
                                       of Total                                 Potential Realizable Value of
                  Number of            Options                                    Assumed Annual Rates of    
                   Securities         Granted to                                  Stock Price Appreciation   
                   Underlying         Employees     Exercise                         For Option Term (4)     
                     Options           In Fiscal     Price        Expiration         -------------------     
Name              Granted (#)(1)      Year (%)(2)   ($/sh)(3)        Date             5%($)        10%($)    
----              --------------      -----------   ---------        ----            -----        ------     

                                                                                                             
James F. Swallow    1,808,784            100%         $2.25       Variable (5)          --            --     

----------                                                                      
(1)  Options generally vest at a rate 20% on the first anniversary of the       
 vesting commencement date and 1/48th each month thereafter. The term of
     each option granted is generally the earlier of (i) ten years or 60-90 days
after termination of the optionee's services to OFPI. Options are     
 immediately exercisable; however, the unvested shares purchasable under
   such options subject to repurchase by OFPI at the original exercise price
paid per share upon the optionee's cessation-of service prior to the  
vesting of such shares.                                               

(2)  Based on an aggregate of 1,808,784 options granted to employees,           
 consultants and directors (including options granted to Global National
   Brands pursuant to a management agreement), including the Named Executive
Officers, of OFPI during the fiscal year ended June 30, 1998.         

(3)  The exercise price per share of each option was equal to the fair market   
value of the common stock on the date of grant as determined by OFPI's
board of directors.                                                   

(4)  The potential realizable value is calculated based on the term of the      
     option at its time of grant (ten years). It is calculated assuming that the
   fair market value of OFPI's common stock on the date of grant appreciates
     at the indicated annual rate compounded annually for the entire term of the
 option and that the option is exercised and sold on the last day of its
term for the appreciated stock price.                                 

(5)  These options were granted to Global National Brands. The vesting of these 
    options was based upon the achievement of performance milestones that were
specified in a management agreement with Global. These milestones were
never achieved and the options have subsequently been cancelled.      

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Aggregate Option Exercises in Fiscal 1998 and June 30, 1998 Option Values       

                                                        [Enlarge/Download Table]


                   Number of Securities Underlying       Value of Unexercised In-the-Money
    Name          Unexercised Options of June 30, 1998      Option of June 30, 1998 (1)   
    ----          ------------------------------------      ---------------------------   

                  Exercisable            Unexercisable   Exercisable         Unexercisable
                  -----------            -------------   -----------         -------------
                                                                                          
Floyd R. Hill       300,000                    --          $366,250               --      
James F. Swallow      --                  1,808,784 (2)       --               $2,939,274 
Donald Ladwig         --                     10,000 (2)       --                $16,250   


----------                                                                      
(1)  Based on a fair market value of $3.3875 per share as of June 30, 1998. See 
"Price Range of Common Stock."                                        

(2)  All of these options have subsequently been cancelled.                     

There were no exercises of options by any Named Executive Officer in  
the fiscal year ended June 30, 1998.                                            

Employee Benefit Plan                                                           

   In November 1995, OFPI adopted its 1995 Stock Option Plan, which provides
for the grant of stock options intended to qualify as "incentive stock options" 
or "nonqualified stock options" within the meaning of Section 422 o the United  
States Internal Revenue Code of 1986. Incentive stock options are issuable only 
to eligible officers, directors and key employees of OFPI.                      

The 1995 Plan is administered by the OFPI board of directors. OFPI has
reserved 625,000 shares of common stock for issuance under the 1995 Plan. Under 
the 1995 Plan, the board of directors determines which individuals shall receive
stock options, the time period during which the options may be partially or     
fully exercised, the number of shares of common stock that may be purchased     
under each option and the option price.                                         

    For incentive stock options (i) the per share exercise price of the common
stock may not be less than the fair market value of the common stock on the date
the option is granted and (ii) no person who owns, directly or indirectly, at   
the time of the granting of an incentive stock option, more than 10% of the     
total combined voting power of all classes of stock of OFPI is eligible to      
receive stock options unless the option price is at least 110% of the fair      
market value of the common stock subject to the option on the date of grant.    

  No stock options may be transferred by an optionee other than by will or
the laws of descent and distribution and, during the lifetime of an optionee,   
the option may only be exercisable by the optionee. Stock options may be        
exercised only if the option holder remains continuously associated with OFPI   
from the date of grant to the date of exercise. Stock options under the 1995    
Plan must be granted within ten years from the effective date of the 1995 Plan. 
The exercise date of a stock option granted under the 1995 Plan cannot be later 
than ten years from the date of grant. Any options that expire unexercised or   
that terminate upon an optionee's ceasing to be employed by OFPI become         
available once again for issuance. Shares issued upon exercise of an option will
rank equally with other shares then outstanding.                                

     As of March 31, 1999, 437,000 stock options were outstanding under the 1995
Plan for officers, directors and employees (84,000 for executive officers and   
directors) at exercise prices of $2.00 to $3.34 per share.                      

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PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the OFPI's common stock as of June 3, 1999, and as      
adjusted to reflect the sale of the shares of common stock offered pursuant to  
the Spectrum merger and the OI merger for (i) each of the combined company's    
proposed executive officers, (ii) each of the combined company's proposed       
directors, (iii) each holder of more than 5% of OFPI's common stock prior to the
mergers, (iv) OFPI's current executive officers and directors and (v) all       
proposed directors and executive officers of the combined company as a group.   

                                                        [Enlarge/Download Table]


                                           Shares Beneficially Owned       Shares Beneficially Owned 
                                           Prior to The Offering (1)         After The Offering (2)  
  Beneficial Owner                         Number              Percent     Number            Percent 
  ----------------                         ------              -------     ------            ------- 

                                                                                                     
Jethren Phillips (3) ....................      --                --     31,519,328             71.9% 
John Battendieri (4) .................... 2,102,499             27.8%    4,077,499              9.3% 
Sunny Farms Corp. (5) ...................   566,667              7.5%      566,667              1.3% 
 2400 Florida Avenue                                                                                 
 Richmond, CA ...........................                                                            
Steven Reedy ............................   450,000              6.0%      450,000              1.0% 
 1104 San Mateo Avenue                                                                               
 San Francisco, CA ......................                                                            
Dean Nicholson ..........................   442,750              5.9%      442,750              1.0% 
 2609 Hillside Drive                                                                                 
 Burlingame, CA .........................                                                            
Neil Blomquist (6) ......................      --                --      1,657,683              3.7% 
Kenneth A. Steel, Jr. (7) ...............   380,019              5.0%      380,019              *    
Charles Bonner (8) ......................    25,000              *          25,000              *    
Joseph Stern (9) ........................     2,000              *       1,977,000              4.5% 
Phillip Moore (10) ......................    48,000              *         366,000              *    
Richard R. Bacigalupi (11) ..............      --                --           --                 --  
All proposed directors and                                                                           
 executive officers of the                                                                           
 combined company as a                                                                               
 group (six persons) (12) ............... 2,152,499             28.5%   39,597,510              87.9%


----------                                                                      
* Less than 1%.                                                           

(1)  Percentage of beneficial ownership prior to the offering is based on       
    7,559,002 shares of OFPI common stock outstanding as of June 3, 1999. Does
not include outstanding options to purchase 207,000 shares at exercise
 prices ranging from $2.00 to $3.34, or outstanding warrants to purchase
 590,656 shares at exercise prices ranging from $2.00 to $4.00. Includes
 295,833 shares held in an escrow related to OFPI's acquisition of Sunny
Farms Corporation, a portion of which are subject to cancellation.    
See "Certain Transactions."                                           
(2)  Percentage of beneficial ownership after the offering is based on          
approximately 36,286,495 shares to be issued in connection with the   
mergers.                                                              
(3)  The address for Mr. Phillips is c/o Spectrum Naturals, Inc., 133 Copeland  
     Street, Petaluma, CA 94952. Includes 31,519,328 shares issued in connection
with the Spectrum merger.                                             
(4)  The address for Mr. Battendieri is c/o Organic Food Products, Inc., 550    
  Monterey Road, Suite B, Morgan Hill, CA 95037. Includes 1,975,000 shares
issued in connection with the OI merger.                              

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(5)  Includes 295,833 shares held in escrow, a portion of which are subject to  
cancellation. See "Certain Transactions."                             
(6)  Includes (i) 817,167 shares and (ii) 840,515 shares issuable upon the early
    exercise of options vesting through October 2001, 210,128 of which will be
    fully vested and no longer subject to repurchase within 60 days of June 3,
1999, each issued in connection with the Spectrum merger. The 840,515 
 options are exercisable at an exercise price of approximately $0.32 per
share.                                                                
(7)  Includes 50,000 shares issuable upon exercise of options exercisable within
    60 days of June 3, 1999 at exercise prices ranging from $2.00 to $2.50 per
    share, and 25,328 shares issuable upon warrants exercisable within 60 days
   of June 3, 1999 at $2.625 per share. Also includes 25,328 shares issuable
upon warrants exercisable within 60 days of June 3, 1999 at $2.625 per
     share, which are beneficially owned by Mr. Steel and belong to his brother,
Robert Steel.                                                         
(8)  Includes 25,000 shares issuable upon exercise of options exercisable within
    60 days of June 3, 1999 at exercise prices ranging from $2.00 to $2.50 per
share.                                                                
(9)  Includes 1,975,000 shares issued in connection with the OI merger.         
(10) Includes approximately 318,000 shares to be paid to Moore Consulting upon  
the completion of the mergers. See "Certain Transactions."            
(11) Does not include 418,000 shares issuable upon exercise of options to be    
  granted on or prior to the closing of the mergers, none of which will be
exercisable within 60 days of June 3, 1999.                           
(12) Includes 841,123 shares issuable upon the early exercise of options vesting
  through October 2001, 78,855 of which will be fully vested and no longer
 subject to repurchase within 60 days of June 3, 1999, and approximately
318,000 shares to be issued upon completion of the mergers.           

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CERTAIN TRANSACTIONS

  John Battendieri, OFPI's current Chief Executive Officer and Chairman of
the Board, is also currently a director and 50% shareholder of OI. Mr.          
Battendieri abstained from voting as a director of OI and OFPI upon matters     
relating to each other company. Following the mergers, Mr. Battendieri will be  
Vice President of Product Development and a director of OFPI.                   

     In October 1998, OFPI and OI entered into a joint venture arrangement under
which the two companies provide private label products to manufacturers and     
retailers. Under this arrangement, OFPI and OI are currently producing juice    
concentrates, applesauces, and fruit juices. OFPI and OI share equally the      
inventory costs and gross profit under the arrangement, except with respect to  
one customer where OI receives the first 10% of the gross margin, after which   
OFPI and OI share the remainder equally. Total revenue generated under the      
arrangement as of March 31, 1999 was approximately $68,000. OFPI's total        
purchases from OI under this arrangement amounted to approximately $368,000     
during fiscal 1998 and approximately $82,000 for the nine months ended March 31,
1999. OFPI management believes that the price of, and terms for, the ingredients
purchased from OI were fair, reasonable and consistent with prices and terms    
that would be available to OFPI from third parties.                             

In June 1996, Mr. Battendieri entered into a three-year employment    
agreement with OFPI that provides for an annual salary of $110,000. The         
agreement originally called for non-interest bearing loans of $7,000 per month  
during the full term of the employment agreement repayable the earlier of August
1999 or upon termination of the agreement. As of June 30, 1998, OFPI had loaned 
an aggregate of $168,000 loaned to Mr. Battendieri, and that amount was forgiven
by OFPI effective as of June 30, 1998. OFPI agreed to the loan arrangement as a 
negotiated part of the 1996 merger that created OFPI. This agreement will be    
terminated and replaced upon the closing of the mergers. See                    
"Management--Employment Agreements."                                            

   Spectrum has agreed to pay to Moore Consulting, of which Phillip Moore, a
proposed director of OFPI following the mergers, is a principal, a fee upon the 
closing of the Spectrum merger. Based upon OFPI's closing stock price for the   
three days preceding the announcement of the signing of the Spectrum merger     
letter of intent, Spectrum expects to pay to Moore Consulting a fee of          
approximately $375,000. This fee will be paid in $187,500 of cash and           
approximately 265,000 shares of OFPI common stock. Spectrum intends to hire     
Moore Consulting on an ongoing basis after the completion of the mergers.       

Moore Consulting is also a sub-contractor for Monterey Bay Corporate  
Development, an investment consulting firm, which has a fee arrangement with OI.
Under the sub-contracting arrangement, Moore Consulting will be paid            
approximately $37,500 and approximately 53,000 shares of OFPI stock by OI upon  
the completion of the OI merger.                                                

Spectrum has entered into a co-packing and distribution agreement with
Tummy Pleasers, Inc. Tummy Pleasers is developing a food product under the name 
"Chocolate Spoonfuls." Under this agreement, Spectrum will pay for all          
pre-launch development costs of the Chocolate Spoonfuls product, as well as all 
sales, marketing and distribution costs. It is intended that Spectrum will      
receive the gross and net profit margin from any sales, and that Tummy Pleasers 
will license the use of the Chocolate Spoonfuls trademark to Spectrum. Jethren  
Phillips, the Chief Executive Officer, Chairman of the Board and 95% shareholder
of Spectrum, owns 39% of Tummy Pleasers' capital stock and Neil Blomquist, the  
President, Chief Operating Officer, a director and a five percent shareholder of
Spectrum, owns 19% of Tummy Pleasers' capital stock.                            

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   In connection with the February 1998 acquisition of assets related to the
juice and water bottling business of Sunny Farms Corporation, OFPI issued in the
name of Sunny Farms an aggregate of 566,667 shares of common stock. Of these    
shares, 295,833 were placed in escrow, and were to be released only upon the    
attainment of certain performance milestones by the acquired business unit.     
Since the acquisition, Sunny Farms has filed for bankruptcy and OFPI is         
negotiating with Sunny Farms' bankruptcy trustee to determine the amount, if    
any, of shares of stock that should be released to Sunny Farms from escrow, the 
remainder of which would be cancelled. If at least 107,516 shares are released, 
Sunny Farms would own at least five percent of OFPI's shares of stock           
outstanding as of June 3, 1999.                                                 

 In October 1995, OFPI entered into an agreement with Dean Nicholson and
Steven Reedy, each of whom own at least five percent of the outstanding stock of
OFPI as of June 3, 1999, pursuant to which OFPI agreed to repurchase from these 
individuals an aggregate of 1,100,000 shares of OFPI's common stock at $2.00 per
share for a total purchase price of $2,200,000. OFPI paid Messrs. Nicholson and 
Reedy an aggregate of $1,340,000 and was required to pay an additional $860,000 
of the purchase price by July 31, 1999. The unpaid balance of $497,238 was      
payable in installments of $40,000 per month with interest at the rate of 6.0%  
per annum. OFPI is currently in default under this agreement.                   

    In October 1995, OFPI entered into an agreement with Kenneth Steel, Jr., a
director of OFPI, under which it borrowed $500,000 from Mr. Steel for working   
capital. The loan bore interest at 10.25% per annum and was due March 31, 1996. 
In February 1996, Mr. Steel converted the principal amount of the loan into     
250,000 shares of OFPI's common stock at $2.00 per share.                       

     In April 1998, OFPI entered into an agreement with Global pursuant to which
Global was to provide the services of four individuals to fill the offices of   
Chief Executive Officer, Chief Financial Officer, Vice President of Sales and   
Distribution, and Vice President, Marketing. The contract provided for minimum  
annual cash payments to Global of $300,000, with escalations based on certain   
earnings performance and acquisition attainment conditions. In addition, up to  
1,808,784 options issued to Global to purchase OFPI's common stock would have   
vested over a five-year period based on the achievement of certain stock price  
targets and earnings milestones. The options would have been exercisable at     
$2.25 per share and would have had terms of four years from the date of vesting.
Upon any change in ownership interest of more than 50% of the capital stock of  
OFPI, the balance of the minimum annual cash payments for the remaining         
contractual term would have become due and payable and all stock options would  
have vested immediately. The management agreement with Global was terminated in 
October 1998 and all options issued to Global were cancelled.                   

   In connection with the management agreement with Global, Global purchased
222,222 shares of OFPI common stock in June 1998 for an aggregate of $500,000,  
and had committed to invest an additional $500,000 before the earlier of 30 days
after completion of a qualified acquisition transaction or April 15, 1999. The  
agreement targeted the value of such additional purchases at $2.50 per share,   
with adjustments to account for specified market conditions.                    

   Each of OI, Spectrum and OFPI, as applicable, believes that the foregoing
transactions were in its best interest and were made on terms no less favorable 
to such company than could have been obtained from unaffiliated third parties.  
All future transactions between OFPI and any of its officers, directors or      
principal shareholders will be approved by a majority of the independent and    
disinterested members of the OFPI board of directors, will be on terms no less  
favorable to OFPI than could be obtained from unaffiliated third parties and    
will be in connection with bona fide business purposes of OFPI.                 

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 DESCRIPTION OF OI CAPITAL STOCK

 The authorized capital stock of OI consists of 100,000 shares of common
stock, without par value, of which as of the date of this joint proxy           
statement/prospectus 100,000 shares are outstanding.                            

OI Common Stock                                                                 

     Holders of OI common stock have one vote per share on all matters submitted
to a vote of shareholders. Cumulative voting for election of directors is       
permitted. The holders of OI common stock have the right to receive dividends if
they are declared by the OI board of directors and there are sufficient funds to
legally pay dividends. Upon the liquidation of OI, holders of OI common stock   
would share ratably in any assets available for distribution to shareholders    
after payment of all obligations of OI.                                         

   The OI common stock is not redeemable and has no preemptive, subscription
or conversion rights. Shares of OI common stock currently outstanding are       
validly issued, fully paid and nonassessable.                                   

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 DESCRIPTION OF SPECTRUM CAPITAL STOCK

The authorized capital stock of Spectrum consists of 100,000 shares of
common stock, without par value, of which as of the date of this joint proxy    
statement/prospectus 6,925 shares are outstanding.                              

Spectrum Common Stock                                                           

 Holders of Spectrum common stock have one vote per share on all matters
submitted to a vote of shareholders. Cumulative voting for election of directors
is permitted. The holders of Spectrum common stock have the right to receive    
dividends if they are declared by the Spectrum board of directors and there are 
sufficient funds to legally pay dividends. Upon the liquidation of Spectrum,    
holders of Spectrum common stock would share ratably in any assets available for
distribution to shareholders after payment of all obligations of Spectrum.      

The Spectrum common stock is not redeemable and has no preemptive,    
subscription or conversion rights. Shares of Spectrum common stock currently    
outstanding are validly issued, fully paid and nonassessable.                   

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 DESCRIPTION OF OFPI CAPITAL STOCK

The authorized capital stock of OFPI consists of 20,000,000 shares of 
common stock, without par value, of which, as of June 3, 1999, approximately    
7,567,002 shares were outstanding, and 5,000,000 shares of preferred stock,     
without par value, none of which were outstanding as of June 3, 1999.           

OFPI Common Stock                                                               

Holders of OFPI common stock have one vote per share on all matters   
submitted to a vote of shareholders. Cumulative voting for election of directors
is permitted. The holders of OFPI common stock have the right to receive        
dividends if they are declared by the OFPI Board and there are sufficient funds 
to legally pay dividends, subject to the rights of the holders of any           
outstanding OFPI preferred stock to receive preferential dividends. Upon the    
liquidation of OFPI, holders of OFPI common stock would share ratably in any    
assets available for distribution to shareholders after payment of all          
obligations of OFPI and the aggregate liquidation preference (including accrued 
and unpaid dividends) of any outstanding OFPI preferred stock.                  

     The OFPI common stock is not redeemable and has no preemptive, subscription
or conversion rights. Shares of OFPI common stock currently outstanding are, and
the OFPI common stock to be issued in the merger will be, validly issued, fully 
paid and nonassessable.                                                         

    Corporate Stock Transfer, Inc. is the transfer agent and registrar for the
OFPI common stock.                                                              

OFPI Preferred Stock                                                            

    The authorized OFPI preferred stock is available for issuance from time to
time at the discretion of the OFPI Board without shareholder approval. The OFPI 
Board has authority to prescribe for each series of OFPI preferred stock it     
establishes the number of shares in that series, the dividend rate, and the     
voting rights, conversion privileges, redemption, sinking fund and liquidation  
rights, if any, and any other rights, preferences, qualifications and           
limitations of the particular series. The issuance of OFPI preferred stock could
decrease the amount of earnings and assets available for distribution to the    
holders of OFPI common stock or adversely affect the rights and powers,         
including voting rights, of the holders of OFPI common stock. OFPI has no       
present plans to issue any OFPI preferred stock.                                

OFPI Warrants                                                                   

    As of June 3, 1999, OFPI had outstanding warrants to purchase an aggregate
of 590,659 shares of OFPI common stock at exercise prices ranging from $2.00 to 
$4.00 per share. The warrants expire at various times ranging from December 31, 
1999 to February 11, 2003. Generally, each warrant contains provision for the   
adjustment of the exercise price and the aggregate number of shares issuable    
upon the exercise of the warrant under certain circumstances, including stock   
dividends, stock splits, reorganizations, reclassifications, consolidations and 
certain dilutive issuances of securities at prices below the then existing      
warrant exercise price. All warrants are currently exercisable.                 

OFPI Registration Rights                                                        

 Pursuant to agreements between OFPI and the holders (or their permitted
transferees) ("Holders") of approximately 425,000 shares of OFPI common stock   
and warrants to purchase 590,659 shares of OFPI common stock, certain of the    
Holders are entitled to certain rights with respect to the registration of such 
shares under the Securities Act. If OFPI proposes to register its common stock  
under the Securities Act, subject to certain exceptions, certain of the Holders 
are entitled to notice of the registration and are entitled at the OFPI's       
expense to include such shares therein. In addition, certain of the Holders may 
require OFPI, at its expense to file a registration statement under the         
Securities Act with respect to their shares of OFPI common stock. Further, OFPI 
has granted certain of the Holders piggy-back registration rights.              

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 COMPARISON OF RIGHTS OF HOLDERS OF OI COMMON STOCK, SPECTRU
COMMON STOCK AND OFPI COMMON STOCK

 Upon consummation of the mergers, the holders of OI and Spectrum common
stock will become holders of OFPI common stock. Each of OI, Spectrum and OFPI   
are incorporated in the State of California. There are certain material         
differences between the rights and privileges of the holders of OI common stock 
and Spectrum common stock, and the holders of OFPI common stock.                

 Upon completion of the mergers, current Spectrum shareholders will hold
approximately 74.2% of the outstanding common stock of OFPI, current OI         
shareholders will hold approximately 8.8% of the outstanding common stock of    
OFPI and current OFPI shareholders will hold approximately 16.9% of the         
outstanding common stock of OFPI. The percentage ownership of OFPI by each      
current OFPI shareholder will be significantly reduced. Accordingly, current    
OFPI shareholders will have a significantly smaller degree of voting influence  
over the affairs of OFPI than they currently enjoy. In addition, the percentage 
ownership of OFPI by each former OI shareholder will be substantially less than 
shareholders current percentage ownership of OI, and the percentage ownership of
OFPI by each former Spectrum shareholder will be substantially less than that   
shareholder's current percentage ownership of Spectrum. Accordingly, former     
Spectrum and OI shareholders will have a significantly smaller voting influence 
over the affairs of OFPI than they currently enjoy over the affairs of Spectrum 
and OI.                                                                         

Authorized Capital                                                              

   OI. The total number of authorized shares of OI capital stock is 100,000,
without par value, all of which are shares of common stock.                     

   Spectrum. The total number of authorized shares of Spectrum capital stock
is 100,000, without par value, all of which are shares of common stock.         

OFPI. The total number of authorized shares of OFPI capital stock is  
25,000,000, without par value, consisting of 20,000,000 shares of common stock  
and 5,000,000 shares of preferred stock. No shares of preferred stock have been 
issued.                                                                         

Directors and Classes of Directors; Removal of Directors                        

     OI. The OI Bylaws provide that the number of directors shall be two. The OI
board of directors is not divided into classes. The Bylaws do not contain a     
provision regarding the removal of directors from office.                       

Spectrum. The Spectrum Bylaws set the number of directors at two. The 
Spectrum board of directors is not divided into classes. The Bylaws do not      
contain a provision regarding the removal of directors from office.             

    OFPI. OFPI's Bylaws set the number of OFPI's directors to five and provide
that an amendment to reduce the number of directors to a number less than five  
cannot be adopted if 16% of OFPI shareholders vote against its adoption. The    
OFPI board of directors is not divided into classes. The OFPI Bylaws do not     
contain a provision regarding the removal of directors from office.             

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Special Meetings of Shareholders                                                

  OI. Special meetings of OI shareholders may be called by the Chairman of
the Board of Directors, the President, the board of directors or by one or more 
shareholders entitled to cast at least 10% of votes at that meeting.            

  Spectrum. Special meetings of Spectrum shareholders may be called by the
Chairman of the Board of Directors, the President, the board of directors or by 
one or more shareholders entitled to cast at least 10% of the voting power of   
Spectrum.                                                                       

   OFPI. Special meetings of OFPI shareholders may be called by the Chairman
of the Board of Directors, the President, the board of directors or by one or   
more shareholders entitled to cast at least 10% of the votes at that meeting.   

Cumulative Voting                                                               

    OI. OI's Bylaws do not permit cumulative voting at a shareholders' meeting
at which directors are to be elected unless a candidate has been nominated prior
to commencement of the voting and a shareholder has given notice prior to       
commencement of the voting that he or she intends to cumulate votes. In such    
case, every shareholder entitled to vote may cumulate votes for nominated       
candidates.                                                                     

Spectrum. Spectrum's Bylaws allow a shareholder to cumulate his or her
votes with respect to election of a director.                                   

OFPI. OFPI's Bylaws do not permit cumulative voting at a shareholders'
meeting at which directors are to be elected unless a candidate has been        
nominated prior to commencement of the voting and a shareholder has given notice
prior to commencement of the voting that he or she intends to cumulate votes. In
such case, every shareholder entitled to vote may cumulate votes for nominated  
candidates.                                                                     

Actions by Shareholder Written Consent                                          

OI. The OI Bylaws permit any action that may be taken at a meeting of 
shareholders to be taken without a meeting if the written consent of            
shareholders holding outstanding shares having not less than the minimum number 
of votes that would be necessary to authorize or take that action at a meeting  
at which all shares entitled to vote on that action were present and voted;     
provided, however, in the case of election of directors, such written consent   
will be effective only if signed by the holders of all outstanding shares       
entitled to vote for the election of directors.                                 

Spectrum. The Spectrum Bylaws permit any action that may be taken at a
meeting of shareholders to be taken without a meeting if the written consent of 
shareholders holding outstanding shares having not less than the minimum number 
of votes that would be necessary to authorize or take that action at a meeting  
at which all shares entitled to vote on that action were present and voted.     

   OFPI. The OFPI Bylaws permit any action that may be taken at a meeting of
shareholders to be taken without a meeting if the written consent of            
shareholders holding outstanding shares having not less than the minimum number 
of votes that would be necessary to authorize or take that action at a meeting  
at which all shares entitled to vote on that action were present and voted;     
provided, however, in the case of election of directors, such written consent   
will be effective only if signed by the holders of all outstanding shares       
entitled to vote for the election of directors.                                 

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Amendment of Bylaws                                                             

   OI. The OI Bylaws may be amended or repealed or new bylaws adopted by the
holders of a majority of the outstanding shares entitled to vote or by the board
of directors; provided, however, that if the Articles of Incorporation sets     
forth the number of authorized directors, then the authorized number of         
directors may be changed only by an amendment of the Articles of Incorporation. 

 Spectrum. The Spectrum Bylaws may be amended or repealed or new by-laws
adopted by the affirmative vote of a majority of the outstanding shares entitled
to vote, except that an amendment of the Bylaws which changes the number of     
directors may be adopted, amended or repealed by the board of directors.        

   OFPI. The OFPI Bylaws may be amended or repealed or new bylaws adopted by
the affirmative vote of a majority of the outstanding shares entitled to vote or
by the board of directors; provided, however, that a bylaw amendment that       
specifies or changes the fixed number of directors or the maximum or minimum    
number, or changes from a fixed to a variable board (or vice versa), may only be
adopted by the approval of a majority of the outstanding shares entitled to     
vote.                                                                           

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OI MANAGEMENT'S DISCUSSION AND
 ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

Overview                                                                        

     OI is a leading supplier of industrial organic ingredients, including fruit
juices, fruit juice concentrates, fruit purees and individually quick frozen or 
"IQF" frozen fruits as well as vegetable juices, vegetable juice concentrates,  
vegetable purees, IQF vegetables and apple cider vinegar. OI sells industrial   
ingredients to a very broad list of customers that includes all of the major    
natural and organic food manufacturers in the United States and Canada, as well 
as some food manufacturers that have shifted production to organic food         
products. OI was formed in July 1996 as a limited liability company and was     
converted to a California corporation in January 1998. OI sells to a large      
variety of customers in Japan, Korea, New Zealand, Australia and the European   
Union. Currently, OI sources its raw materials from the Western states of the   
United States as well as Mexico, Canada, Costa Rica, Chile, Argentina, Turkey   
and Italy. OI sells directly to food manufacturers in the United States through 
its food broker, Beta Pure Foods. OI also sells its industrial ingredients      
through trading companies, especially in Japan.                                 

Results of Operations for the Three Months Ended March 31, 1999 Compared to the 
Three Months Ended March 31, 1998                                               

Revenues                                                              

    OI revenues decreased 32.6% to $1,323,870 for the three months ended March
31, 1999 from $1,963,912 in the three months ended March 31, 1998. The decrease 
resulted from a reduction in sales of puree and juice concentrate to Japanese   
customers due to the general economic slowdown in Asia and to a domestic        
customer who had sourced its own products instead of buying from OI.            

Cost of Goods Sold                                                    

 OI's cost of goods sold increased 0.4% as a percentage of sales for the
three months ended March 31, 1999 to 85.2% from 84.7% for the three months ended
March 31, 1998 due primarily to fluctuations in crop prices.                    

General and Administrative Expenses                                   

  General and administrative expenses increased slightly from $149,008 for
the three months ended March 31, 1998 to $150,571 for the three months ended    
March 31, 1999 due to cost of living salary adjustments.                        

Other Income and Expenses                                             

     Other income and expenses increased 52.3% from $30,393 for the three months
ended March 31, 1998 to $46,287 for the three months ended March 31, 1999. This 
increase was due to interest payments on OI's line of credit, which was utilized
to carry additional inventory.                                                  

Results of Operations  for the Year Ended December 31, 1998 Compared to the Year
Ended December 31, 1997                                                         

Revenues                                                              

 OI revenue increased 8.8% to $5,788,866 for the year ended December 31,
1998 from $5,319,356 for the year ended December 31, 1997. The increase resulted
primarily from additions of new product lines and improved market recognition.  
The new product lines included citrus, tomatoes, and vegetable juices.          

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Cost of Goods Sold                                                    

 OI's cost of goods sold increased 0.9% as a percentage of sales for the
year ended December 31, 1998 to 85.0% from 84.1% for the year ended December 31,
1997 due to fluctuations in crop prices and increased storage costs resulting   
from expanded inventory quantities. An additional $88,000 was written off to    
adjust inventory to the lower of cost or market in 1998.                        

General and Administrative Expenses                                   

   General and administrative expenses increased 34.5% from $486,913 for the
year ended December 31, 1997 to $654,800 for the year ended December 31, 1998   
due to the addition of two employees, a sales consultant and the leasing of     
additional office space.                                                        

Other Income and Expenses                                             

     Other income and expenses increased 535.7% from $17,176 to $109,185 for the
year ended December 31, 1998. This increase was due primarily to increased      
interest costs as a result of higher inventory and the amortization of goodwill 
in 1998.                                                                        

Liquidity and Capital Resources                                                 

  OI has available a $2,000,000 line of credit subject to a borrowing base
calculation. As of March 31, 1999, OI had utilized $1,240,814 of the line of    
credit. OI believes that its existing line of credit and current cash flow from 
operations will be sufficient to fund OI's estimated cash requirements for the  
next least eight to 12 months.                                                  

Year 2000 Compliance                                                            

    OI uses computer software that may be impacted by the "Year 2000" problem,
and also relies upon vendors of equipment and services whose products may be    
impacted by the Year 2000 problem. OI's Year 2000 compliance issues include:    

o    the equipment it uses in its manufacturing process;              

o    the hardware and third-party software it uses for corporate      
administration;                                             

o    the services of third-party providers it purchases for certain   
professional services; and                                  

     o    the external services such as telecommunications and electrical power.

     OI has initiated a plan that will attempt to identify all computer hardware
and software, plant equipment and services upon which it relies that may be     
impacted. After identification of any problem areas, OI will verify whether or  
not those products or services are Year 2000 compliant. The plan includes       
contacting those vendors or service providers to determine their compliance or  
plans to become compliant before December 31, 1999. It is the intent of OI to   
complete this process by December 31, 1999.                                     

   OI uses various pieces of equipment in its manufacturing process that may
contain computer chips that could be affected by the Year 2000 problem. OI has  
started, but not completed, a program to identify which pieces of equipment     
could be affected and how the affected equipment could be updated.              

OI's corporate administrative and operating systems are exclusively   
PC-based using a commercially available software package. OI has received       
written confirmation from the legal department of the software developer        
confirming that it is Year 2000 compliant.                                      

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    OI uses outside service providers for the processing and administration of
its payroll and insurance benefit programs. Although a survey of these service  
providers has not been completed, OI believes that these providers will have    
Year 2000-compliant systems.                                                    

    OI has not deferred any information technology projects to date due to the
need to assess or ensure Year 2000 compliance of its systems, and does not      
anticipate that any other information technology projects will be delayed in the
future due to the Year 2000 problem.                                            

   Although the total costs of compliance have not been completely assessed,
OI management does not believe they will be material in nature. OI believes it  
has or will achieve timely Year 2000 compliance in advance of December 31, 1999.
With respect to external companies that provide telecommunications and          
electrical power, OI is less certain about the impact of their non-compliance   
regarding the Year 2000 problem. The loss of these services would create a major
disruption of OI's normal operations. Given this scenario, OI would be required 
to obtain these services from other sources. The cost of switching to other     
utility providers has not been assessed.                                        

  Issues similar to these also face OI's customers and vendors. OI has not
yet completed an assessment of Year 2000 readiness of its customers and vendors.
However, based on initial discussions with certain customers and vendors,       
management does not currently believe that business with those customers and    
vendors will be significantly disrupted by the Year 2000 problem.               

Seasonality                                                                     

    Historically, OI has experienced some seasonal fluctuation in revenues. OI
occasionally contracts for certain product purchases for the entire year at     
harvest time, or at planting time, to secure raw materials throughout the year. 
These purchases take place annually from early spring to mid-summer, and are    
effected to reduce the risk of price swings due to demand and supply            
fluctuations. These annual purchases can create overages in inventory.          

New Applicable Accounting Pronouncements                                        

Effective January 1, 1999, OI adopted the Provisions of Statement of  
Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income.  
SFAS 130, which establishes standards for reporting and display of comprehensive
income and its components in the entity's financial statements. The objective of
SFAS 130 is to report a measure of all changes in the equity of an enterprise   
that result from transactions and other economic events of the period.          
Comprehensive income is the total of net income and all other non-owner changes 
in equity. SFAS 130 does not address issues of recognition or measurement for   
comprehensive income and its components and, therefore, had no impact on the    
financial condition or results of OI upon adoption. OI currently has no         
transactions that would be classified as elements of comprehensive income not   
reported in the Statement of Operations.                                        

    Effective January 1, 1999, OI also adopted the provisions of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. This       
Statement requires reporting of financial and descriptive information about     
reportable operating segments. Operating segments are components of an          
enterprise about which separate financial information is available that is      
evaluated regularly by the chief operating decision maker in deciding how to    
allocate resources and in assessing performance. OI believes it operates in only
one business segment, production and distribution of processed organic foods,   
and has already substantially complied with any additional disclosure           
requirements. SFAS 131 does not address issues of recognition or measurement in 
the basic financial statements, and thus had no impact on OI's financial        
condition or results of operation upon adoption.                                

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BUSINESS OF OI

Overview                                                                        

     OI is a leading supplier of industrial organic ingredients, including fruit
juices, fruit juice concentrates, fruit purees and individually quick frozen or 
"IQF" frozen fruits as well as vegetable juices, vegetable juice concentrates,  
vegetable purees, IQF vegetables and apple cider vinegar. OI sells industrial   
ingredients to a very broad list of customers that includes all of the major    
natural and organic food manufacturers in the United States and Canada, as well 
as some food manufacturers that have shifted production to organic food         
products. OI was formed in July 1996 as a limited liability company and was     
converted to a corporation in January 1998. OI sells to a large variety of      
customers in Japan, Korea, New Zealand, Australia and the European Union.       
Currently, OI sources its raw materials from the Western states of the United   
States as well as Mexico, Canada, Costa Rica, Chile, Argentina, Turkey and      
Italy. OI sells directly to food manufacturers in the United States through its 
food broker, Beta Pure Foods. OI also sells its industrial ingredients through  
trading companies, especially in Japan.                                         

 OI, through a joint venture with OFPI, has recently developed a private
label program and is currently packing products for customers such as Wild Oats 
Markets. OI is currently producing Wild Oats' 3+1 frozen juice concentrate and  
their line of apple products, and is negotiating a contract for their food      
service program. OI is a leading manufacturer of organic white grape juice      
concentrate in the United States and is a leading supplier of organic citrus    
products in the United States. OI has leveraged its experience and expertise in 
fruit-based products to expand its focus into the vegetable-based products      
market.                                                                         

Strategy                                                                        

 Through valued relationships with growers, suppliers and processors, OI
provides a diverse range of quality organic ingredients to the global           
marketplace while maintaining the integrity of OI's environment-friendly        
policies through dedication to the principles of sustainable agriculture.       

    OI's business strategy is to develop strategic alliances with various food
processors that allow OI to become the leading supplier of a vast array of      
organic commodities. OI currently has a contract with the second largest winery 
in the world to manufacture OI's organic white grape juice concentrate. This    
contract represents a substantial part of OI's business. OI currently plans to  
expand its product line to include Red, Concord, Muscat and Niagara grape juice 
concentrates as well. OI also has contracts with a number of other processors   
that provide significant, and in some cases, exclusive, agreements for the      
supply of citrus products, specifically single strength orange juice and apple  
juice concentrate, and for the production of organic vegetable juices and       
vegetable juice blends. OI has recently entered into a contract with a tomato   
packer to allow OI to source organic tomatoes as a low cost producer, which will
allow OI to supply OFPI with tomato ingredients at very low cost. OI's strategy 
is to continue to develop these strategic relationships with suppliers in order 
to develop a broad array of organic industrial ingredients for its customers.   

   OI also intends to continue to develop long term relationships with fruit
and vegetable growers so that OI can manage involved in the entire supply chain 
of various organic commodities in order to insure a consistent year round supply
for its customers. OI intends to continue using an outside food broker to       
fulfill the sales and marketing aspects of its business, which allows OI to     
reduce costs and expand sales and marketing resources as volume warrants. OI is 
currently negotiating a long-term brokerage contract with Beta Pure Foods, which

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is one of the largest organic food brokers in the United States, Canada, and    
Japan. Beta Pure Foods markets and sells the majority of all of OI's industrial 
organic ingredients.                                                            

     OI also intends to expand the categories of food commodities that it offers
in order to become a "one-stop shop" for industrial organic needs. OI's goal is 
to expand its product offerings beyond fruits and vegetables into grains and    
sweeteners.                                                                     

Products                                                                        

OI has an expansive offering of organic food products and ingredients:

Category                                    Variety             
--------                                    -------             
Citrus  Products                   single strength juice, concentrate, and      
                                  citrus byproducts, including oils, pulps and
                                 essences. All citrus products are made from
                         orange, lemon, grapefruit, lime and
tangerine.

Fruit  juices and juice            apple, pineapple, orange, lemon, lime,       
concentrates                       grapefruit, blackberry, cranberry, pear,     
                                   peach, raspberry, strawberry and white grape.

Fruit purees and fruit puree       apple, apricot, blackberry, kiwifruit, mango,
concentrates                       nectarine, peach, pear, strawberry and       
raspberry.

Vegetable juice and vegetable      beet, bellpepper, carrot, celery, lettuce,   
juice concentrates                 parsley, spinach, watercress, tomato,        
                             cabbage, cucumber, broccoli, garlic and
  cauliflower.

Vegetable purees                   butternut squash, cabbage, carrot, celery,   
                          eggplant, garlic, onion and spinach.

Essences                           apple, blackberry, peach, raspberry and      
strawberry

Vinegars                           apple cider, white wine and balsamic.        

Whole frozen fruit                 blackberries, raspberries and strawberries.  

Fresh bulk fruit                   apricots (including machine-pitted apricots),
                          apples, blackberries, grapes, pears,
                      kiwifruit, peaches, raspberries,
                         strawberries, nectarines and limes.

Fresh bulk vegetables and          beets, bell peppers, carrots, celery,        
prepared vegetables                lettuce, parsley, spinach, butternut squash, 
                                watercress, garlic, tomato paste and diced
tomatoes. 

 OI also offers private label programs for organic food retailers. These
programs include 3 + 1 frozen organic juice, ready-to-drink juices and          
lemonades, apple sauce and vinegar. Each of these products can be packaged in a 
variety of sizes and styles.                                                    

Sales and Marketing                                                             

     OI historically has sold all of its products through Beta Pure Foods, which
is an organic and non-organic food broker selling to food manufacturers         
worldwide. OI has utilized Beta as its primary sales and marketing agent, which 
has enabled OI to expand into new markets such as Japan, Korea, New Zealand,    
Australia and the European Union. OI is currently negotiating a new brokerage   
contract with Beta to ensure continued representation of OI for its current     
customer base. From time to time, OI utilizes the services of other food        
brokers. OI currently sells to food manufacturers in the United States and      

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Canada such as Gerber, H.J. Heinz, J.M. Smucker Company, Horizon Organic Dairy, 
Vita Mills, Mountain Sun, Wild Oats, Cascadian Farms and OFPI.                  

Manufacturing                                                                   

   OI currently uses over 25 different processing plants around the world to
co-pack its products. OI pays usage fees for each of these manufacturing        
facilities. OI's products are produced in a co-pack arrangement under a contract
with the processor or under a toll or fee arrangement for one-time production   
runs, depending on the product, commodity, and market conditions.               

    OI's raw materials come from growers across the United States and in other
countries. In some cases adverse weather conditions can impact OI's ability to  
procure enough raw materials. In the case of the organic white grape            
concentrate, a termination of OI's contract with its supplier could             
substantially affect its ability to produce the volume of organic white grape   
juice concentrate that OI would need to satisfy its customers.                  

Competition                                                                     

The natural and organic food industry is growing very rapidly and is  
intensely competitive, with more and more growers and manufacturers entering the
market for organic food products. OI's growers sometimes process their own crops
in competition with OI. From time to time, OI's co-packers develop products and 
source raw materials directly in competition with OI. Some products have limited
resources and if there is large demand, OI could face intense competition from  
its growers and co-packers using these items, as well as from other OI          
customers.                                                                      

OI competes with Small Planet Foods, which sells products under the   
Cascadian Farms and Muir Glen brands, in the industrial organic ingredients and 
tomato-based products markets. In some cases, OI competes with its own customers
where these customers have sourced ingredients directly and bypassed OI in the  
supply chain. In addition, some of OI's competitors also purchase products from 
OI. For example, Cascadian Farms buys white grape juice concentrate, fruit      
purees and citrus products from OI. In addition, J.M. Smucker Company, a        
customer for OI's citrus products, fruit juice and fruit puree, competes with OI
in the retail frozen juice and applesauce categories. Furthermore, Beta         
represents some of OI's competitors and directly sells products that are        
competitive to OI's products. A customer or supplier that competes with OI may  
elect to reduce its volume of purchases from OI, which would harm OI's business.

Employees                                                                       

   As of June 1, 1999, OI had six employees and used outside consultants for
some financial accounting, sales and marketing. OI's employees are not covered  
by any collective bargaining agreement and OI considers its relations with its  
employees to be good.                                                           

Property                                                                        

OI leases approximately 1,644 square feet of office space at its      
headquarters in Aptos, California, which is subject to a lease through September
1999. OI has recently given notice to extend that lease for one year.           

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SPECTRUM MANAGEMENT'S DISCUSSION AND
 ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

Overview                                                                        

Spectrum is a leading provider of natural and organic edible oils, condiments   
and essential fatty acid or "EFA" supplements. Since its incorporation in 1980, 
Spectrum has introduced innovative natural and organic products and has         
developed markets for its products worldwide. Spectrum has introduced           
chemical-free oils, flavorful natural condiments, and nutritionally rich EFA    
products to the marketplace, and has been integral in raising public awareness  
of the numerous health benefits of consuming EFAs as well as the differences    
between "good" and "bad" fats. Spectrum has developed the first certified       
organic olive oil, the first expeller-pressed canola oil, the first fresh       
organic flax oil, the first organic vinegars, and the first no tropical fat,    
non-dairy, non-hydrogenated condiment spread known as "Spectrum Spread."        
Spectrum's current lines of business consist of culinary oils, vinegars,        
mayonnaise, dressings and spreads under the "Spectrum Naturals" brand, branded  
food service/commissary sales to natural food retailers, delis, bakeries,       
restaurants, and other institutions, and EFA nutritional supplement oils under  
the "Spectrum Essentials" brand.                                                

Results of Operations for the Three Months Ended March 31, 1999 Compared to the 
Three Months Ended March 31, 1998                                               

Revenues                                                                        

Revenues increased 12.6% from $5,777,800 for the three months ended March 31,   
1998 to $6,506,300 for the three months ended March 31, 1999. The increase was  
due to growth in the natural food product marketplace.                          

Cost of Goods Sold                                                              

Cost of good sold for Spectrum as a percentage of revenue decreased from 64.6%, 
or $3,736,100, in the three months ended March 31, 1998, to 62.4%, or           
$4,057,500, in the three months ended March 31, 1999. This decrease resulted    
from reduced commodities costs in the first quarter of 1999 compared to the     
prior period, increased purchasing power in the first three months of 1999      
compared to the first three months of 1998, and improvements in production that 
allowed for per unit cost savings in the first quarter of 1999.                 

Operating Expenses                                                              

Spectrum's operating expenses increased 30.1% from $1,175,900 in the first      
quarter of 1998 to $1,530,100 in the first quarter of 1999. This increase was   
due primarily to costs associated with marketing for brand development through a
new media and direct mail campaign.                                             

Other Expenses                                                                  

Spectrum's other expenses decreased 32.4% from $151,700 in the first three      
months of 1998 to $102,600. This decrease was primarily due to the availability 
of more favorable interest rates on outstanding debt and a reduced use of       
Spectrum's line of credit.                                                      

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Results of Operations  for the Year Ended December 31, 1998 Compared to the Year
Ended December 31, 1997                                                         

Revenues                                                              

     Spectrum's sales increased 17.5% from $20,392,400 in 1997 to $23,951,000 in
1998. The increase was due to sales of existing products in a growing health    
food marketplace.                                                               

Cost of Goods Sold                                                    

Cost of goods sold as a percentage of revenues decreased from 65.1% of
sales in 1997 or $13,267,400, to 64.5% of sales in 1998 or $15,483,300. The     
decrease in the cost of goods sold as a percentage of revenue was due to lower  
raw material costs, more efficient manufacturing processes and a higher         
percentage of revenues coming from the higher margin Spectrum Essentials product
line.                                                                           

Operating Expenses                                                    

     Operating expenses increased 19.8% from $4,470,900 in 1997 to $5,356,500 in
1998. This increase was due primarily to increased sales and marketing related  
expenses resulting from the higher revenues, and increased general and          
administrative expenses as a result of one-time expenses associated with the    
efforts to sell the business.                                                   

Other Expenses                                                        

   Other expenses increased 30.4% from $391,000 in 1997 to $509,800 in 1998.
This increase was due to increased long-term debt to finance equipment purchases
and loss on disposal of assets due to write-off of non year-2000 compliant      
software and obsolete equipment.                                                

Liquidity and Capital Resources                                                 

  As of March 31, 1999 Spectrum had utilized $1,092,000 of an aggregate of
$2,600,000 in two separate revolving lines of credit with National Bank of the  
Redwoods and Bank of the West. The agreements require Spectrum to meet          
restrictions related to key financial ratios, cash flow, and non-bank debt, and 
are secured by substantially all assets of Spectrum, a life insurance policy in 
the name of the majority shareholder and the majority shareholder's personal    
guarantee. Spectrum also had $428,600 available from a $1,000,000 new equipment 
loan, which was fully utilized by June 30, 1999. Spectrum also has a number of  
long-term debt instruments aggregating approximately $3,600,000.                

 Spectrum believes that the existing credit line and term debt, together
with the current cash flow from operations, will be sufficient to fund          
Spectrum's estimated cash requirements for at least 12 months. Spectrum, however
may also need to raise additional capital through additional debt or the        
issuance of securities in private or public transactions to complete the        
mergers. There can be no assurance that acceptable financing for future         
transactions can be obtained. If such financing is sought by Spectrum, it may be
necessary to encumber Spectrum's assets that could be lost in the event of a    
default by Spectrum. Moreover, there can be no assurance that Spectrum will be  
able to generate sufficient funds to satisfy interest payments due on any such  
financing.                                                                      

Year 2000 Compliance                                                            

 Spectrum uses computer software that may be impacted by the "Year 2000"
problem, and also relies upon vendors of equipment and services whose products  
may be impacted by the Year 2000 problem. Spectrum's Year 2000 compliance issues
include:                                                                        

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o    the equipment it uses in its manufacturing process;              

o    the hardware and third-party software it uses for corporate      
administration;                                             

o    the services of third-party providers it purchases for certain   
professional services; and                                  

     o    the external services such as telecommunications and electrical power.

  Spectrum has initiated a plan that will attempt to identify all computer
hardware and software, plant equipment and services upon which it relies that   
may be impacted. After identification of any problem areas, Spectrum will verify
whether or not those products or services are Year 2000 compliant. The plan     
includes contacting those vendors or service providers to determine their       
compliance or plans to become compliant before December 31, 1999. It is the     
intent of Spectrum to complete this process by December 31, 1999.               

     Spectrum uses various pieces of equipment in its manufacturing process that
may contain computer chips that could be affected by the Year 2000 problem.     
Spectrum has started, but not completed, a program to identify which pieces of  
equipment could be affected and how the affected equipment could be updated.    

   Spectrum's corporate administrative and operating systems are exclusively
PC-based using a commercially available software package. Spectrum has received 
written confirmation from the legal department of the software developer        
confirming that it is Year 2000 compliant.                                      

Spectrum uses outside service providers for the processing and        
administration of its payroll, 401(k) retirement plan and insurance benefit     
programs. Although a survey of these service providers has not been completed,  
Spectrum believes that these providers will have Year 2000-compliant systems.   

   Spectrum has not deferred any information technology projects to date due
to the need to assess or ensure Year 2000 compliance of its systems, and does   
not anticipate that any other information technology projects will be delayed in
the future due to the Year 2000 problem.                                        

   Although the total costs of compliance have not been completely assessed,
Spectrum management does not believe they will be material in nature. Spectrum  
believes it has or will achieve timely Year 2000 compliance in advance of       
December 31, 1999. With respect to external companies that provide              
telecommunications and electrical power, Spectrum is less certain about the     
impact of their non-compliance regarding the Year 2000 problem. The loss of     
these services would create a major disruption of Spectrum's normal operations. 
Given this scenario, Spectrum would be required to obtain these services from   
other sources. The cost of switching to other utility providers has not been    
assessed.                                                                       

Issues similar to these also face Spectrum's customers and vendors.   
Spectrum has not yet completed an assessment of Year 2000 readiness of its      
customers and vendors. However, based on initial discussions with certain       
customers and vendors, management does not currently believe that business with 
those customers and vendors will be significantly disrupted by the Year 2000    
problem.                                                                        

Seasonality                                                                     

Historically, Spectrum has experienced little seasonal fluctuation in 
revenues. Spectrum occasionally contracts for certain product purchases for the 
entire year at harvest time, or at planting time, to secure raw materials       

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throughout the year. These purchases take place annually from early spring to   
mid-summer, and are effected to reduce the risk of price swings due to demand   
fluctuations. These annual purchases can create overages and shortages in       
inventory.                                                                      

New Applicable Accounting Pronouncements                                        

    Effective January 1, 1999, Spectrum adopted the Provisions of Statement of
Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income.  
SFAS 130, which establishes standards for reporting and display of comprehensive
income and its components in the entity's financial statements. The objective of
SFAS 130 is to report a measure of all changes in the equity of an enterprise   
that result from transactions and other economic events of the period.          
Comprehensive income is the total of net income and all other non-owner changes 
in equity. SFAS 130 does not address issues of recognition or measurement for   
comprehensive income and its components and, therefore, had no impact on the    
financial condition or results of Spectrum upon adoption. Spectrum currently has
no transactions that would be classified as elements of comprehensive income not
reported in the Statement of Operations.                                        

     Effective January 1, 1999, Spectrum also adopted the provisions of SFAS No.
131, Disclosures about Segments of an Enterprise and Related Information. This  
Statement requires reporting of financial and descriptive information about     
reportable operating segments. Operating segments are components of an          
enterprise about which separate financial information is available that is      
evaluated regularly by the chief operating decision maker in deciding how to    
allocate resources and in assessing performance. Spectrum believes it operates  
in only one business segment, production and distribution of processed organic  
foods, and has already substantially complied with any additional disclosure    
requirements. SFAS 131 does not address issues of recognition or measurement in 
the basic financial statements, and thus had no impact on Spectrum's financial  
condition or results of operation upon adoption.                                

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BUSINESS OF SPECTRUM

Overview                                                                        

Spectrum is a leading provider of natural and organic edible oils,    
condiments and essential fatty acid or "EFA" supplements. Spectrum has          
introduced innovative natural and organic products and has developed markets for
its products worldwide. Spectrum has introduced chemical-free oils, flavorful   
natural condiments, and nutritionally rich EFA products to the marketplace, and 
has been integral in raising public awareness of the numerous health benefits of
consuming EFAs as well as the differences between "good" and "bad" fats.        
Spectrum has developed the first certified organic olive oil, the first         
expeller-pressed canola oil, the first fresh organic flax oil, the first organic
vinegars, and the first no tropical fat, non-dairy, non-hydrogenated condiment  
spread known as "Spectrum Spread." Spectrum's current lines of business consist 
of culinary oils, vinegars, mayonnaise, dressings and spreads under the         
"Spectrum Naturals" brand, branded food service/commissary sales to natural food
retailers, delis, bakeries, restaurants, and other institutions, and EFA        
nutritional supplement oils under the "Spectrum Essentials" brand.              

Products                                                                        

Culinary Oils and Condiments                                          

Spectrum manufactures and markets a complete line of branded edible   
vegetable oils that are processed and packaged to appeal to the high-end, health
conscious consumer. Spectrum also markets a wide range of co-packed certified   
organic and natural condiments including dressings, mayonnaise, vinegars, and a 
non-hydrogenated butter and margarine substitute known as Spectrum Spread. All  
oils are naturally and mechanically expeller extracted or cold-pressed from     
fruits, nuts, seeds or grain without the use of toxic solvents, chemical        
adjuncts or preservatives. In 1998, branded retail products accounted for       
approximately 77% of Spectrum's total sales. A selection of Spectrum's products,
including Spectrum Spread, Spectrum Naturals brand mayonnaise and vinegars, and 
selected vegetable-oil products are sold in one gallon and five gallon          
containers for commissary and institutional food service sales.                 

Spectrum markets over 20 different refined, unrefined natural and     
third-party certified organic vegetable oils under the Spectrum Naturals brand  
name. Spectrum's culinary oils and condiment products include:                  

 o    almond, avocado, apricot, canola, coconut, sesame, walnut, peanut,
         olive, olive/canola blend, super canola, sunflower, soy and safflower
oils;                                                       

o    four grades of olive oils, including three premium organic extra 
       virgin olive oils (one of which has been awarded a four-star rating
         from Wine & Spirits Magazine), and a commercial premium extra virgin;

    o    organic, flavored spray oils for cooking and seasoning, a spray blend
     of organic extra virgin olive and canola oils, and a super canola
spray for high heat sauteing and coating baking pans;       

   o    Spectrum's World Cuisine line of flavored ethnic oils, which include
 flavors such as Asian, Mediterranean, Southwestern, and Thai;

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   o    canola and "lite canola" (egg-free) mayonnaise products that contain
healthy oils and no sugars or preservatives;                

o    organic vinegars, including filtered and unfiltered apple cider  
       vinegar, brown rice vinegar, balsamic vinegar, red wine vinegar and
white wine vinegar;                                         

o    low-fat salad dressings in flavors such as Zesty Italian, Mango  
        Madness, Creamy Roasted Pepper, Honey Dijon, Southwestern Caesar and
Blue Cheese style;                                          

o    fat-free salad dressings in flavors such as Creamy Dill, Creamy  
Garlic, Sweet Onion and Garlic and Toasted Sesame;          

     o    New Essential dressings, launched in June 1999, which are 100% organic
and contain EFAs as a value-added feature; and              

   o    Spectrum Spread, a non-hydrogenated, non-trans-fatty acid, tasty and
   healthful alternative to butter or margarine, which contains no
  tropical fats, dairy or synthetic saturated fats, and has high
       efficacy, and is sold in flavors such as Only Olive, Mediterranean,
and Essential Omega (the first EFA-based spread).           

     The Spectrum Naturals line has been endorsed by Gary Jenanyan, a well-known
gourmet chef. Spectrum also produces private labeled products for companies such
as Wild Oats Market.                                                            

Nutritional Supplement Oils                                           

Spectrum also markets a cold expeller-pressed brand of oils under its 
Spectrum Essentials brand. The Spectrum Essentials products are produced in an  
environment free of the potentially damaging effects of heat, light, and oxygen 
in order to preserve its nutritional potency. The Spectrum Essentials line      
includes a complete line of liquid and encapsulated EFA products that are rich  
in omega 3 and omega 6 fatty acids. The Spectrum Commodities division uses its  
proprietary SpectraVac technology to preserve the quality and high level of     
nutrients of fragile oils that must be handled at cold pressing temperatures to 
eliminate deterioration. Optimal refrigeration ensures that Spectrum's          
"seed-to-shelf" process delivers products that are nutritionally potent and     
chemically stable, with a consistently appealing flavor.                        

The Spectrum Essentials product line includes:                        

    o    eight varieties of certified organic, EFA-rich products, six of which
are marketed as Veg-Omega3 liquid or capsules;              

   o    organic Essential Max EFA Blend, which includes unrefined flax, soy,
         and borage oils, expeller-pressed unrefined wheat germ, lecithin, and
natural antioxidants such as Vitamin C and rosemary;        

o    organic flax-borage oil and 100% organic borage oil capsules;    

o    hemp oil (which contains no active THC and is therefore legal to 
          produce), a perfectly balanced source of EFAs and rich in chlorophyll,
       phospholipids and sterols. Many nutritionists believe that hemp oil
         promotes cell membrane regeneration and improved immunity. Spectrum's
hemp oil has a nutty flavor and year-long shelf life;       

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     o    unrefined wheat germ oil and fish oil, which have been shown to aid in
          cholesterol control, and contain a high concentration of Vitamin E and
other potent antioxidant agents; and                        

o    evening primrose oil, the world's largest selling EFA supplement,
       which is known to help regulate hormones and vital brain functions.

Industrial Ingredients                                                

     Founded in 1995 to leverage Spectrum's procurement and vertical integration
strength, the Spectrum Commodities division sells organic and natural oils and  
vinegars to other manufacturers as industrial ingredients. The growing list of  
customers includes organic and specialty food companies, health and beauty aid  
manufacturers and nutritional supplement marketers that use EFAs as an          
ingredient.                                                                     

    Spectrum's production facility packs oils in various sizes from one gallon
to 290 gallon totes, as well as the movement of full tankers directly from      
Spectrum's contract producers to ingredients customers. Drums of organic apple  
cider, wine and rice vinegar are packed for industrial sales from Spectrum's    
annual production of these certified organic commodities. An increasing number  
of new customers are evolving from the sale of EFA supplement oils and          
by-products manufactured using Spectrum's SpectraVac technology.                

Markets and Customers                                                           

Spectrum's products are sold in three main market segments within the 
natural foods marketplace:                                                      

o    Natural foods retailers represent Spectrum's oldest market and   
         comprised about 75% of its sales in 1998. While Spectrum products are
sold to stores of all sizes, the larger natural foods remain
Spectrum's key customers.                                   

o    Mainstream food retailers, which include both specialty/gourmet  
   retailers and supermarket chains, and accounted for about 9% of
    Spectrum's total sales in 1998. The product categories that have
    proved most successful in the specialty and grocery segments are
      packaged culinary oils and vinegars. Mainstream grocery stores are
     becoming strong competitors to natural foods supermarkets as they
     stock a wider array of natural foods that appeal to the crossover
  consumer market. During the last three years, the crossover of
      nontraditional consumers of natural food has become a fast-growing
segment.                                                    

o    Spectrum has developed a strong program of sales to retailer deli
        sections along with commissary and institutions, which accounted for
          approximately 10% of total sales in 1998. Bulk products sold include a
      full range of natural oils, some organic cooking oils, spreads and
selected condiments.                                        

Competition                                                                     

     In the specialty culinary oils market, Spectrum's competitors include Hain,
Loriva, Anglia (Oils of the World), Consorzio and other private label brands.   
New entrants to the market are increasing as specialty oil companies respond to 
upward trending in demand. In the nutritional oils market, Spectrum faces       
competition from Omega, Arrowhead, Jarrow, Source Naturals, Flora, Health from  
the Sun, Barleans, and numerous other private label producers. Spectrum faces   
competition in the natural food condiments market from Eden, Canoleo, Nasoya,   
Annie's, and Braggs.                                                            

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 Spectrum also faces competition from makers of mass market cooking oils
such as ConAgra, Inc. through its Wesson brand, CPC International, through its  
Mazola brand, The Proctor & Gamble Company, through its Puritan brand,          
Hollywood, Ventura Foods, through its Saffola brand, and Colavita. These mass   
market products are commodity-based everyday cooking oils and constitute a      
formidable presence on grocery and supermarket shelves, due to their lower      
prices due to volume-driven freight and distribution cost savings, use of lower 
cost raw material and other cost benefits.                                      

Many of Spectrum's competitors are larger than Spectrum and have more 
financial, marketing and management resources, and brand name recognition, than 
it does.                                                                        

Operations                                                                      

     Spectrum operates multiple production and bottling lines that accounted for
55% of gross sales in 1998. Oil bottling is currently only being utilized on a  
one shift basis, and warehousing is at approximately 90% capacity. Spectrum is  
moving towards full capacity utilization on a single shift basis, and has       
already upgraded bottling systems to meet unique packaging and private labeling 
requirements, such as the use of plastic bottles, square bottles and            
pressure-sensitive labels, as well as the packing of sensitive nutritional and  
culinary oils. A dedicated bulk line exists for one gallon container, five      
gallon containers, drums and totes.                                             

 Spectrum currently occupies a 50,000 square-foot facility and leased an
additional 6,000 square feet of office space in June 1999.                      

Marketing Strategy                                                              

The Spectrum Naturals brand continues to be well-positioned as a high 
quality provider of natural and organic vegetable oils and condiments to the    
natural foods marketplace. The Spectrum Essentials brand has also been          
well-positioned as a leading provider of nutritional supplements in the EFA     
category. Spectrum has already achieved a memorable brand image through its     
colorful and inviting packaging, consistency in using superior quality raw      
ingredients, outstanding product literature and information, and excellent      
tasting products. Educational programs are an important component of Spectrum's 
marketing strategy, as it seeks to raise consumer awareness of all its product  
lines, and Spectrum's use of manufacturing practices that have minimal          
environmental impact.                                                           

     Spectrum is aggressively pursuing greater market share through product line
extensions and diversification and further penetration into U.S. and Canadian   
markets. Spectrum intends to enter new market segments as opportunities are     
identified. Spectrum also intends to position its brand to advance more deeply  
into foreign markets such as Japan and Europe.                                  

Trade Names and Trademarks                                                      

   Spectrum has federal registrations for its "Spectrum Naturals," "Spectrum
Essentials," "SpectraVac," "Spectrum Spread, "Veg-Omega3," "Community Foods" and
"World Cuisine" trademarks. There can be no assurance that any trademark,       
service mark or trade name registrations will be granted to the Spectrum, or, if
granted, that the trademarks, service marks or trade names will not be infringed
upon or challenged by others.                                                   

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Government Regulation                                                           

Spectrum is subject to various federal, state and local regulations   
relating to cleanliness, maintenance of food production equipment, food storage 
and food handling, and Spectrum is subject to unannounced on-site inspections of
its manufacturing facilities. As a manufacturer and distributor of foods,       
Spectrum is subject to regulation by the U.S. Food and Drug Administration,     
state food and health boards and local health boards in connection with the     
manufacturing, handling, storage, transportation, labeling and processing of    
food products. In order to offer organic food products, Spectrum is also subject
to inspection and regulation by the U.S. Department of Agriculture. Regulations 
in new markets and future changes in the regulations may adversely impact       
Spectrum by raising the cost to manufacture and deliver Spectrum's products     
and/or by affecting the perceived healthfulness of Spectrum's products. A       
failure to comply with one or more regulatory requirements could interrupt      
Spectrum's operations and result in a variety of sanctions, including fines and 
the withdrawal of Spectrum's products from store shelves. Spectrum holds all    
material licenses and permits required to conduct its operations.               

 Spectrum is also subject to Federal and state laws establishing minimum
wages and regulating overtime and working conditions.                           

Employees                                                                       

As of June 1, 1999, Spectrum had 50 employees, including production,            
warehousing, administrative and senior managers. No Spectrum employees are      
covered by a collective bargaining agreement. Spectrum believes that its        
relation with its employees are good. Additionally, Spectrum uses strategic     
consultants in the following areas: MIS, financial management, engineering,     
research and development, and quality assurance programs.                       

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OFPI MANAGEMENT'S DISCUSSION AND
 ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS

Overview                                                                        

   OFPI was incorporated in 1987 as S&D Foods, Inc., and changed its name to
Garden Valley Naturals in 1995. Doing business as Garden Valley Naturals from   
1987 to 1996, OFPI has manufactured and marketed pesticide-free or "organic" and
"all natural" pasta sauces, salsas and condiments under the brand names "Garden 
Valley Naturals", "Garden Valley Organics," "Millina's Finest" and "Parrot." It 
began marketing its Parrot line of salsas in 1987, its Garden Valley Naturals   
line of condiments in 1991 and its Garden Valley Naturals line of pasta sauces  
and salsas in 1994. In June 1996, Garden Valley Naturals merged with Organic    
Food Products, which also marketed a line of organic food products, including   
pasta sauces, salsas and canned tomatoes, together with dry cut pastas and      
organic children's meals. The surviving merged entity operates under the Organic
Food Products, Inc. name.                                                       

Results of Operations for the Nine Months and the Three Months Ended March 31,  
1999 and 1998                                                                   

     OFPI reported a net loss for the nine and three months ended March 31, 1999
of $3,670,000 and $579,000 respectively, compared to net losses of $723,000 and 
$313,000 for the same periods from the prior year. This loss for the nine months
ended March 31, 1999 is partially attributed to the write-off of the goodwill   
for Sunny Farms of $1.0 million and Global Natural Brand management fees and    
expenses. Higher organic tomato prices from the prior year and increased cost of
goods due to plant inefficiencies resulted in operating losses in the nine and  
three months period of fiscal 1999.                                             

Revenues                                                              

     Revenues decreased $193,000 or 2.3% for the nine months and $38,000 or 1.5%
for the three months ended March 31, 1999, compared to the same periods from the
prior fiscal year. The decrease in the year-to-date and quarterly revenues      
resulted from a reduction in club stores sales and a decrease in overall pasta  
sauce product sales due to competitive pressures within the product category.   
The decrease in pasta sauce sales was partially offset by the sales of juice    
products as a result of the Sunny Farms acquisition in February 1998.           

Cost of Goods Sold                                                    

   OFPI's cost of goods sold increased as a percentage of sales for the nine
and three months ended March 31, 1999, reaching 87.1% and 84.2% respectively,   
compared to 73.8% and 76.8% for the same periods from the prior year. The       
increase in the year-to-date and quarterly expense resulted from organic tomato 
price increases over the previous fiscal periods, manufacturing inefficiencies  
in the production facility and production of low margin juice products in fiscal
1998.                                                                           

Sales and Marketing Expenses                                          

   OFPI's sales and marketing expense decreased as a percentage of sales for
the nine and three months ended March 31, 1999, reaching 25.7% and 25.4%,       
respectively, compared to 27.2% and 25.6% for the same periods from the prior   
year. The decrease in the year-to-date and quarterly expense reflected a        
reduction in fixed selling costs, partially off-set by higher manufacturers'    
charge-backs and other promotional programs. The reduction in fixed selling     
expenses was essentially offset by higher promotional cost in the three month   
period.                                                                         

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General and Administrative Expenses                                   

OFPI's general and administrative expense as a percentage of sales for
the nine months ended March 31, 1999 was 17.3% and 10.4%, respectively, compared
to 9.4% and 12.1% for the same periods from the prior year.  The  percentage and
dollars  increase  in  the  year-to-date   expense  resulted  from  charges  for
management  service fees from Global  Natural  Brands and increases in legal and
accounting services. The quarterly expense percentage and dollars decreased from
the same  period  prior year  reflecting  a  reduction  in  salaries  and wages,
partially offset by increased professional fees.                                

Loss on Write-down of Goodwill                                        

     During December 1998, OFPI determined that goodwill related to the February
1998 purchase of Sunny Farms was impaired, based on estimations of expected     
undiscounted future cash flows under current operating conditions. Discounted   
cash flow estimates under the same operating assumptions indicated they may not 
be sufficient to recover the cost of the goodwill arising from the purchase of  
Sunny Farms and, accordingly, goodwill of $1,020,000 was written off. This      
amount, which includes an estimate of the value of the contingent shares to be  
released to the former owners of Sunny Farms based on certain earnout           
provisions, is included in "loss on writedown of fixed assets and goodwill" in  
the accompanying statements of operations.                                      

Net Interest Expense                                                  

     OFPI's net interest expense increased as a percentage of sales for the nine
and three months ended March 31, 1999, reaching 1.7% and 2.9%, respectively,    
compared to 0.7% and 0.8% for the same periods from the prior year. The increase
in the year-to-date and quarterly expense resulted from increased usage of      
OFPI's line-of-credit facility to fund operating losses and the higher interest 
rate charged by FINOVA Capital versus Wells Fargo Bank.                         

Results of  Operations  for the Year Ended June 30,  1998  Compared  to the Year
Ended June 30, 1997                                                             

Revenues                                                              

    OFPI's revenues for the year ended June 30, 1998 were $12,304,000 compared
to $11,379,000 for the year ended June 30, 1997, an increase of $925,000, or    
8.1% compared to 48.9% increase in 1997. The increase in revenues in fiscal 1998
was primarily due to the acquisition of the natural juice business of Sunny     
Farms Corporation in February of 1998. The fiscal 1997 increase was attributable
to the acquisition of OFP in June 1996.                                         

Cost of Goods Sold                                                    

     OFPI's cost of goods sold for fiscal 1998 was $9,420,000 or 76.6% of sales,
versus $7,530,000, or 66.2% of sales for fiscal 1997. The increase in           
cost-of-goods sold was due to increased manufacturing costs due to excess       
capacity, inventory write-downs, and higher priced raw food ingredients for     
Sunny Farms' products. Moreover, Sunny Farms' products were co-packed           
(manufactured and packaged by an outside processor) from the time of its        
acquisition through the end of fiscal 1998. Accordingly, the resultant gross    
margin was significantly below the margin which could have been attained had all
products been produced by OFPI. Subsequent to year-end, Sunny Farms has been    
fully integrated into the OFPI organization and the anticipated synergies should
be attained given that its products are now being manufactured by OFPI.         

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     Additionally, subsequent to year-end, organizational changes have been made
within the manufacturing and purchasing functions. As a result, management      
believes that OFPI's operations will become more efficient and purchasing costs 
will decrease by the end of fiscal 1999, producing reductions in cost of goods  
sold in subsequent periods.                                                     

Sales and Marketing Expenses                                          

    OFPI's sales and marketing expense for fiscal 1998 as $3,049,000, or 24.8%
of sales, versus $2,409,000 or 21.2% of sales for fiscal 1997. The increase in  
sales and marketing expense was due to increases in personnel and increases in  
promotional activities such as in-store demonstrations, etc.                    

General and Administrative Expenses                                   

     OFPI's general and administrative expenses for fiscal 1998 were $1,922,000,
or 15.6% of sales, versus $1,119,000 or 9.8% of sales for fiscal 1997. This     
change was due, in large part, to increases in professional services, legal     
fees, accounting and tax services and such other costs incidental to OFPI       
becoming a public company. Moreover, notes receivable from shareholder,         
$168,000, separation costs associated with the former Chief Executive Officer,  
$167,000, and $217,000 associated with a failed acquisition were written off.   
Additionally, contributing to this increase were $154,000 in expenses associated
with retaining the Global Natural Brands management team during the fourth      
quarter of fiscal 1998.                                                         

Loss on Write-down of Fixed Assets and Goodwill                       

    During fiscal 1998, OFPI determined that certain goodwill and fixed assets
were impaired, based on estimations of expected undiscounted future cash flows  
from operations under current operating conditions. Discounted cash flow        
estimates under the same operating assumptions indicated that they may not be   
sufficient to recover the cost of the goodwill arising from the purchase of OFP,
and accordingly, goodwill of $2,182,000 was written off. The related fixed      
assets were reduced by $240,000 to its fair value as estimated by appraisal from
an independent third party. The resulting total $2,422,000 loss is included in  
"Loss on write-down of fixed assets and goodwill" in the accompanying statements
of operations. The affected fixed assets will be depreciated at their new book  
basis over their remaining useful life. Unamortized goodwill of $923,000        
relating to the February 1998 Sunny Farms acquisition was not affected as of    
June 30, 1998, but was reevaluated in December 1998.                            

Net Interest Expense                                                  

  OFPI's interest expense for fiscal 1998 was $102,000 versus $261,000 for
fiscal 1997. The decrease in interest expense resulted from a 60% reduction in  
notes payable as well as a decrease in the utilization of the revolving credit  
line due to the application of IPO proceeds to pay down debt. (See Liquidity and
Capital Resources).                                                             

Deferred Tax Assets                                                   

  Since OFPI could not determine that it was more likely then not that the
deferred tax assets would be realized, a 100% valuation allowance was provided. 

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Year 2000 Compliance                                                            

OFPI uses computer software that may be impacted by the "Year 2000"   
problem, and also relies upon vendors of equipment and services whose products  
may be impacted by the Year 2000 problem. OFPI's Year 2000 compliance issues    
include:                                                                        

o    the equipment it uses in its manufacturing process;              

o    the hardware and third-party software it uses for corporate      
administration;                                             

o    the services of third-party providers it purchases for certain   
professional services; and                                  

     o    the external services such as telecommunications and electrical power.

OFPI has initiated a plan that will attempt to identify all computer  
hardware and software, plant equipment and services upon which it relies that   
may be impacted. After identification of any problem areas, OFPI will verify    
whether or not those products or services are Year 2000 compliant. The plan     
includes contacting those vendors or service providers to determine their       
compliance or plans to become compliant before December 31, 1999. It is the     
intent of OFPI to complete this process by December 31, 1999.                   

     OFPI uses various pieces of equipment in its manufacturing process that may
contain computer chips that could be affected by the Year 2000 problem. OFPI has
started, but not completed, a program to identify which pieces of equipment     
could be affected and how the affected equipment could be updated.              

OFPI's corporate administrative and operating systems are exclusively 
PC-based using a commercially available software package. OFPI has received     
written confirmation from the legal department of the software developer        
confirming that it is Year 2000 compliant.                                      

   OFPI uses outside service providers for the processing and administration
of its payroll, 401(k) retirement plan and insurance benefit programs. Although 
a survey of these service providers has not been completed, OFPI believes that  
these providers will have Year 2000-compliant systems.                          

  OFPI has not deferred any information technology projects to date due to
the need to assess or ensure Year 2000 compliance of its systems, and does not  
anticipate that any other information technology projects will be delayed in the
future due to the Year 2000 problem.                                            

   Although the total costs of compliance have not been completely assessed,
management does not believe they will be material in nature. OFPI believes it   
has or will achieve timely Year 2000 compliance in advance of December 31, 1999.
With respect to external companies that provide telecommunications and          
electrical power, OFPI is less certain about the impact of their non-compliance 
regarding the Year 2000 problem. The loss of these services would create a major
disruption of OFPI's normal operations. Given this scenario, OFPI would be      
required to obtain these services from other sources. The cost of switching to  
other utility providers has not been assessed.                                  

  Issues similar to these also face OFPI's customers and vendors. OFPI has
not yet completed an assessment of Year 2000 readiness of its customers and     
vendors. However, based on initial discussions with certain customers and       
vendors, management does not currently believe that business with those         
customers and vendors will be significantly disrupted by the Year 2000 problem. 

Seasonality                                                                     

     Historically, OFPI has experienced little seasonal fluctuation in revenues.
OFPI occasionally contracts for certain product purchases for the entire year at
harvest time, or at planting time, to secure raw materials throughout the year. 
These purchases take place annually from early spring to mid-summer, and are    
effected to reduce the risk of price swings due to demand fluctuations. These   
annual purchases can create overages and shortages in inventory.                

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Liquidity and Capital Resources                                                 

As of March 31, 1999, OFPI's cash position was limited. OFPI has a    
$3,000,000 revolving line of credit and a $500,000 equipment line. The funds    
available to OFPI are based upon discounted accounts receivable and inventory.  
Thus, OFPI has only been able to borrow approximately 44% or $1,319,000 of the  
$3,000,000 revolving line of credit, much of which has been used to repay prior 
debt commitments. The operating losses over the past nine months have           
significantly reduced working capital and availability of funds under OFPI's    
line of credit. Without the infusion of additional capital resources, management
is uncertain OFPI will have sufficient cash to support future business          
operations. To remedy this situation, management implemented a cost reduction   
program, reducing cash expenditures in the most recent quarter, and has explored
various options to generate additional cash.                                    

New Applicable Accounting Pronouncements                                        

Effective July 1, 1998, OFPI adopted the Provisions of Statement of   
Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive Income.  
SFAS 130, which establishes standards for reporting and display of comprehensive
income and its components in the entity's financial statements. The objective of
SFAS 130 is to report a measure of all changes in the equity of an enterprise   
that result from transactions and other economic events of the period.          
Comprehensive income is the total of net income and all other non-owner changes 
in equity. SFAS 130 does not address issues of recognition or measurement for   
comprehensive income and its components and, therefore, had no impact on the    
financial condition or results of OFPI upon adoption. OFPI currently has no     
transactions that would be classified as elements of comprehensive income not   
reported in the Statement of Operations.                                        

   Effective July 1, 1998, OFPI also adopted the provisions of SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information. This       
Statement requires reporting of financial and descriptive information about     
reportable operating segments. Operating segments are components of an          
enterprise about which separate financial information is available that is      
evaluated regularly by the chief operating decision maker in deciding how to    
allocate resources and in assessing performance. OFPI believes it operates in   
only one business segment, production and distribution of processed organic     
foods, and has already substantially complied with any additional disclosure    
requirements. SFAS 131 does not address issues of recognition or measurement in 
the basic financial statements, and thus had no impact on OFPI's financial      
condition or results of operation upon adoption.                                

Related Party Transactions                                                      

During the nine month period ended March 31, 1999, Global billed OFPI 
$380,290. However, certain of these amounts are in dispute and may be offset by 
amounts owed to OFPI by Global. These related party transactions include        
expenses for personal expenses. Global, a shareholder of OFPI, was a management 
group retained by OFPI through October 1998 to oversee daily operations. The    
management services agreement with Global was terminated on October 26, 1998.   

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BUSINESS OF OFPI

Overview                                                                        

   OFPI was incorporated in 1987 as S&D Foods, Inc., and changed its name to
Garden Valley Naturals in 1995. Doing business as Garden Valley Naturals from   
1987 to 1996, OFPI has manufactured and marketed pesticide-free or "organic" and
"all natural" pasta sauces, salsas and condiments under the brand names "Garden 
Valley Naturals", "Garden Valley Organics", "Millina's Finest" and "Parrot." It 
began marketing its Parrot line of salsas in 1987, its Garden Valley Naturals   
line of condiments in 1991 and its Garden Valley Naturals line of pasta sauces  
and salsas in 1984. In June 1996, Garden Valley Naturals merged with Organic    
Foods Products, which also marketed a line of organic food products, including  
pasta sauces, salsas and canned tomatoes, together with dry cut pastas and      
organic children's meals. The surviving merged entity operates under the Organic
Food Products, Inc. name.                                                       

In June 1996, OFPI restructured its Garden Valley Organics, Parrot and
Millina's Finest product lines by eliminating all non-organic products,         
eliminating salsas and ketchup sold under the Millina's Finest brand name, and  
adding pasteurized organic fruit juices to its product offerings. In February   
1998, OFPI acquired product lines from Sunny Farms Corporation of Richmond,     
California, a producer of natural fruit and vegetable juices for the food       
service retail market. Sunny Farms also markets a line of bottled water products
under the Napa Valley Springs Water brand. In April 1998, OFPI introduced a new 
energy drink known as Energy Plus. This drink is positioned to compete with     
energy drinks marketed under the brand names Red Bull and Hansen's. The         
ingredients in Energy Plus are healthy and meant to give the users a "natural"  
lift.                                                                           

OFPI sells its products either directly or through distributors or    
independent commissioned food brokers and specialty food brokers to health food 
and specialty food stores, club stores, including Price/Costco and BJ's, and    
retail chain and independent grocery stores, including Safeway, A&P, Trader     
Joe's, Raley's, Long's and Lucky's.                                             

Strategy                                                                        

OFPI's business strategy is to:                                       

    o    increase revenue by offering additional organic food products through
OFPI's existing distribution network;                       

     o    reduce costs and improve operating efficiencies by using OFPI's excess
manufacturing capacity to increase the volume of products it
manufactures for itself as well as for others;              

  o    expand current geographic and retail store distribution by offering
          OFPI's products in new markets and increasing distribution in existing
markets; and                                                

o    specialize in the marketing of organic food products.            

     OFPI has added new products through its strategic purchase of two brands as
well as the private label juice business from Sunny Farms. New product offerings
open new channels of distribution, expand revenues and improve the utilization  
of manufacturing facilities, expand OFPI's current geographic and retail store  
distribution by offering OFPI's products in new markets and increasing          
distribution in existing markets, and specialize in the marketing of organic    
food products.                                                                  

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Offer additional organic food products. OFPI continues to offer new   
products and develop new flavors and packages for its sauces and salsas in order
to add to its product offerings. OFPI believes that offering additional products
will increase revenues without proportionately increasing costs, due to the     
economies of scale that result from volume product manufacturing efficiencies as
well as better utilization of OFPI's existing distribution channels.            

Increase manufacturing volumes. OFPI believes it can reduce per unit  
manufacturing costs by using its excess manufacturing capacity to increase      
manufacturing volume. OFPI seeks to increase its manufacturing volume by adding 
new products and by manufacturing food products for other food marketers on a   
contract basis.                                                                 

     Expand geographic and retail store distribution. Although OFPI has national
distribution for its products in health food stores, distribution of products   
through club stores and grocery stores is primarily limited to northern         
California and the northeast coast of the United States. OFPI is seeking        
additional distribution channels in order to increase its club store, grocery   
store, and convenience store sales throughout the United States.                

 Specialize in the marketing of organic food products. OFPI believes its
exclusive marketing of organic food products will improve its brand image and   
awareness and generally promote its consumer sales.                             

Products                                                                        

  OFPI introduces and discontinues products on a regular basis, consistent
with customary practices of other firms in the processed food industry. OFPI's  
current product lines are as follows:                                           

Organic Pasta Sauces and Pastas                                       

  OFPI markets 20 organic pasta sauces under the Garden Valley Organic and
Millina's Finest brand names. The pasta sauces are all natural and most are     
fat-free. Varieties include garden vegetable, sun-dried tomato, roasted garlic  
tomato, tomato mushroom, sweet pepper and onions, hot and spicy, smoked garlic  
and zesty basil. OFPI also offers dry organic pastas including spaghetti,       
linguini, fettuccine, angel hair, rotini, penne and bowties.                    

Organic Salsas                                                        

   OFPI markets 16 organic salsas under the Garden Valley Organic brand name
including five varieties of fat-free and vinegar-free salsas (sun-dried tomato, 
roasted garlic tomato, black bean, black bean and corn and chunky organic       
tomato) in three levels of heat, mild, medium and hot. A medium green tomatillo 
salsa is also available. OFPI also markets a line of ten organic salsas under   
the Parrot brand name. Varieties include chunky, black bean, tomatillo, spicy   
gourmet as well as an enchilada sauce.                                          

Natural Juices and Water                                              

   OFPI markets a line of natural fruit and vegetable juices under the Sunny
Farms brand name. In addition, it also distributes a line of bottled water      
products under the Napa Valley Springs Water brand.                             

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Organic Condiments                                                    

  OFPI offers three organic mustards under the Garden Valley Organic brand
name. All three mustards use organic mustard seed for flavoring and are offered 
in yellow, stoneground and dijon. OFPI offers an organic ketchup and an organic 
crushed garlic under the Millina's Finest brand name. All condiments are        
fat-free and sugar-free.                                                        

Children's Meals                                                      

   OFPI offers five canned organic children's meals, composed of pasta rings
in tomato sauce, pasta rings in tomato cheese sauce, letters and numbers in     
tomato sauce, pasta rings and veggie franks, and beans with veggie franks.      

Organic Juices                                                        

     OFPI markets a line of pasteurized organic fruit juices under the "Cinagro"
brand name in 32 oz. and 10 oz. glass jars. Flavors include Carrot/Lemon Lime,  
Apple Carrot Smoothie, Total Tomato, Veggie Array, Hibiscus Super "C", Lemon    
Berry, Tropical Peach, and Very Berry Cranberry.                                

Functional Beverages                                                  

     OFPI markets a functional beverage called Energy Plus, sold in 7.7 oz. cans
in a single flavor.                                                             

Sales and Distribution                                                          

OFPI sells its products either directly or through distributors or    
independent commissioned food brokers and specialty food brokers to health food 
and specialty food stores, club stores, including Price/Costco and BJ's, retail 
chain and independent grocery stores, including Safeway, A&P, Trader Joe's,     
Raley's, Long's and Lucky's, and convenience stores. Currently OFPI's products  
are offered in over 6,000 health food stores, 250 club stores and 2,000 grocery 
stores located in all 50 states and in the Far East, Middle East, Canada, and   
Europe. OFPI currently uses 21 specialty food brokers and 50 food distributors  
to sell to health food and other independent retail stores and 8 food brokers to
sell to club stores and certain grocery store chains. OFPI also sells directly  
to other grocery store chains. In order to increase its distribution and sales, 
OFPI offers special promotional pricing and occasionally may pay "slotting      
fees," which are payments made by food processors and distributors to retail    
stores in order to acquire retail shelf space for their food products.          

     A broker incentive plan has been implemented based on semi-annual quotas to
motivate brokers to increase their sales of OFPI products. OFPI has also entered
into "preferred vendor" arrangements with certain retail store chains to obtain 
closer working relationships and enhanced retail merchandising and promotional  
support. It has also entered into an agreement with California Beverages in San 
Francisco to distribute OFPI's Energy Plus line through some of California      
Beverages' 2,600 San Francisco area accounts, and is working to add other       
distributors to expand coverage in the San Francisco area.                      

  OFPI is focusing on its core natural foods distribution, and is entering
into new distribution arrangements with mass market accounts where profitable.  
Management believes there is an opportunity to enter conventional supermarkets  
as they become more committed to providing a variety of organic and natural food
products.                                                                       

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Marketing and New Product Development                                           

    OFPI's product marketing emphasizes the organic, all natural and generally
fat-free content of its products as a healthful and tasty alternative to similar
traditional food products. Each brand is targeted toward specific consumer      
segments with appropriate products, flavor variants, images and messages. OFPI  
promotes its Millina's Finest and Parrot product lines for sale to natural food 
and health food stores and the specialty or "gourmet" departments of grocery    
stores, while the Garden Valley Naturals line is offered as a lower priced mass 
market product. OFPI also promotes a pricing strategy in which its organic food 
products are offered at prices only slightly higher than their non-organic      
counterparts. United Natural Foods accounted for approximately 26% and          
Price/Costco accounted for approximately 17% of OFPI's revenues for the year    
ended June 30, 1998. In the nine months ended March 31, 1999, United Natural    
Foods accounted for approximately 25% and Price/Costco accounted for            
approximately 10% of OFPI's revenue. A loss of either of these customers would  
have a material adverse effect on OFPI's operations.                            

Manufacturing                                                                   

    OFPI manufactures its products in a 24,000 square-foot food processing and
warehouse facility it leases in Morgan Hill, California. Manufacturing involves 
mixing the product's ingredients in 1,000 gallon kettles and then bottling,     
labeling and casing the product for delivery to the customer. Some products are 
packaged in shrink-wrapped combination packs consisting of two or more separate 
products in one tray. OFPI manufactures all of its products, except its mustard 
condiments, Kids' Meals, Energy Plus and certain beverage sizes and pastas which
are processed and packaged for OFPI by a co-packer. In addition to the Morgan   
Hill facility, OFPI uses public warehouse facilities on the east coast of the   
United States for inventory storage and distribution.                           

While many raw materials are available from a number of sources, OFPI 
currently purchases its organic tomato products from only two suppliers and has 
written agreements covering a majority of its anticipated tomato product        
purchases. Sun Garden Packing Company sourced approximately 20% of OFPI's raw   
material purchases for the year ended June 30, 1998. OFPI believes that other   
suppliers are available who could provide products at similar prices and terms. 
A change in suppliers, however, could cause a delay in manufacturing and a      
possible loss of sales, which could adversely affect operating results.         

Competition                                                                     

     The natural food and health food industries in general and the pasta sauce,
salsa, condiment and fruit juice businesses in particular are highly            
competitive, and there are numerous multinational, regional and local firms that
currently compete, or are capable of competing, with OFPI. In the non-organic   
pasta sauce market, our competitors include The Campbell's Soup Company, through
its Prego brand, Unilever Canada Limited, through its Ragu brand, Borden, Inc., 
through its Classico brand, and Newman's Own. In the non-organic salsa market,  
we face competition from Campbell's Soup's Pace brand, the Old El Paso brand of 
International Home Foods, Inc. and the La Victoria brand of products of         
Authentic Specialty Foods (DESC). Our competitors in the non-organic condiments 
market include H.J. Heinz Company, Reckitt & Colman Inc., which markets French's
mustard, and International Home Foods, which markets Gulden's mustard. Our      
competition in the fruit juice market includes The Coca-Cola Company, through   
its Minute Maid brand, and Del Monte Foods International, Inc. We compete with  
national cut pasta manufacturers such as Borden, through its Ravarino & Freschi 
brand, and New World Pasta Company, which sells pasta under the American Beauty 
and Ronzoni brands.                                                             

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    We also compete with DeBoles, which makes a line of pastas and organic and
natural pasta sauces. In the organic salsa market, our competitors include      
Simply Natural, Small Planet Foods, L.L.C.'s Muir Glen line of products, and    
Enrico. We face competition in the natural food condiment market from Eden,     
Canoleo, Nasoya, Annie's, and Braggs. In the organic or natural fruit juice     
market, we face competition from Odwalla, Inc. and J.M. Smucker Company's       
Knudsen brand of drinks.                                                        

   Competitive factors in the pasta sauce, salsa and related specialty foods
industry include price, quality, brand image and flavor. OFPI positions its     
product lines to be slightly more expensive than their nonorganic food          
counterparts but consistent with prices charged by other organic food marketers.
OFPI believes its products compete favorably against other organic foods with   
respect to quality and flavor.                                                  

Trade Names and Trademarks                                                      

 OFPI has federally registered its "Millina's Finest" and "Parrot Brand"
trademarks, and has applied for federal trademark registration for its "Cinagro"
brand. There can be no assurance that any trademark or trade name registrations 
will be granted to OFPI, or, if granted, that the trademarks or trade names will
not be copied or challenged by others.                                          

Government Regulation                                                           

     OFPI is subject to various federal, state and local regulations relating to
cleanliness, maintenance of food production equipment, food storage and food    
handling, and OFPI is subject to unannounced on-site inspections of its         
manufacturing facilities. As a manufacturer and distributor of foods, OFPI is   
subject to regulation by the U.S. Food and Drug Administration, state food and  
health boards and local health boards in connection with the manufacturing,     
handling, storage, transportation, labeling and processing of food products. In 
order to offer organic food products, OFPI is also subject to inspection and    
regulation by the U.S. Department of Agriculture. Regulations in new markets and
future changes in the regulations may adversely impact OFPI by raising the cost 
to manufacture and deliver OFPI's products and/or by affecting the perceived    
healthfulness of OFPI's products. A failure to comply with one or more          
regulatory requirements could interrupt OFPI's operations and result in a       
variety of sanctions, including fines and the withdrawal of OFPI's products from
store shelves. OFPI holds all material licenses and permits required to conduct 
its operations.                                                                 

   OFPI is also subject to federal and state laws establishing minimum wages
and regulating overtime and working conditions.                                 

Employees                                                                       

     As of June 1, 1999, OFPI had 29 employees including its executive officers,
food production, processing and warehousing employees and administrative        
personnel. OFPI's employees are not covered by a collective bargaining          
agreement, but OFPI considers its employee relations to be satisfactory.        

Property                                                                        

OFPI leases approximately 24,000 square feet for its corporate office,
manufacturing and warehouse facility in Morgan Hill, California from a          
non-affiliate on a seven-year lease expiring April 30, 2003, at a monthly rental
of $6,674 plus rental escalations of 3% per year. OFPI is negotiating with its  
landlord to lease to OFPI an additional 30,000 square feet of space for         
additional warehousing facilities, although no such lease has been executed.    

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Legal Proceedings                                                               

In October 1998, OFPI terminated its management agreement with Global 
Natural  Brands,  Ltd.,  pursuant  to  which  Global  was to  provide  executive
management services to OFPI. Following the termination of the agreement,  Global
and the following employees of Global, James F. Swallow,  David J. O'Gorman,  J.
Bradley Barbeau,  and Ronald  Balsbaugh,  filed a complaint against OFPI and its
board of directors in Santa Clara County Superior Court, Case No. CV777541.  The
complaint  made  claims for damages for breach of the  management  agreement  of
approximately  $306,000,  plus other  unspecified  amounts,  unpaid  wages,  and
injunctive relief to enjoin OFPI from terminating the management agreement.     

 In October 1998, Global's application for a temporary restraining order
against OFPI was denied. In November 1998, OFPI requested mediation of the      
dispute in accordance with the terms of the management agreement. In December   
1998, Global's motion for preliminary injunction was denied. In January 1999,   
Global amended its complaint to include additional causes of action and applied 
for a right to attach order and an order for issuance of a writ of attachment.  
The court denied Global's attachment application on January 13, 1999. In June   
1999, the parties mediated the dispute without success. Global has requested    
binding arbitration under the terms of the management agreement. OFPI intends to
continue to defend itself vigorously with respect to these legal matters.       

See "Where You Can Find More Information" on page 1.                  

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 CHANGE IN ACCOUNTANTS OF OFPI

In June 1998, OFPI elected to terminate its relationship with Semple &
Cooper, LLP as independent auditors of OFPI.                                    

  None of Semple & Cooper's reports on OFPI's financial statements for the
fiscal years ended June 30, 1997 and June 30, 1996 contained an adverse opinion 
or disclaimer of opinion, nor were their opinions qualified or modified as to   
audit scope or accounting principles. During the fiscal years ended June 30,    
1997 and June 30, 1996 and the subsequent interim period through Semple &       
Cooper's termination, there were no disagreements with Semple & Cooper on any   
matter of accounting principles or practices, financial statement disclosure or 
auditing scope or procedure, which, if not resolved to Semple & Cooper's        
satisfaction, would have caused them to make reference to the subject matter of 
the disagreement in connection with their reports, not were there any reportable
events of the type requiring disclosure under Item 304(a)(1)(v) of Regulation   
S-K of the Securities Act.                                                      

  On June 18, 1998, the audit committee of the board of directors approved
the termination of Semple & Cooper and authorized the appointment of BDO        
Seidman, LLP as OFPI's new accountants.                                         

     In July 1998, OFPI appointed BDO Seidman as OFPI's independent auditors for
the fiscal year ended June 30, 1998. During the fiscal year ended June 30, 1998,
OFPI did not consult with BDO Seidman, LLP regarding the application of         
accounting principles or type of audit opinion that might be rendered nor any   
matter that was either the subject of a disagreement, as that term is defined in
Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of
Regulation S-K, or a reportable event of the type requiring disclosure under    
Item 304(a)(1)(v) of Regulation S-K.                                            

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 UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

     The following unaudited pro forma combined statements of operations for the
year ended December 31, 1998 and the three month period ended March 31, 1999,   
and the unaudited pro forma combined balance sheet as of March 31, 1999 have    
been prepared to illustrate the estimated effects of the OI merger and the      
Spectrum merger. The pro forma financial statements do not reflect any          
anticipated costs savings from the mergers, or any synergies that may result,   
and there can be no assurance that any such cost savings or synergies will      
occur.                                                                          

The unaudited pro forma combined statements of operations for the year
ended December 31, 1998 and for the three months ended March 31, 1999, give     
effect to the mergers as if they each had occurred on January 1, 1998. For pro  
forma purposes, the financial statements of OFPI for the fiscal year ended June 
30, 1998 have been restated to reflect a December 31 year end, and have been    
combined with the financial statements of OI and Spectrum for the year ended    
December 31, 1998. The unaudited pro forma combined balance sheet gives effect  
to the mergers as if they had occurred on March 31, 1999.                       

   The information in the historical columns for OI and Spectrum is based on
the historical financial statements elsewhere in this joint proxy               
statement/prospectus. The information in the historical column for OFPI for the 
pro forma balance sheet is based on the historical financial statements         
elsewhere in this joint proxy statement/prospectus. The information in the      
historical columns for OFPI for the pro forma statements of operations is based 
on or derived from historical financial statements not included in this         
prospectus in order to present reporting periods comparable to those of OI and  
Spectrum. The adjustments are described in the accompanying notes and are based 
upon available information and certain assumptions that management believes are 
reasonable.                                                                     

   The pro forma financial statements are not necessarily indicative of what
the combined companies' financial position or results of operations would       
actually have been had the mergers in fact occurred on such dates, or to project
the combined companies' results of operations for any future period. The pro    
forma financial statements should be read in conjunction with the historical    
financial statements (and related notes) and Management's Discussion and        
Analysis of Financial Condition and Results of Operations for each of OI,       
Spectrum and OFPI included elsewhere in this joint proxy statement/prospectus.  

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                                                        [Enlarge/Download Table]


                               UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS                                           
                                        (Three Months Ended March 31, 1999)                                                    

                                                                                                  Pro Forma    Pro Forma       
                                                 OI            OFPI        Spectrum              Adjustments    Combined       
                                                 --            ----        --------              -----------    --------       
                                                        (in thousands, except per share amounts)                               

                                                                                                                               
Revenues .................................    $  1,324       $  2,530       $  6,506   (a)       $    (21)      $ 10,339       
Cost of goods sold .......................       1,130          2,130          4,057   (a)       $    (21)         7,296       
                                              --------       --------       --------             --------       --------       
Gross profit .............................         194            400          2,449                 --            3,043       
Goodwill amortization ....................           7           --             --     (b)            148            155       
Operating expenses .......................         143            906          1,979                 --            3,028       
                                              --------       --------       --------             --------       --------       
Earnings (loss) from .....................          44           (506)           470                 (148)          (140)      
operations                                                                                                                     
Interest and other expense, net ..........         (44)           (73)          (103)                --             (220)      
                                              --------       --------       --------              --------      --------       
Income (loss) before income taxes ........        --             (579)           367                 (148)          (360)      
Income tax (expense) benefit .............        --             --             (131)  (c)            131           --         
                                              --------       --------       --------              --------       --------      
Net income (loss) ........................    $   --         $   (579)      $    236              $    (17)      $   (360)     
                                              ========       ========       ========              ========       ========      
Loss per share, basic                                                                                                          
 and diluted .............................                                                                       $  (0.01)     
                                                                                                                 ========      
Weighted average equivalent                                                                                                    
 shares ..................................                                                                         43,562      
                                                                                                                 ========      

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                               UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS                                           
                                      (Year Ended December 31, 1998)                                                           

                                                                                              Pro Forma       Pro Forma        
                                             OI            OFPI             Spectrum          Adjustments      Combined        
                                             --            ----             --------          -----------      --------        
                                                        (in thousands, except per share amounts)                               

Revenues ................................   $  5,789       $ 12,149       $ 23,951   (a)       $    (89)      $ 41,800         
Cost of goods sold ......................      4,921         10,193         15,483   (a)            (89)        30,508         
                                            --------       --------       --------             --------       --------         
Gross profit ............................        868          1,956          8,468                 --           11,292         
Goodwill amortization ...................       --            3,491           --                    593          4,084         
and writeoff ............................                                            (b)                                       
Operating expenses ......................        655          5,474          7,324                 --           13,453         
                                            --------       --------       --------             --------       --------         
Earnings (loss)                                                                                                                
from operations .........................        213         (7,009)         1,144                 (593)         6,245         
Gain (loss) on ..........................       --             --             (110)                --             (110)        
disposal of assets                                                                                                             
Interest and other ......................       (109)          (170)          (400)                --             (679)        
                                            --------       --------       --------              --------       --------        
expense, net                                                                                                                   
Income (loss) ...........................        104         (7,179)           634                  (593)        (7,034)       
before income taxes                                                                                                            
Income tax (expense) benefit ............        (33)           122           (231)  (c)             142           --          
                                            --------       --------       --------              --------       --------        
Net income (loss) .......................   $     71       $ (7,057)      $    403              $   (451)      $ (7,034)       
                                            ========       ========       ========              ========       ========        
Loss per share, .........................                                                                      $  (0.16)       
                                                                                                               ========        
basic and diluted                                                                                                              
Weighted average ........................                                                                        42,983        
                                                                                                               ========        
Equivalent shares                                                                                                              

Notes to the Unaudited Pro Forma Combined Statements of Operations                                                             

(a)  Pro forma adjustment to eliminate inter-company sales between OI and OFPI.                                                

(b)  Pro forma adjustment to record amortization of goodwill related to the                                                    
     purchase by Spectrum of OI and OFPI, as combined. The increase in goodwill,                                               
     determined as described in notes (a) and (b) to the Unaudited Pro Forma                                                   
     Combined Balance Sheet that follows, will be amortized over 12.5 years.                                                   

(c)  Pro forma adjustment to reflect estimated tax position of the combined                                                    
     entity.                                                                                                                   

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                                UNAUDITED PRO FORMA COMBINED BALANCE SHEET                                                     
                                                 (March 31, 1999)                                                              

                                                                                                         Pro Forma    Pro Forma
                                                                     OI          OFPI     Spectrum      Adjustments   Combined 
                                                                     --          ----     --------      -----------   -------- 
                                                                             (in thousands, except per share amounts)          

Cash ...........................................................   $   --     $   --     $    279        $   --      $    279  
Accounts and other receivables, net ............................        839      1,088      2,283            --         4,210  
Inventories ....................................................      1,686      1,942      2,666            --         6,294  
Other current assets ...........................................         80        174        346 (c)       (117)         483  
                                                                   --------   --------   --------       --------     --------  
Total current assets ...........................................      2,605      3,204      5,574 (c)       (117)      11,266  

Fixed assets, net ..............................................       --        1,208      2,342            --         3,550  
Intangibles and other long-term assets .........................        279       --          474 (a)       2,376       8,169  
                                                                                                  (b)       5,040              
                                                                   --------   --------   --------        --------    --------  
                                                                   $  2,884   $  4,412   $  8,390        $  7,299    $ 22,985  
                                                                   ========   ========   ========        ========    ========  

Accounts payable and accrued                                                                                                   
Expenses .......................................................   $    481   $  2,379   $  2,996        $   --      $  5,856  
Lines of credit ................................................      1,241      1,314      1,092            --         3,647  
Other notes and loans payable, current .........................        536        502        606            --         1,644  
                                                                   --------   --------   --------        --------    --------  
Total current liabilities ......................................      2,258      4,195      4,694            --        11,147  

Long-term debt .................................................        205         10      3,091            --         3,306  
Other long-term liabilities ....................................       --         --          228            --           228  
Shareholders' equity ...........................................        421        207       377 (a)       7,299        8,304  
                                                                                                 (b)                           
                                                                                                 (c)                           
                                                                   --------   --------   --------       --------     --------  
                                                                   $  2,884   $  4,412   $  8,390       $  7,299     $ 22,985  
                                                                   ========   ========   ========       ========     ========  

Notes to the Unaudited Pro Forma Balance Sheet                                  

(a)  Pro forma adjustment to record the effects of the OI merger under the      
  purchase method of accounting. The excess of the $2,798,000 value of the
     shares in the combined company to be held by former shareholders of OI over
    the identified tangible net assets of OI is accounted for as goodwill. For
   this purpose, Spectrum is considered to be the accounting acquirer of OI,
     since former shareholders of Spectrum will hold a majority of the shares of
the combined company.                                                 

     The additional goodwill is calculated as follows:            (in thousands)

Consideration - shares to be issued, valued at                        
average of closing price of OFPI stock for the                        
  three days prior to announcement of the Mergers                $   2,798

Net tangible assets of OI as of March 31, 1999                        
  at estimated fair value                                              159
                                                                 ---------

  Excess of cost over assets acquired                                2,639

Amounts already recorded as goodwill on OI books                      
  related to earlier transaction                                       263
                                                                 ---------

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  Additional goodwill to be recorded                             $   2,376
                                                                 =========

(b)  Pro forma adjustment to record the effects of the Spectrum merger under the
  purchase method of accounting. The excess of the $5,354,000 value of the
  shares in the combined company to be held by former shareholders of OFPI
     over the identified tangible net assets of OI is accounted for as goodwill.
   For this purpose, Spectrum is considered to be the accounting acquirer of
 OFPI, since former shareholders of Spectrum will hold a majority of the
shares of the combined company.                                       

     The additional goodwill is calculated as follows:            (in thousands)

Consideration - shares to be held after Mergers by                    
OFPI shareholders, valued at average of closing price                 
of OFPI stock for the three days prior to                             
  announcement of the Mergers                                    $   5,354

Net tangible assets of OFPI as of March 31, 1999                      
  at estimated fair value                                              314
                                                                 ---------

  Excess of cost over assets acquired                            $   5,040
                                                                 =========

(c)  Pro Forma adjustment to eliminate deferred tax assets of OI and Spectrum,  
     as it cannot be determined whether they will be realized after the mergers.

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 EXPERTS

The financial statements of OI for the year ended December 31, 1998   
included in this joint proxy statement/prospectus have been audited by          
Hutchinson and Bloodgood LLP, independent certified public accountants, to the  
extent and for the periods set forth in their report appearing elsewhere herein,
and are included in reliance upon such report given upon the authority of said  
firm as experts in auditing and accounting.                                     

  The financial statements of Spectrum Naturals, Inc., for the years ended
December 31, 1998 and 1997, included in this joint proxy statement/prospectus   
have been audited by Moss Adams LLP, independent public accountants, as         
indicated in their report with respect thereto, and are included herein in      
reliance upon the authority of said firm as experts in auditing and accounting. 

    The financial statements of OFPI for the year ended June 30, 1998 included
in this joint proxy statement/prospectus have been audited by BDO Seidman, LLP, 
independent certified public accountants, to the extent and for the periods set 
forth in their report appearing elsewhere herein, and are included in reliance  
upon such report given upon the authority of said firm as experts in auditing   
and accounting.                                                                 

    The financial statements of OFPI for the year ended June 30, 1997 included
in this joint proxy statement/prospectus have been audited by Semple & Cooper,  
LLP, independent certified public accountants, to the extent and for the periods
set forth in their report appearing elsewhere herein, and are included in       
reliance upon such report given upon the authority of said firm as experts in   
auditing and accounting.                                                        

 LEGAL MATTERS

  The validity of the OFPI common stock to be issued by OFPI in connection
with the mergers will be passed upon by Carr, McClellan, Ingersoll, Thompson &  
Horn, Professional Corporation, Burlingame, California.                         

    Carr, McClellan will provide an opinion to OFPI as to the qualification of
the Spectrum merger and the OI merger as reorganizations under the Internal     
Revenue Code. Cooley Godward LLP will provide an opinion to Spectrum as to the  
qualification of the Spectrum merger as a reorganization under the Internal     
Revenue Code, and Bosso, Williams, Sachs, Book, Atack & Gallagher, A            
Professional Corporation will provide OI an opinion as to the qualification of  
the OI merger as a reorganization under the Internal Revenue Code.              

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 INDEX TO FINANCIAL STATEMENTS

Organic Ingredients, Inc.                                                       
                                                                        Page
                                                                        ----

       Independent Auditors' Report....................................  F-2
       Balance Sheets..................................................  F-3
       Statements of Income and Retained Earnings......................  F-5
       Statements of Cash Flows........................................  F-6
       Notes to Financial Statements...................................  F-8

Spectrum Naturals, Inc.                                                         

        Independent Auditors' Report....................................  F-13
        Balance Sheets..................................................  F-14
        Statements of Income............................................  F-16
        Statements of Stockholder's Equity..............................  F-17
        Statements of Cash Flow.........................................  F-18
        Notes to Financial Statements...................................  F-20

Organic Food Products, Inc.                                                     

        Report of Independent Certified Public Accountants .............  F-32
        Report of Independent Certified Public Accountants .............  F-33
        Balance Sheets..................................................  F-34
        Statements of Operations........................................  F-36
        Statements of Shareholders' Equity..............................  F-37
        Statements of Cash Flow.........................................  F-38
        Summary of Accounting Policies..................................  F-40
        Notes to Financial Statements...................................  F-44

107.

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Independent Auditors' Report
----------------------------

To the Board of Directors                                                       
Organic Ingredients, Inc.                                                       
Aptos, California                                                               

We have audited the accompanying balance sheet of Organic  Ingredients,  Inc. as
of December 31, 1998, and the related statements of income and retained earnings
and cash  flows for the year then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.                       

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.          

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Organic Ingredients, Inc. as of
December 31, 1998,  and the results of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.    

April 29, 1999                                                                  

F-2 

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                                                                   Organic Ingredients, Inc. 

                                                                              Balance Sheets 
-------------------------------------------------------------------------------------------- 

                                                                      March 31,  December 31,
                                                                        1999        1998     
                                                                        ----        ----     
Assets                                                               (Unaudited)             
CURRENT ASSETS                                                                               
                                                                                             
     Cash                                                            $     --     $   21,200 
     Accounts receivable, trade                                         679,380      277,384 
     Other receivables                                                    2,720       11,015 
     Advances to suppliers                                              157,310      235,147 
     Inventories (Notes 1 and 7)                                      1,686,287    1,916,279 
     Prepaid expenses                                                    36,246       33,479 
     Deferred tax benefit (Note 5)                                       42,575       42,575 
                                                                     ----------   ---------- 

                  Total current assets                                2,604,518    2,537,079 
                                                                     ----------   ---------- 

PROPERTY AND EQUIPMENT, at cost                                                              

     Office equipment                                                    25,387       25,387 
     Less accumulated depreciation                                       25,387       25,387 
                                                                     ----------   ---------- 

                                                                           --           --   
                                                                     ----------   ---------- 

OTHER ASSETS                                                                                 

     Goodwill, net of accumulated amortization of $30,000 (Note 1)      262,500      270,000 
     Deposits                                                            10,525       10,901 
     Loan fees, net of accumulated amortization of $3,100                 6,200        9,300 
                                                                     ----------   ---------- 

                                                                        279,225      290,201 
                                                                     ----------   ---------- 

                                                                     $2,883,743   $2,827,280 
                                                                     ==========   ========== 

The notes to the financial statements are an integral part of this statement.                

                                       F-3                                                   

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                                                              Organic Ingredients, Inc.      

                                                                         Balance Sheets      
---------------------------------------------------------------------------------------      

                                                                March 31,    December 31,    
                                                                   1999         1998         
                                                                   ----         ----         
Liabilities and Shareholders' Equity                           (Unaudited)                   
CURRENT LIABILITIES                                                                          

     Current portion of long-term debt, related (Note 3)        $   85,648   $   85,648      
     Line of credit (Note 2)                                     1,240,814    1,088,894      
     Notes payable, officers, demand                               450,000      450,000      
     Accounts payable and accrued expenses                         478,915      473,108      
     Accrued interest, related                                        --         39,438      
     Deposits                                                        1,961       29,385      
                                                                ----------   ----------      

                  Total current liabilities                      2,257,338    2,166,473      
                                                                ----------   ----------      

 LONG-TERM DEBT                                                                              

      Long-term debt, related, less current portion (Note 3)       205,444      240,117      
                                                                ----------   ----------      

STOCKHOLDERS' EQUITY                                                                         

      Capital stock, no par value, 100,000 shares authorized,                                
           100,000 shares issued and outstanding                   350,000      350,000      
      Retained earnings                                             70,961       70,690      
                                                                ----------   ----------      

                                                                   420,961      420,690      
                                                                ----------   ----------      

                                                                $2,883,743   $2,827,280      
                                                                ==========   ==========      

                                       F-4                                                   


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                                                                     Organic Ingredients, Inc. 

                                                    Statements of Income and Retained Earnings 
---------------------------------------------------------------------------------------------- 

                                                     Three Months   Three Months       Year    
                                                        Ended          Ended          Ended    
                                                       March 31,      March 31,    December 31,
                                                         1999           1998           1998    
                                                         ----           ----           ----    
                                                     (Unaudited)    (Unaudited)     (Audited)  

                                                                                               
Sales                                                $ 1,323,870    $ 1,963,912    $ 5,788,866 

Cost of goods sold                                     1,129,659      1,664,333      4,921,057 
                                                     -----------    -----------    ----------- 
     Gross profit                                        194,211        299,579        867,809 
General and administrative expense                       150,120        149,008        654,800 
                                                     -----------    -----------    ----------- 
     Operating income                                     44,091        150,571        213,009 
                                                     -----------    -----------    ----------- 
Other income (expense)                                                                         
     Interest income                                       2,467           --           20,520 
     Other income                                           --              684          8,287 
     Interest expense                                    (46,287)       (30,393)      (137,992)
                                                     -----------    -----------    ----------- 
          Total other income (expense)                   (43,820)       (29,709)      (109,185)
                                                     -----------    -----------    ----------- 
          Income before provision for income taxes           271        120,862        103,824 
Provision for income taxes (Note 5)                         --           33,134         33,134 
                                                     -----------    -----------    ----------- 
          Net income                                         271         87,728         70,690 
Retained earnings, beginning                              70,690           --             --   
                                                     -----------    -----------    ----------- 
Retained earnings, ending                            $    70,961    $    87,728    $    70,690 
                                                     ===========    ===========    =========== 

The notes to the financial statements are an integral part of this statement.                  

                                       F-5                                                     


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                                                                      Organic Ingredients, Inc. 

                                                                       Statements of Cash Flows 
----------------------------------------------------------------------------------------------- 

                                                     Three Months   Three Months       Years    
                                                         Ended          Ended          Ended    
                                                       March 31,      March 31,     December 31,
                                                          1999          1998            1998    
                                                          ----          ----            ----    
                                                      (Unaudited)    (Unaudited)                

CASH FLOWS FROM OPERATING ACTIVITIES                                                            
                                                                                                
     Cash received from customers                     $   930,169    $ 1,755,897    $ 6,115,545 
     Cash paid to suppliers and employees                (985,109)    (1,859,600)    (6,396,692)
     Interest paid                                        (85,725)       (29,694)      (113,935)
     Interest received                                      2,467           --           20,520 
     Income tax paid                                         (249)          --         (108,688)
                                                      -----------    -----------    ----------- 
          Net cash used by operating activities          (138,447)      (133,397)      (483,250)
                                                      -----------    -----------    ----------- 
CASH FLOWS FROM INVESTING ACTIVITIES                                                            
     Cash paid to acquire equipment                          --             --           (6,438)
                                                      -----------    -----------    ----------- 
CASH FLOWS FROM FINANCING ACTIVITIES                                                            
     Proceeds from line of credit                         151,920        241,631        354,319 
     Loan fees paid                                          --             --          (12,400)
     Advances from officer                                (34,673)      (108,234)       168,969 
                                                      -----------    -----------    ----------- 
          Net cash provided by financing activities       117,247        133,397        510,888 
                                                      -----------    -----------    ----------- 
          Net increase in cash and cash equivalents       (21,200)          --           21,200 
CASH AND CASH EQUIVALENTS, BEGINNING                       21,200           --             --   
                                                      -----------    -----------    ----------- 
CASH AND CASH EQUIVALENTS, ENDING                     $      --      $      --      $    21,200 
                                                      ===========    ===========    =========== 

The notes to the financial statements are an integral part of this statement.                   

                                       F-6                                                      


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                                                                            Organic Ingredients, Inc.

                                                                             Statements of Cash Flows
-----------------------------------------------------------------------------------------------------

                                            Three Months Ended  Three Months Ended     Years Ended   
                                               March 31, 1999     March 31, 1998    December 31, 1998
                                               --------------     --------------    -----------------
                                                 (Unaudited)        (Unaudited)                      

RECONCILIATION OF NET INCOME TO NET                                                                  
CASH FLOWS USED BY OPERATING ACTIVITIES                                                              

                                                                                                     
Net Income                                        $     271          $  87,728         $  70,690     

Adjustments to reconcile net income to net                                                           
cash used by operating activities:                                                                   
     Depreciation                                      --                6,438                       
     Amortization                                    10,600              7,500            33,100     
     (Increase) decrease in:                                                                         
          Accounts receivable, trade               (401,995)          (211,898)          329,410     
          Other receivables                             550              3,200           (92,962)    
          Deposits                                   85,957             (3,095)         (159,406)    
          Inventory                                 229,992                601           (93,413)    
          Prepaid income taxes                         --              150,032           (32,979)    
          Prepaid expenses                           (2,767)            (1,267)            1,000     
          Deferred income taxes                        --                 --             (42,575)    
     Increase (decrease) in:                                                                         
          Accounts payable                         (115,021)           132,289          (216,106)    
          Bank overdraft                            120,828             38,287           (51,459)    
          Payroll taxes payable                        --               (1,944)             (526)    
          Accrued payroll                              --              (24,960)           22,688     
          Customer deposits                         (27,424)          (310,569)         (281,207)    
          Interest payable                          (39,438)               699            24,057     
                                                  ---------          ---------         ---------     

     Net cash used by operating activities        $(138,447)         $(133,397)        $(483,250)    
                                                  =========          =========         =========     

The notes to the financial statements are an integral part of this statement.                        

                                       F-7                                                           

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 ORGANIC INGREDIENTS, INC.

 NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1998

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                              

Nature of Business                                                    

     Organic  Ingredients,  Inc.,  was  incorporated  on December 17, 1997.  The
     Company operated as a limited  liability  company from July, 1996 until the
     date of incorporation. The Company is based in Aptos, California, and sells
  wholesale organic products to both national and international customers.

Accounting Policies                                                   

     The  accounting  policies  relative to the carrying  values of property and
     equipment, goodwill, and loan fees are indicated in captions on the balance
sheet. Other significant accounting policies are:                     

Use of Estimates                                            

          Management  uses  estimates  and  assumptions  in preparing  financial
          statements.  Those  estimates  and  assumptions  affect  the  reported
          amounts of assets and liabilities, the disclosure of contingent assets
and liabilities, and the reported revenues and expenses.    

Cash Equivalents                                            

          For purposes of the statement of cash flows, cash equivalents  include
          time  deposits,  certificates  of deposit,  and all highly liquid debt
 instruments with original maturities of three months or less.

Accounts Receivable, Trade                                  

          Trade  receivables  are stated at face  amount with no  allowance  for
       uncollectible accounts, which management believes to be immaterial.

Interim Financial Statements                                

          The accompanying  unaudited financial  statements for the three months
          ended March 31, 1999 and 1998 have been prepared on substantially  the
          same  basis  as the  audited  financial  statements  and  include  all
          adjustments, consisting only of normal recurring adjustments necessary
          for a fair presentation of the financial set forth therein.  Operating
          results for the three months ended March 31, 1999, are not necessarily
          indicative  of the results  that may be  expected  for the entire year
ending December 31, 1998                                    

 F-8

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 ORGANIC INGREDIENTS, INC.

 NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1998

Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)                  

Inventories                                                           

     Inventories are stated at the lower of cost (first-in, first-out method) or
market.                                                               

Finished goods         $  517,613 
Manufacturered goods    1,030,762 
Citrus                    367,904 
                      ----------

    Total             $1,916,279
                      ==========

Depreciation                                                          

     The modified  accelerated cost recovery system of depreciation is used over
the estimated useful lives of the depreciable assets:                 

Software                        3 years       
Office equipment            5 -10 years       

Goodwill                                                              

     Goodwill was created when the Company was formed.  It is being amortized on
     a  straight-line  basis over a 10 year period.  For federal and  California
income tax purposes, it has no basis and therefore is not amortizable.

Note 2. BANK LINE OF CREDIT                                                     

     The Company has a borrowing  agreement  with Wells Fargo Bank which expires
     October 10, 1999.  The agreement has an  established  limit of  $2,000,000,
     secured  by  the  Company's  accounts  receivable,   inventory,  equipment,
     instruments,  general intangibles and contract rights. The rate of interest
     is 1.0% above the prime rate.  The  effective  rate of interest at December
31, 1998, was 8.75%.                                                  

F-9 

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 ORGANIC INGREDIENTS, INC.

 NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1998

Note 3. LONG-TERM DEBT                                                          

     Long-term  debt and the related  current  portion as of December  31, 1998,
consist of the following:                                             

Officers               $325,765 
Less current portion     85,648 
                      --------

                      $240,117
                      ========

     The long-term notes due to officers are payable in monthly  installments of
     $20,000,  including  accrued  interest and current interest at 10%, through
     June 30, 1999. The remaining balance is then amortized over five years. The
notes are unsecured. Final payment is due June, 2004.                 

     Aggregate maturities or payments required on principal under long-term debt
for each of the succeeding years ending December 31 are as follows:   

1999                       $  85,648        
2000                          44,470        
2001                          49,128        
2002                          54,272        
2003                          59,954        
Thereafter                    32,293        
                   ---------

                   $ 325,765
                   =========

Note 4. COMMITMENT, OPERATING LEASES                                            

     The  Company  leases an office  building  under an  operating  lease  which
     expires  September 30, 1999. The Company has exercised its option to extend
     the lease through September 30, 2000, with the monthly rent of $2,677 to be
increased as determined by the change in the Consumer Price Index.    

     The Company  leases two  vehicles  under  operating  leases which expire in
various years through 2001.                                           

F-10

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 ORGANIC INGREDIENTS, INC.

 NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1998

Note 4. COMMITMENT, OPERATING LEASES (Continued)                                

     The  following  is a  schedule  of  future  minimum  lease  payments  under
     operating  leases having  remaining terms in excess of one year for each of
the succeeding years ending December 31:                              

1999                          $ 42,144  
2000                            30,763  
2001                             2,500  
                            --------

                            $ 75,407
                            ========

Note 5. PROVISION FOR INCOME TAXES                                              

     The  provision  for income taxes  consists of the following at December 31,
1998:                                                                 

Statutory tax liability:                    
   Federal                      $ 56,038
   California                     19,671
                                --------
        Current tax provision     75,709
                                --------
Adjustments for:                            
    Inventory reserve             (42,082)
    Depreciation differences         (493)
                                --------
Deferred tax provision            (42,575)
                                --------

Provision for income taxes        $ 33,134  
                                ========

F-11

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 ORGANIC INGREDIENTS, INC.

 NOTES TO FINANCIAL STATEMENTS
Year Ended December 31, 1998

Note 6. ECONOMIC DEPENDENCY                                                     

Major Customers                                                       

     The Company sells approximately 23% of its product to one customer.  During
     the  year  ended  December  31,  1998,  sales to that  customer  aggregated
     $1,303,058.  At  December  31,  1998,  the  amount  due from that  customer
included in trade accounts receivable was $20,912.                    

Major Suppliers                                                       

     During  the  year  ended   December   31,  1998,   the  Company   purchased
     approximately 47% of its product from two suppliers.  At December 31, 1998,
     amounts  due to  those  suppliers  included  in  accounts  payable  totaled
$35,843.                                                              

Sales and Marketing                                                   

     The  Company is  dependent  upon its food  broker  for sales and  marketing
     capabilities and its  relationships in the organic food industries.  If the
     food  broker  is  unable  to  successfully  market  and sell the  Company's
     products,  or if the  relationship  is terminated  for any reason,  Organic
Ingredients, Inc. may be unable to find a substitute partner.         

Note 7. INVENTORY WRITE DOWN                                                    

     During  1998,  the market  value for certain  manufactured  products in the
     Company's inventory declined below cost. Accordingly, at December 31, 1998,
     inventories of apple juice concentrate, apricot puree, nectarine puree, and
     peach puree have been written down to their estimated net realizable value,
     and  results  of  operations  for 1998  include a  corresponding  charge of
$77,949.                                                              

Note 8. SUBSEQUENT EVENTS                                                       

     The Company has entered  into  negotiations  with three other  corporations
     regarding the possible acquisition of Organic Ingredients, Inc., for stock.
     The target  date is June 30,  1999.  There are no signed  agreements  as of
April 29, 1999.                                                       

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INDEPENDENT AUDITOR'S REPORT                                                    

To the Board of Directors                                                       
Spectrum Naturals, Inc.                                                         

On May 14, 1999, the Company  entered into a definitive  agreement to merge with
Organic Food Products,  Inc. (OFPI) in a stock exchange to be accounted for as a
reverse acquisition. As part of that transaction,  Spectrum Naturals, Inc. (SNI)
and Spectrum Commodities,  Inc. (SCI) would merge prior to the effective date of
the merger with OFPI.  Since SNI and SCI are related  entities,  their merger is
accounted  for on the  same  basis  as a  pooling.  Therefore,  these  financial
statements  are  prepared as if the SNI and SCI merger has been  effected.  Upon
completion of the Agreement and Plan of Reorganization between SNI and OFPI, our
opinion will read as follows:                                                   

We have audited the accompanying  balance sheets of Spectrum Naturals,  Inc., as
of  December  31,  1998  and  1997,  and  the  related   statements  of  income,
stockholders'  equity and cash flows for the years then ended.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.                                                                     

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.               

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Spectrum Naturals,  Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years  then  ended in  conformity  with  generally  accepted  accounting
principles.                                                                     

Santa Rosa, California June 18, 1999 (except for Notes 7 and 12, as to which the
date is July 2, 1999)                                                           

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                                                                                               SPECTRUM NATURALS, INC.              
                                                                                                       BALANCE SHEETS               

=====================================================================================================================               

                                                      ASSETS                                                                        

                                                             March 31,                            December 31,                      
                                                  -----------------------------         -----------------------------               
                                                     1999              1998                1998               1997                  
                                                  ----------        -----------         ----------         ----------               
CURRENT ASSETS                                   (unaudited)        (unaudited)                                                     
                                                                                                                                    
     Cash                                         $  278,600         $  121,400         $      500         $  154,400               
     Receivables                                   2,282,500          1,562,300          1,712,400          1,709,900               
     Note receivable-stockholder                        --               34,800               --               34,500               
     Inventories                                   2,666,300          2,455,800          2,772,200          2,497,500               
     Prepaid expenses                                273,000            292,000            148,300            254,100               
     Deferred income taxes                            73,100             60,400             73,100             60,400               
                                                  ----------         ----------         ----------         ----------               

             Total current assets                  5,573,500          4,526,700          4,706,500          4,710,800               
                                                  ----------         ----------         ----------         ----------               

PROPERTY AND EQUIPMENT                             2,341,700          1,854,200          2,076,900          1,813,000               
                                                  ----------         ----------         ----------         ----------               

OTHER ASSETS                                                                                                                        
     Trademarks and label development                369,600            376,000            352,600            391,200               
     Other intangible assets                           3,500             22,800              7,700             27,000               
     Cash surrender value of life                                                                                                   
         insurance                                    76,500               --               67,600               --                 
     Other                                            25,000             15,000             15,000             15,000               
                                                  ----------         ----------         ----------         ----------               

                                                     474,600            413,800            442,900            433,200               
                                                  ----------         ----------         ----------         ----------               

             Total assets                         $8,389,800         $6,794,700         $7,226,300         $6,957,000               
                                                  ==========         ==========         ==========         ==========               

The accompanying notes are an integral part of these financial statements.                                                          
=====================================================================================================================               

                                                          F-14                                                                      

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                                                                                                SPECTRUM NATURALS, INC.             
                                                                                             BALANCE SHEETS (Continued)             

=======================================================================================================================             

                                   LIABILITIES AND STOCKHOLDERS' EQUITY                                                             

                                                             March 31,                            December 31,                      
                                                   ------------------------------        ------------------------------             
                                                       1999              1998               1998               1997                 
                                                   -----------        -----------        -----------        -----------             
                                                   (unaudited)        (unaudited)                                                   
Checks written in excess of funds                                                                                                   
     deposited                                     $   112,300        $      --          $   186,400        $    97,000             
Lines of credit                                      1,092,000          2,083,000          1,417,500          2,021,000             
Accounts payable                                     2,406,200          1,609,300          1,701,300          1,764,500             
Accrued wages, bonuses, and                                                                                                         
     payroll taxes                                     248,900            169,000            308,700            175,700             
Accrued liabilities and other payables                  98,200             39,700             59,200             50,300             
Income taxes payable                                   130,500             76,900             19,000            103,100             
Current maturities of long-term debt                   573,300            202,800            512,700            219,400             
Current maturities of  obligations under                                                                                            
     capital lease                                      32,500             36,400             35,300             28,800             
                                                   -----------        -----------        -----------        -----------             

         Total current liabilities                   4,693,900          4,217,100          4,240,100          4,459,800             
                                                   -----------        -----------        -----------        -----------             

Long-term debt, less current maturities              3,026,700          2,348,600          2,531,700          2,393,000             
Obligations under capital lease,                                                                                                    
     less current maturities                            64,100             96,500             70,800             78,900             
Deferred income taxes                                  168,000            165,000            168,000            165,000             
Other                                                   60,000               --               75,000               --               
                                                   -----------        -----------        -----------        -----------             

                                                     3,318,800          2,610,100          2,845,500          2,636,900             
                                                   -----------        -----------        -----------        -----------             

Common stock, no par value; 100,000                                                                                                 
     shares authorized, 6,925 shares                                                                                                
     issued and outstanding                             95,500             95,500             95,500             95,500             
Notes receivable from stock sales                         --              (10,000)              --              (10,000)            
Retained earnings (accumulated deficit)                281,600           (118,000)            45,200           (225,200)            
                                                   -----------        -----------        -----------        -----------             

                                                       377,100            (32,500)           140,700           (139,700)            
                                                   -----------        -----------        -----------        -----------             

     Total liabilities and                                                                                                          
         stockholders' equity                      $ 8,389,800        $ 6,794,700        $ 7,226,300        $ 6,957,000             
                                                   ===========        ===========        ===========        ===========             

The accompanying notes are an integral part of these financial statements.                                                          
=======================================================================================================================             

                                                          F-15                                                                      

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                                                                                                   SPECTRUM NATURALS,INC.           
                                                                                                     STATEMENTS OF INCOME           

=========================================================================================================================           

                                                   Three months ended March 31,             Years ended December 31,                
                                                 --------------------------------        --------------------------------           
                                                    1999                 1998                1998               1997                
                                                 ------------        ------------        ------------        ------------           
                                                 (unaudited)         (unaudited)                                                    
GROSS SALES                                      $  6,506,300        $  5,777,800        $ 23,951,000        $ 20,392,400           

COST OF GOODS SOLD                                  4,057,500           3,736,100          15,483,300          13,267,400           
                                                 ------------        ------------        ------------        ------------           

GROSS PROFIT                                        2,448,800           2,041,700           8,467,700           7,125,000           

DISCOUNTS AND PROMOTIONS                              449,200             530,000           1,967,500           1,454,800           

OPERATING EXPENSES                                  1,530,100           1,175,900           5,356,500           4,470,900           
                                                 ------------        ------------        ------------        ------------           

INCOME FROM OPERATIONS                                469,500             335,800           1,143,700           1,199,300           
                                                 ------------        ------------        ------------        ------------           

OTHER INCOME (EXPENSE)                                                                                                              
     Interest income                                     --                  --                 3,600               1,500           
     Interest expense                                (111,600)           (130,600)           (474,800)           (396,800)          
     Miscellaneous                                      9,000                 100              71,400              (2,400)          
     Gain (loss) on disposal of assets                   --               (21,200)           (110,000)              6,700           
                                                 ------------        ------------        ------------        ------------           

                                                     (102,600)           (151,700)           (509,800)           (391,000)          
                                                 ------------        ------------        ------------        ------------           

INCOME BEFORE INCOME TAXES                            366,900             184,100             633,900             808,300           

PROVISION FOR INCOME TAXES                            130,500              76,900             230,700             337,400           
                                                 ------------        ------------        ------------        ------------           

NET INCOME                                       $    236,400        $    107,200        $    403,200        $    470,900           
                                                 ============        ============        ============        ============           

The accompanying notes are an integral part of these financial statements.                                                          
=========================================================================================================================           

                                                            F-16                                                                    

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                                                                                                        SPECTRUM NATURALS, INC.     
                                                                                             STATEMENTS OF STOCKHOLDERS' EQUITY     

===============================================================================================================================     

                                                                          Notes                      Retained                       
                                                                        Receivable     Additional     Earnings                      
                                                                           From         Paid-in     (Accumulated                    
                                              Shares       Amount       Stock Sales     Capital         Deficit)       Total        
                                              ------    -----------    ------------   -----------    -----------    -----------     

Balance, December 31, 1996                    10,000    $    10,000    $      --      $   130,000    $   897,700    $ 1,037,700     

Stock redemption                              (5,000)        (5,000)          --         (130,000)    (1,593,800)    (1,728,800)    

Assets contributed for common stock            1,750         80,500           --             --             --           80,500     

Sale of stock for notes receivable               175         10,000        (10,000)          --             --             --       

Net income                                      --             --             --             --          470,900        470,900     
                                          ----------    -----------    -----------    -----------    -----------    -----------     

Balance, December 31, 1997                     6,925         95,500        (10,000)          --         (225,200)      (139,700)    

Stock redemption                                --             --             --             --         (132,800)      (132,800)    

Payment on notes receivable                     --             --           10,000           --             --           10,000     

Net income                                      --             --             --             --          403,200        403,200     
                                          ----------    -----------    -----------    -----------    -----------    -----------     

Balance, December 31, 1998                     6,925         95,500           --             --           45,200        140,700     

Net income for the three months                                                                                                     
    ended March 31, 1999 (unaudited)            --             --             --             --          236,400        236,400     
                                          ----------    -----------    -----------    -----------    -----------    -----------     

Balance, March 31, 1999 (unaudited)            6,925    $    95,500    $      --      $      --      $   281,600    $   377,100     
                                          ==========    ===========    ===========    ===========    ===========    ===========     

The accompanying notes are an integral part of these financial statements                                                           

===============================================================================================================================     

                                                                        F-17                                                        

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                                                                                                       SPECTRUM NATURALS, INC.      
                                                                                                      STATEMENTS OF CASH FLOWS      

==============================================================================================================================      

                                                                               Three months ended            Years ended            
                                                                                    March 31,                December 31,           
                                                                             -----------------------    ----------------------      
                                                                                 1999        1998         1998         1997         
                                                                              ---------    ---------    ---------    ---------      
CASH FLOWS FROM OPERATING ACTIVITIES (unaudited) (unaudited)                                                                        
     Net income                                                               $ 236,400    $ 107,200    $ 403,200    $ 470,900      
     Adjustments to reconcile net income to net                                                                                     
         cash provided (used) by operating activities:                                                                              
             Depreciation and amortization                                       78,100       84,500      348,700      316,800      
             (Gain) loss on disposal of assets                                     --         21,200      110,000       (6,700)     
             Deferred income taxes                                                 --           --         (9,700)      18,600      
             Imputed interest on non-interest bearing                                                                               
                 notes payable                                                    7,000        3,200       19,200        5,700      
             Allowances for doubtful accounts and chargebacks                    36,800      438,800      (26,800)      32,900      
         Changes in:                                                                                                                
             Receivables                                                       (606,900)    (291,200)      24,300     (440,400)     
             Inventories                                                        105,900       41,700     (274,700)    (608,000)     
             Prepaid expenses                                                  (124,700)     (37,900)     105,800      (82,400)     
             Other assets                                                       (10,000)        --           --          7,400      
             Accounts payable                                                   704,900     (155,200)     (63,200)     204,200      
             Accrued wages, bonuses, and payroll taxes                          (59,800)      (6,700)     133,000       32,000      
             Accrued liabilities and other payables                              38,900      (10,600)       8,900       28,300      
             Income taxes payable                                               111,500      (26,200)     (84,100)     (28,100)     
             Other                                                              (15,000)        --         75,000         --        
                                                                              ---------    ---------    ---------    ---------      
Net cash provided (used) by operating activities                                503,100      168,800      769,600      (48,800)     
                                                                              ---------    ---------    ---------    ---------      

CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                
     Purchases of property and equipment                                       (324,300)     (82,800)    (595,300)    (557,100)     
     Trademark and label development                                            (31,300)     (12,200)     (38,400)     (93,900)     
     Increase in cash surrender value of life insurance                          (8,900)        --        (67,600)        --        
     Loan to stockholder                                                           --           (300)        --        (62,800)     
     Repayments on note receivable- stockholder                                    --           --         34,500       28,300      
     Proceeds from sale of assets                                                  --            800        2,200       21,200      
                                                                              ---------    ---------    ---------    ---------      
Net cash used by investing activities                                          (364,500)     (94,500)    (664,600)    (664,300)     
                                                                              ---------    ---------    ---------    ---------      

CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                
     Net borrowings (repayments) under line of credit                          (325,500)      62,000     (603,500)     685,000      
     Principal repayments on long-term debt                                     (72,700)     (61,000)    (220,000)    (286,200)     
     Checks written in excess of funds deposited                                (74,100)     (97,000)      89,400       97,000      
     Proceeds from note receivable from stock sale                                 --           --         10,000         --        
     Principal payments on obligations under capital lease                       (9,500)     (11,300)     (34,800)     (97,600)     
     Proceeds from sale of common stock                                            --           --           --         49,600      
     Proceeds from long-term debt                                               621,300         --        500,000      146,000      
                                                                              ---------    ---------    ---------    ---------      

                 Net cash provided (used) by financing activities               139,500     (107,300)    (258,900)     593,800      
                                                                              ---------    ---------    ---------    ---------      

INCREASE (DECREASE) IN CASH                                                     278,100      (33,000)    (153,900)    (119,300)     

CASH, beginning of period                                                           500      154,400      154,400      273,700      
                                                                              ---------    ---------    ---------    ---------      

CASH, end of period                                                           $ 278,600    $ 121,400    $     500    $ 154,400      
                                                                              =========    =========    =========    =========      

The accompanying notes are an integral part of these financial statements.                                                          
==============================================================================================================================      

                                                              F-18                                                                  

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                                                         SPECTRUM NATURALS, INC.                                                    
                                            STATEMENTS OF CASH FLOWS (Continued)                                                    

================================================================================                                                    

                                                                                 Three months                   Years ended         
                                                                                ended March 31,                 December 31,        
                                                                          --------------------------      --------------------------
                                                                              1999           1998            1998          1997     
                                                                          ----------      ----------      ----------      ----------
SUPPLEMENTAL CASH-FLOW INFORMATION                                        (unaudited)     (unaudited)                               

Cash paid during the period for:                                                                                                    
    Interest                                                              $  105,800      $  127,400      $  454,400      $  391,000
    Income taxes                                                          $   34,700      $  104,900      $  432,400      $  357,200
Non-cash investing and financing activities:                                                                                        
    Equipment acquired through capital lease                              $     --        $   33,300      $   33,300      $   95,000
    Redemption of stock through issuance of note payable                  $     --        $     --        $  132,700      $1,728,800
    Assets and liabilities contributed for common stock                   $     --        $     --        $     --        $   30,900
    Note receivable from sale of common stock                             $     --        $     --        $     --        $   10,000

The accompanying notes are an integral part of these financial statements.                                                          
====================================================================================================================================

                                                                        F-19                                                        


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                                                         SPECTRUM NATURALS, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 1 - DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING        
POLICIES                                                      

Description of operations - Spectrum Naturals, Inc., manufactures, packages, and
sells organic and natural food products, including cooking and nutritional oils,
condiments,  dressings  and spreads on a wholesale  basis to  distributors.  The
majority of sales are domestic.                                                 

Inventories - Inventories are stated at the lower of cost  (first-in,  first-out
method) or market.                                                              

Property  and  equipment  -  Property  and  equipment  are  stated  at cost  and
depreciated  or  amortized  using  the  straight-line  method  over the  assets'
estimated useful lives.  Costs of maintenance and repairs are charged to expense
as incurred;  significant  renewals and betterments are  capitalized.  Estimated
useful lives are as follows:                                                    

Fixtures and equipment                      2 -  25 years             
Leasehold improvements                      1 -   7 years             
Equipment under capital lease               4 -   6 years             
Computer equipment                          3 -   6 years             
Vehicles                                    5 -   6 years             

Amortization - Trademark,  label  development  and other  intangible  assets are
amortized on the straight-line method over five to thirty years.                

Income  taxes - Income taxes are  recognized  using  enacted tax rates,  and are
composed  of  taxes  on  financial   accounting  income  that  is  adjusted  for
requirements  of current  tax law and  deferred  taxes.  Deferred  taxes are the
expected future tax  consequences  of temporary  differences  between  financial
statement carrying amounts and tax bases of existing assets and liabilities.    

Use of estimates - The  preparation  of the  financial  statements in conformity
with  generally  accepted  accounting  principles  requires  management  to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.                                                                      

Concentrations  of  risk -  Financial  instruments  potentially  subjecting  the
Company to  concentrations  of credit  risk  consist  primarily  of bank  demand
deposits  in  excess  of  FDIC  insurance   thresholds  and  trade  receivables.
Concentrations  of credit risk with respect to trade  receivables is limited due
to the large number of customers  comprising  the  Company's  customer  base and
through ongoing credit evaluations of its customers.                            

Other assets - Other assets include a $15,000  investment in a limited liability
company.  The  investment is accounted  for at the lower of cost or market.  The
Company will recoup the investment though reduced food processing costs and will
share in the profits and losses of the investment.  The Company guarantees up to
$25,000 of bank debt incurred by the limited  liability  company,  including all
interest, late charges and other costs of enforcement of the guaranty.          

Advertising  - Costs  associated  with the  production  of  pamphlets  and other
advertising  literature  are  capitalized  and  amortized  over  the  period  of
distribution,  which  is  generally  six to  twelve  months.  Total  capitalized
advertising  literature  costs at December  31, 1998 and 1997,  were $12,800 and
$52,600,  respectively.  Total capitalized advertising literature costs at March
31,  1999  and  1998,  were  $11,600   (unaudited)   and  $40,900   (unaudited),
respectively.  All other  advertising  costs are  expensed  as  incurred.  Total
advertising  expenses were $387,200 and $244,800,  for the years ended  December
31, 1998 and 1997, respectively.                                                

================================================================================

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                                                         SPECTRUM NATURALS, INC.
                                       NOTES TO FINANCIAL STATEMENTS (Continued)

================================================================================

NOTE 1 - DESCRIPTION OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING        
POLICIES (Continued)                                          

Research  and  development  - Research  and  development  costs are  expensed as
incurred and totaled  $46,000 and $49,600 for the years ended  December 31, 1998
and December 31, 1997,  respectively.  Research and  development  costs  totaled
$49,900  (unaudited) and $2,800 (unaudited) for the three months ended March 31,
1999 and 1998, respectively.                                                    

Interim financial  statements - The accompanying  unaudited financial statements
for the three  months  ended  March 31,  1999 and 1998,  have been  prepared  on
substantially the same basis as the audited financial statements and include all
adjustments,  consisting only of normal  recurring  adjustments  necessary for a
fair presentation of the financial information set forth therein.               

Fair value of financial  instruments - The Company measures its financial assets
and liabilities in accordance with generally accepted accounting principles. The
fair value of a financial instrument is the amount at which the instrument could
be exchanged in a current  transaction  between willing parties.  For certain of
the Company's financial  instruments,  including cash, accounts receivable,  and
accounts  payable,  the carrying amount  approximates  fair value because of the
short maturities.  The carrying amount of Company  borrowings under the lines of
credit,  long-term  debt  agreements,   and  obligations  under  capital  lease,
approximates  fair value because current interest rates available to the Company
for similar debt are approximately the same.                                    

New  accounting  pronouncements  - The Financial  Accounting  Standard Board has
issued SFAS no. 133  "Accounting  for  Derivatives  and Hedging  Activities." It
requires  companies  to record  derivatives  on the  balance  sheet as assets or
liabilities,  measured  at fair market  value.  Gains or losses  resulting  from
changes in the value of those derivatives are accounted for depending on the use
of the  derivative  and  whether  it  qualifies  for hedge  accounting.  The key
criterion for hedge accounting is that the hedging  relationship  must be highly
effective in achieving the offsetting  changes in fair value or cash flows. SFAS
No. 133 is effective  for all fiscal  quarters of fiscal years  beginning  after
June 15, 1999.  Management  believes that the adoption of SFAS No. 133 will have
no material effect on its financial statements.                                 

NOTE  2 - BUSINESS COMBINATION                                                  

On May 14, 1999, the Company  entered into a definitive  agreement to merge with
Organic Food Products,  Inc. (OFPI) in a stock exchange to be accounted for as a
reverse acquisition. As part of that transaction,  Spectrum Naturals, Inc. (SNI)
and Spectrum Commodities,  Inc. (SCI) would merge prior to the effective date of
the merger with OFPI.  Since SNI and SCI are related  entities,  their merger is
accounted  for on the  same  basis  as a  pooling.  Therefore,  these  financial
statements are prepared as if the SNI and SCI merger has been effected.         

Upon the effective date of the SNI and SCI merger,  the stockholders of Spectrum
Commodities, Inc., will transfer all of their outstanding common stock for 1,925
shares of Spectrum  Naturals,  Inc., in a tax free  exchange  accounted for as a
pooling of interests.  Accordingly,  the financial statements have been restated
for all periods  prior to the business  combination  to include the accounts and
results  of  operations   of  Spectrum   Commodities,   Inc.  All   intercompany
transactions have been eliminated.                                              

================================================================================

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                                                                                             SPECTRUM NATURALS, INC. 
                                                                           NOTES TO FINANCIAL STATEMENTS (Continued) 

==================================================================================================================== 

NOTE  2 - BUSINESS COMBINATION (Continued)                                                                           

Gross sales and net income for the  individual  companies  reported prior to the                                     
merger were as follows:                                                                                              

                                           Three months ended March 31,                  Years ended December 31,    
                                         ---------------------------------         --------------------------------- 
                                             1999                 1998                 1998                 1997     
                                         ------------         ------------         ------------         ------------ 
Gross sales:                               unaudited)          (unaudited)                                           
                                                                                                                     
     Spectrum Naturals, Inc.             $  5,612,400         $  5,005,300         $ 20,140,800         $ 18,169,300 
     Spectrum Commodities, Inc.             1,369,500            1,342,100            7,755,600            4,855,000 
                                         ------------         ------------         ------------         ------------ 

                                            6,981,900            6,347,400           27,896,400           23,024,300 
     Eliminating entries                     (475,600)            (569,600)          (3,945,400)          (2,631,900)
                                         ------------         ------------         ------------         ------------ 

                                         $  6,506,300         $  5,777,800         $ 23,951,000         $ 20,392,400 
                                         ============         ============         ============         ============ 
Net income:                                                                                                          
     Spectrum Naturals, Inc.             $    229,900         $     81,300         $    261,400         $    369,200 
     Spectrum Commodities, Inc.                 6,500               25,900              141,800              101,700 
                                         ------------         ------------         ------------         ------------ 

                                         $    236,400         $    107,200         $    403,200         $    470,900 
                                         ============         ============         ============         ============ 

The  consolidated  financial  information  presented above reflects  eliminating                                     
entries for  intercompany  sales.  The conforming of the accounting  policies of                                     
Spectrum  Naturals,  Inc.,  and  Spectrum  Commodities,  Inc.,  resulted  in  no                                     
adjustments to net income or stockholders' equity.                                                                   

NOTE 3 -  RECEIVABLES                                                                                                

                                                          March 31,                            December 31,          
                                                -----------------------------         -----------------------------  
                                                   1999              1998                1998               1997     
                                                ----------        -----------         ----------         ----------  
                                                (unaudited)       (unaudited)                                        
Trade                                           $2,177,000         $2,038,900         $1,608,500         $1,748,200  
Income taxes                                       105,700               --               90,000               --    
Stockholder                                         35,500             11,000             30,500              9,000  
Other                                               31,000              7,900             13,300              9,400  
                                                ----------         ----------         ----------         ----------  

                                                 2,349,200          2,057,800          1,742,300          1,766,600  
Less allowances for doubtful accounts                                                                                
     and chargebacks                                66,700            495,500             29,900             56,700  
                                                ----------         ----------         ----------         ----------  

                                                $2,282,500         $1,562,300         $1,712,400         $1,709,900  
                                                ==========         ==========         ==========         ==========  

===================================================================================================================  

                                                                   F-22                                              

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                                                                                               SPECTRUM NATURALS, INC. 
                                                                             NOTES TO FINANCIAL STATEMENTS (Continued) 

=====================================================================================================================  

NOTE 4 - INVENTORIES                                                                                                   
                                                    March 31,                                   December 31,           
                                       ----------------------------------             ---------------------------------
                                          1999                    1998                  1998                    1997   
                                       -----------            -----------             ----------             ----------
                                       (unaudited)            (unaudited)                                              
                                                                                                                       
Finished goods                          $1,234,000             $1,579,900             $1,643,900             $1,378,700
Raw materials                            1,432,300                875,900              1,128,300              1,118,800
                                        ----------             ----------             ----------             ----------

                                        $2,666,300             $2,455,800             $2,772,200             $2,497,500
                                        ==========             ==========             ==========             ==========

Note 5 - PROPERTY AND EQUIPMENT                                                                                        
                                                               March 31,                         December 31,          
                                                      ---------------------------       ---------------------------    
                                                         1999             1998              1998             1997      
                                                      ----------       ----------       ----------       ----------    
                                                      (unaudited)      (unaudited)                                     
Fixtures and equipment                                $2,914,800       $2,245,600       $2,736,500       $2,335,300    
Leasehold improvements                                   168,100          147,000          166,400          114,900    
Equipment under capital lease                            165,900          165,900          165,900          132,600    
Computer equipment                                       151,900          282,700           69,800          282,700    
Vehicles                                                 126,700           64,500           64,500           64,500    
                                                      ----------       ----------       ----------       ----------    

                                                       3,527,400        2,905,700        3,203,100        2,930,000    
Less accumulated depreciation and amortization         1,185,700        1,051,500        1,126,200        1,117,000    
                                                      ----------       ----------       ----------       ----------    
                                                      $2,341,700       $1,854,200       $2,076,900       $1,813,000    
                                                      ==========       ==========       ==========       ==========    

NOTE 6 - LINES OF CREDIT                                                        

The Company has available a $2,000,000 line of credit, bearing interest at prime
plus 1.75%. The bank's commitment under the line of credit terminates in October
1999,  and is subject to a borrowing base of 80% of eligible  domestic  accounts
receivable  and  60%  of  eligible  inventory,   not  to  exceed  $1,250,000  in
corresponding  loan  amount  based on  eligible  inventory,  as  defined  in the
agreement.  This agreement requires the Company meet restrictions related to key
financial ratios,  cash flow, and non-bank debt, and is secured by substantially
all assets of the Company,  a life insurance  policy in the name of the majority
stockholder,  and  the  majority  stockholder's  personal  guarantee.  Upon  the
completion  of  the  merger  between  Spectrum  Naturals,   Inc.,  and  Spectrum
Commodities, Inc., the bank's commitment under this line of credit will increase
to $2,600,000, with the maximum inventory commitment increasing to $1,550,000.  

The Company is in violation of certain loan  covenants at December 31, 1998. The
bank has not waived these  violations,  but has given the Company until June 30,
1999 to be in compliance.  Management  believes the Company will meet the bank's
requirements.                                                                   

The Company has available a $600,000 line of credit,  which  includes a $200,000
letter of credit facility, with interest at the bank's prime rate plus 1.5%. The
bank's  commitment is considered  month-to-month  and can be terminated  with 30
days' written  notice.  The  commitment is subject to a borrowing base of 80% of
eligible  accounts  receivable  and 40% of  eligible  inventory,  not to  exceed
$200,000  in  corresponding  loan  amount,  as  defined in the  agreement.  This
agreement requires the Company meet restrictions relating to tangible net worth,
key  financial  ratios,  annual  profitability,   non-bank  debt  and  officer's
compensation  and is  secured  by all  assets of the  Company  and the  personal
guarantee of the majority stockholder.                                          

================================================================================

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                                                                                                      SPECTRUM NATURALS, INC.   
                                                                                    NOTES TO FINANCIAL STATEMENTS (Continued)   

=============================================================================================================================   

NOTE 7 - LONG-TERM DEBT                                                                                                         

                                                                March 31,                               December 31,            
                                                     ------------------------------          --------------------------------   
                                                        1999                1998                1998                 1997       
                                                     ----------         -----------          -----------          -----------   
                                                    (unaudited)         (unaudited)                                             
                                                                                                                                
Note payable to former stockholder, with                                                                                        
interest  due  monthly at an  escalating                                                                                        
rate from 7.8 to 12%.  Principal  is due                                                                                        
in  annual   installments   as  follows:                                                                                        
$121,700 in 1999,  $500,000  per year in                                                                                        
2000 and 2001,  and $250,000 per year in                                                                                        
2002 and 2003.  Principal  payments will                                                                                        
accelerate  in the event of future stock                                                                                        
transactions,    as   defined   in   the                                                                                        
agreement. The note is secured by a life                                                                                        
insurance   policy   on   the   majority                                                                                        
stockholder,  redeemed common stock, and                                                                                        
the  majority   stockholder's   personal                                                                                        
guarantee  and  is  subordinated  to all                                                                                        
bank debt and note payable to California                                                                                        
Economic  Development Lending Initiative                                                                                        
(see Note 12)                                       $ 1,621,700         $ 1,621,700           $ 1,621,700         $ 1,621,700   

Non-interest  bearing  notes  payable to                                                                                        
former stockholder, due in two payments;                                                                                        
one  $100,000  payment  in 1999  and one                                                                                        
balloon payment of $513,300,  five years                                                                                        
after the last principal  payment on the                                                                                        
above note. Interest has been imputed at                                                                                        
effective  interest  rates  of 9.5%  and                                                                                        
10.75%,  with an expected repayment date                                                                                        
of  December  2007,  unsecured.  Accrued                                                                                        
interest at  December  31, 1998 and 1997                                                                                        
was  $24,900  and  $5,700,  respectively                                                                                        
(see Note 12)                                          271,700              116,000               264,700             112,700   

Note  payable  to bank,  due in  monthly                                                                                        
installments of $8,300, plus interest at                                                                                        
prime  plus  1.75%,   maturing  December                                                                                        
2003. The agreement requires the Company                                                                                        
meet certain restrictions related to key                                                                                        
financial   ratios,   cash   flow,   and                                                                                        
non-bank   debt,   and  is   secured  by                                                                                        
substantially  all assets of the Company                                                                                        
and the majority  stockholder's personal                                                                                        
guarantee.  The Company is in  violation                                                                                        
of certain  loan  covenants  at December                                                                                        
31, 1998 (see Note 6)                                  475,000                   --               500,000                  --   

=============================================================================================================================   

                                                              F-24                                                              

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                                                                                                         SPECTRUM NATURALS, INC.
                                                                                       NOTES TO FINANCIAL STATEMENTS (Continued)

=============================================================================================================================== 

NOTE 7 -  LONG-TERM DEBT (Continued)                                                                                            

                                                                 March 31,                                 December 31,         
                                                     ----------------------------------          -------------------------------
                                                         1999                  1998                 1998                 1997   
                                                     -----------            -----------          -----------          ----------
                                                     (unaudited)            (unaudited)                                         

Note payable to bank, (SBA loan), due in                                                                                        
monthly    installments    of    $5,700,                                                                                        
including  interest at prime plus 2.75%,                                                                                        
maturing in March  2005,  secured by the                                                                                        
majority      stockholder's     personal                                                                                        
guarantee                                              296,300              327,400               305,200             337,000   

Note  payable  to bank,  due in  monthly                                                                                        
installments   of   $5,000,    including                                                                                        
interest  at the bank's  reference  rate                                                                                        
plus  1.75%,  maturing  in  April  2002,                                                                                        
secured by  equipment  and the  majority                                                                                        
stockholder's personal guarantee                       155,500              197,500               166,500             206,500   

Note payable to bank (SBA loan),  due in                                                                                        
monthly    installments    of    $6,600,                                                                                        
including  interest at prime plus 2.75%,                                                                                        
maturing  in  March  2000,   secured  by                                                                                        
substantially  all assets of the Company                                                                                        
and the majority  stockholder's personal                                                                                        
guarantee                                               79,800              150,300                98,500             167,900   

Note  payable  to  California   Economic                                                                                        
Development   Lending   Initiative,    a                                                                                        
California  corporation,  due in monthly                                                                                        
installments of $2,800, plus interest at                                                                                        
prime plus 3.25%, maturing October 2001,                                                                                        
secured by equipment,  a life  insurance                                                                                        
policy on the majority stockholder,  and                                                                                        
majority      stockholder's     personal                                                                                        
guarantee.  The note is  subordinated to                                                                                        
the line of credit and all notes payable                                                                                        
to bank,  and  requires the Company meet                                                                                        
certain    restrictions    relating   to                                                                                        
tangible   net  worth,   key   financial                                                                                        
ratios,  incurrence of new debt, payment                                                                                        
of dividends, and redemption of stock                   79,300              110,500                87,800             121,800   

Note  payable  to credit  union,  due in                                                                                        
monthly  installments of $990, including                                                                                        
interest  at 7.04%,  maturing in January                                                                                        
2004, secured by vehicle                                49,300                   --                    --                  --   

=============================================================================================================================   

                                                             F-25                                                               

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                                                                                                      SPECTRUM NATURALS, INC.   
                                                                                    NOTES TO FINANCIAL STATEMENTS (Continued)   

=============================================================================================================================   

NOTE 7 -  LONG-TERM DEBT (Continued)                                                                                            

                                                                March 31,                             December 31,              
                                                   ----------------------------------         -------------------------------   
                                                       1999                   1998               1998               1997        
                                                   -----------             ----------         -----------       -------------   
                                                   (unaudited)             (unaudited)                                          
Equipment loan  commitment  from a bank,                                                                                        
allowing  the  Company  to  draw  up  to                                                                                        
$1,000,000   for   equipment   purchases                                                                                        
through June 1999;  draws bear  interest                                                                                        
at prime plus  1.75%,  payable  monthly.                                                                                        
Beginning  July 1999,  principal will be                                                                                        
repaid  over  a  five  year  term.   The                                                                                        
commitment  requires  the  Company  meet                                                                                        
restrictions  related  to key  financial                                                                                        
ratios, cash flow, and non-bank debt and                                                                                        
is secured by equipment  financed by the                                                                                        
commitment      and     the     majority                                                                                        
stockholder's  personal  guarantee.  The                                                                                        
Company is in  violation of certain loan                                                                                        
covenants at December 31, 1998 (see Note                                                                                        
6)                                                     571,400                   --                    --                  --   

Notes  payable  to bank,  due in monthly                                                                                        
installments   totaling   $5,600,   plus                                                                                        
interest  at the bank's  reference  rate                                                                                        
plus  2.25%,   maturing   August   1998,                                                                                        
secured by  substantially  all assets of                                                                                        
the    Company    and    the    majority                                                                                        
stockholder's personal guarantee                            --               28,000                    --              44,800   
                                                    ----------           ----------            ----------          ----------   
                                                     3,600,000            2,551,400             3,044,400           2,612,400   
Less current maturities                                573,300              202,800               512,700            219,400    
                                                    ----------           ----------            ----------          ----------   
                                                   $ 3,026,700          $ 2,348,600           $ 2,531,700         $ 2,393,000   
                                                   ===========          ===========           ===========         ===========   

Maturities of long-term debt for succeeding years are as follows:                                                               

          Year Ending December 31,                                                                                              
          -----------------------                                                                                               
                1999                                     $   512,700                                                            
                2000                                         743,600                                                            
                2001                                         718,700                                                            
                2002                                         419,500                                                            
                2003                                         405,700                                                            
             Thereafter                                      244,200                                                            
                                                        -------------                                                           

                                                         $ 3,044,400                                                            
                                                        =============                                                           

=============================================================================================================================   

                                                              F-26                                                              

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                                                         SPECTRUM NATURALS, INC.
                                       NOTES TO FINANCIAL STATEMENTS (Continued)

================================================================================

NOTE 8 - OBLIGATIONS UNDER CAPITAL LEASE                                        

Future minimum lease payments for equipment  under capital lease  agreements are
as follows:                                                                     

Year Ending December 31,                                  
------------------------                                  

1999                            $   45,500
2000                                35,100
2001                                31,800
2002                                15,200
                                ----------

                                   127,600
Less amounts representing interest          21,500        
                                ----------

Present value of minimum lease payments    106,100        
Less current maturities                     35,300        
                                ----------

                                $   70,800
                                ==========

NOTE 9 - COMMITMENTS                                                            

The  Company  rents  office,   production,  and  warehouse  facilities  under  a
month-to-month lease at $17,700 per month.                                      

The Company rents office  equipment  under  operating  leases  expiring  through
September  2002,  with lease payments of $600 per month.  Options exist to renew
one  lease or  purchase  the  equipment  based on the  fair-market  value of the
equipment at the expiration date.                                               

Rental expense for the years ended December 31, 1998 and 1997,  totaled $237,300
and  $228,200,  respectively.  Rent expense for the three months ended March 31,
1999 and 1998, totaled $54,900 (unaudited).                                     

Future minimum lease payments are as follows:                                   

Year Ending December 31,                            
------------------------                            

     1999                          $   7,700
     2000                              7,000
     2001                              4,600
     2002                              1,200
                                   ---------

                                   $  20,500
                                   =========

The  Company has entered  into a bonus  agreement  with the family of a deceased
employee,  whereby the family  will be paid  $75,000 in the event the Company is
sold.                                                                           

================================================================================

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                                                         SPECTRUM NATURALS, INC.
                                       NOTES TO FINANCIAL STATEMENTS (Continued)

================================================================================

NOTE 10 - INCOME TAXES                                                          

The significant temporary differences between the carrying amounts and tax basis
of existing  assets and  liabilities  that give rise to deferred  tax assets and
liabilities  include using a different  method of depreciation  and amortization
for tax purposes and deduction of paid vacation pay, paid stockholder salary and
bonus, and the previous year's state income taxes, rather that the current state
tax liability.                                                                  

                                                        [Enlarge/Download Table]


                                           Three months ended March 31,    Years ended December 31, 
                                           ---------------------------   -------------------------- 
                                              1999           1998          1998             1997    
                                           ----------      ----------    ---------        --------- 
Provision for income taxes:                (unaudited)     (unaudited)                              
                                                                                                    
     Federal                               $ 121,700       $  62,600     $ 192,900        $ 268,800 
     State                                     8,800          14,300        58,300           73,000 
     Benefit from investment tax credits        --              --         (10,800)         (23,000)
                                           ---------       ---------     ---------        --------- 

                                             130,500          76,900       240,400          318,800 
     Change in deferred income taxes            --              --          (9,700)          18,600 
                                           ---------       ---------     ---------        --------- 

                                           $ 130,500       $  76,900     $ 230,700        $ 337,400 
                                           =========       =========     =========        ========= 

                                                     March 31,                 December 31,         
                                          --------------------------     -------------------------- 
                                             1999            1998           1998            1997    
                                          ----------       ---------     ---------        --------- 

Current deferred income taxes:            (unaudited)     (unaudited)                               
     Gross deferred tax assets             $  77,800       $  63,800     $  77,800        $  63,800 
     Gross deferred tax liabilities           (4,700)         (3,400)       (4,700)          (3,400)
                                           ---------       ---------     ---------        --------- 

                                           $  73,100       $  60,400     $  73,100        $  60,400 
                                           =========       =========     =========        ========= 

Non-current deferred income taxes:                                                                  
     Gross deferred tax assets             $ (19,600)      $ (26,800)    $ (19,600)       $ (26,800)
     Gross deferred tax liabilities          187,600         191,800       187,600          191,800 
                                           ---------       ---------     ---------        --------- 

                                           $ 168,000       $ 165,000     $ 168,000        $ 165,000 
                                           =========       =========     =========        ========= 


NOTE 11 - 401(k) PLAN                                                           

The Company  provides an Internal  Revenue  Code  Section  401(k) Plan  covering
substantially all employees meeting certain age and service  requirements.  Plan
contributions   are  made  at  the   discretion   of  the  Board  of  Directors.
Contributions  for the years ended December 31, 1998 and 1997,  were $26,100 and
$18,000,  respectively.  Contributions for the three months ended March 31, 1999
and 1998, were $12,500 (unaudited) and $4,900 (unaudited), respectively.        

================================================================================

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                                                         SPECTRUM NATURALS, INC.
                                       NOTES TO FINANCIAL STATEMENTS (Continued)

================================================================================

NOTE 12 - STOCK PURCHASE AGREEMENT                                              

During the year ended December 31, 1997, the Company repurchased 5,000 shares of
Company  stock from a stockholder  for a minimum  amount of  $2,235,000.  A note
payable to the Seller was issued in the amount of  $1,621,700.  In  addition,  a
final payment of at least $613,300, will be paid in two payments; one payment of
$100,000  in 1999 and the  balance  approximately  five  years  after  the final
principal  payment on the note,  subject to certain potential income tax events.
This  minimum  final  payment  has been  accrued at its net present  value.  The
agreement was amended during 1998 to increase the final payment from $306,600 to
$613,300 (see Note 7).                                                          

NOTE 13 - STOCK OPTIONS                                                         

During  1998,  the Company  adopted a stock  option plan that  provides  for the
granting of  incentive  and  nonstatutory  stock  options,  stock  bonuses,  and
incentive stock rights to employees,  directors,  and consultants of the Company
and its affiliates to purchase up to an aggregate of 280 shares of common stock.
No options shall be granted under the Plan after 2008.  During 1998, 180 options
were  granted,  no options were  exercised,  and no options were  forfeited.  At
December 31, 1998, 15 options were  exercisable  at an exercise price of $1,500,
and  expire in 2008.  At March 31,  1999,  30  options  were  exercisable  at an
exercise price of $1,500 and expire in 2009 (unaudited).                        

The Company applies Accounting  Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees," and related  interpretations in accounting for stock
options.  Accordingly,  no  compensation  expense has been  recognized for stock
options issued during 1998. Had compensation cost for the Company's options been
determined  based  on the fair  value  at the  grant  date  for  awards  in 1998
consistent  with the provisions of Statement of Financial  Accounting  Standards
No. 123,  "Accounting  for Stock-Based  Compensation,"  the Company's net income
would have changed to the pro forma amounts indicated below:                    

                                                Year ended    Three months ended
                                          December 31, 1998   March 31, 1999
                                            ----------------- ------------------
                                                               (unaudited)

Net income - as reported                      $   403,200         $   236,400   
Net income - pro forma                        $   398,700         $   231,000   

The fair  value of  options  granted is  estimated  on date of grant  using the 
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions:                                                                    

                                        1998
                                          ----------
Dividends                                                     None              
Risk Free interest rate                                 4.34%-5.04%             
Expected life                                           10-13 years             

================================================================================

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                                                         SPECTRUM NATURALS, INC.
                                       NOTES TO FINANCIAL STATEMENTS (Continued)

================================================================================

NOTE 13 - STOCK OPTIONS (Continued)                                             

Options issued during 1998 had an estimated fair value of $658.                 

The stock option activity is as follows:                                        
                                                                 Weighted-
                                         Shares                  Average
                                           Under                  Exercise
                                        Options                  Price
                                           ----------            -------------
Balance, January 1, 1998                           --             $         --  
Granted                                           180                     1,500 
Exercised                                          --                       --  
Forfeited                                          --                       --  
                  ----------
Balance, December 31, 1998                        180             $       1,500 
Granted                                            --                       --  
Exercised                                          --                       --  
Forfeited                                          --                       --  
                   -----------

Balance, Mrach 31, 1999 (unaudited)               180             $       1,500 
                   ===========

================================================================================

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Report of Independent Certified Public Accountants                              

To The Shareholders and Board of Directors of Organic Food Products, Inc.       

We have audited the accompanying balance sheet of Organic Food Products, Inc. as
of  June  30,  1998,  and the  related  statements  of  operations,  changes  in
shareholders'  equity,  and cash flows for the year then ended.  These financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audit.                                                                      

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.          

In our opinion,  the 1998 financial statements referred to above present fairly,
in all material respects, the financial position of Organic Food Products,  Inc.
as of June 30, 1998, and the results of its operations, changes in shareholders'
equity,  and its cash  flows for the year  ended in  conformity  with  generally
accepted accounting principles.                                                 

                      BDO SEIDMAN, LLP
                                  Certified Public Accountants

San Francisco, California                                                       
September 23, 1998, except                                                      
for Note 5, as to which the                                                     
date is October 9, 1998                                                         

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Report of Independent Certified Public Accountants                              

To The Shareholders and Board of Directors of Organic Food Products, Inc.       

We  have  audited  the  accompanying   statements  of  operations,   changes  in
shareholders'  equity,  and cash flows of Organic Food  Products,  Inc., for the
year ended June 30, 1997. These financial  statements are the  responsibility of
the Company's  management.  Our responsibility is to express an opinion on these
financial statements based on our audit.                                        

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audits to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.          

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the results of  operations,  changes in  shareholders'
equity,  and cash flow of Organic Food  Products,  Inc., for the year ended June
30, 1997, in conformity with generally accepted accounting principles.          

                              Semple & Cooper, LLP
                                      Certified Public Accountants
Phoenix, Arizona                                                                
September 24, 1997                                                              

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                                                     Organic Food Products, Inc.

                                                                  Balance Sheets
================================================================================

                                            March 31,             June 30,
                                                 1999                 1998
--------------------------------------------------------------------------------
                       (Unaudited)
Assets                                                                          

Current Assets                                                                  
   Cash                                      $   --               $   41,585
Accounts receivable, less allowances                                  
for bad debts, spoils and returns,                                
and manufacturer charge back                                      
adjustments of $416,313 and $324,493                              
     (Notes 2, 5, 6 and 7)                    1,010,695            1,096,285
   Inventory, net (Notes 1, 2, 4 and 6)       1,942,362            3,693,986
   Prepaid expenses                             173,250              187,469
   Receivable from related party (Note 2)        77,346               50,000
--------------------------------------------------------------------------------
Total current assets                            3,203,653            5,069,325  
--------------------------------------------------------------------------------
Fixed assets (Notes 3, 4, and 5)                1,208,295            1,263,007  

Goodwill (Notes 3, 4 and 8)                        --                  923,515  
--------------------------------------------------------------------------------
Total Assets                                   $4,411,948           $7,255,847  
================================================================================

                                 See accompanying summary of accounting policies
                                              and notes to financial statements.

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                                                     Organic Food Products, Inc.

                                                                  Balance Sheets
================================================================================

                                            March 31,             June 30,
                                                 1999                 1998
--------------------------------------------------------------------------------
                       (Unaudited)

Liabilities and Shareholders' Equity                                            
Current Liabilities                                                             
Notes payable and capitalized lease                                   
obligation payable-current portion                                  
     (Note 5)                                   $1,318,683          $  992,589
Accounts payable and accrued                                          
     expenses-related parties (Note 2)             535,617             587,015
Accounts payable and accrued                                          
     expenses (Notes 6 and 7)                    1,687,567           1,102,582
    Accrued wages and taxes                        155,899             199,221
Notes payable-related parties-current                                 
     portion (Note 2)                              497,238             462,754
--------------------------------------------------------------------------------
Total current liabilities                         4,195,004           3,344,161 

Notes payable-related parties-                                                  
long-term portion (Note 2)                            --                34,484
Capital lease obligation-long-term                                              
portion (Note 5)                                     9,580               --   
--------------------------------------------------------------------------------
Total Liabilities                                 4,204,584           3,378,645 
--------------------------------------------------------------------------------
Commitments (Notes 4, 5, 12 and 13)                                             
Shareholders' Equity (Notes 4, 8, 9 and 12):                                    
Common stock, no par value, 20,000,000                                
shares authorized, 7,275,688 issued                                 
     and outstanding                             9,851,687           9,851,687
     Accumulated deficit                         (9,644,323)         (5,974,485)
--------------------------------------------------------------------------------
Total shareholders' equity                          207,364           3,877,202 
--------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity       $4,411,948          $7,255,847 
================================================================================

                                 See accompanying summary of accounting policies
                                              and notes to financial statements.

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                                                        [Enlarge/Download Table]

                                                                                                        Organic Food Products, Inc. 

                                                                                                           Statements of Operations 
=================================================================================================================================== 

                                                                           Nine Months ended                                        
                                                                               March 31,                   Years ended June 30,     
                                                                    -----------------------------     ----------------------------- 
                                                                         1999            1998              1998           1997      
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                     (Unaudited)                                                    

                                                                                                                                    
Revenues (Note 7)                                                   $  8,015,326     $  8,207,704     $ 12,304,323     $ 11,378,916 
Cost of Goods Sold (Notes 2 and 7)                                     6,984,684        6,054,441        9,419,802        7,530,270 
----------------------------------------------------------------------------------------------------------------------------------- 
Gross Profit                                                           1,030,642        2,153,263        2,884,521        3,848,646 
----------------------------------------------------------------------------------------------------------------------------------- 
Sales and Marketing Expense                                            2,058,958        2,232,404        3,048,865        2,408,864 
General and Administrative Expenses (Note 2)                           1,386,972          771,956        1,922,030        1,118,686 
Loss on Write-down of Fixed Assets and Goodwill (Note 3)               1,019,921             --          2,410,936             --   
----------------------------------------------------------------------------------------------------------------------------------- 
                                                                       4,465,851        3,004,360        7,381,831        3,527,550 
----------------------------------------------------------------------------------------------------------------------------------- 
Income (Loss) from Operations                                         (3,435,209)        (851,097)      (4,497,310)         321,096 
Interest Expense, Net (Note 2)                                          (140,124)         (56,902)        (102,413)        (261,376)
Other Income (Expense), Net                                              (94,505)         (55,805)         (34,719)          11,447 
----------------------------------------------------------------------------------------------------------------------------------- 
Income (Loss) before Income Taxes                                     (3,669,838)        (963,804)      (4,634,442)          71,167 
Provision for Income Tax Benefit (Expense) (Note 10)                        --            240,948           15,200          (16,000)
----------------------------------------------------------------------------------------------------------------------------------- 
Net Income (Loss)                                                   $ (3,669,838)    $   (722,856)    $ (4,619,242)    $     55,167 
====================================================================================================================================

Basic and Diluted Earnings (Loss) per Share (Note 8)                $       (.50)    $       (.12)    $       (.69)    $        .01 
=================================================================================================================================== 

Weighted Average Number of Shares Outstanding (Note 8)                 7,275,668        6,196,064        6,696,945        5,229,061 
=================================================================================================================================== 

                                                 See accompanying summary of accounting policies and notes to financial statements. 

                                                                F-36                                                                

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                                                                                                        Organic Food Products, Inc. 

                                                                                      Statements of Changes in Shareholders' Equity 
=================================================================================================================================== 

                                                                                                            Retained          Total 
                                                                                 Common Stock               Earnings   Shareholders'
                                                                             ------------------------    Accumulated         Equity 
                                                                              Shares         Amount          Deficit)      (Deficit)
----------------------------------------------------------------------------------------------------------------------------------- 
Balance, July 1, 1996                                                        4,500,000    $ 2,317,400    $(1,410,410)   $   906,990 

Proceeds from private offering, net of costs of $340,462 (Note 8)              823,500      1,718,288           --        1,718,288 

Repurchase of shares                                                           (31,250)       (78,125)          --          (78,125)

Stock issued for director expenses                                               5,663         14,157           --           14,157 

Net income for the year                                                           --             --           55,167         55,167 
----------------------------------------------------------------------------------------------------------------------------------- 
Balance, June 30,1997                                                        5,297,913      3,971,720     (1,355,243)     2,616,477 

Repurchase of Shares                                                           (40,000)      (100,000)          --         (100,000)

Proceeds from initial public offering, net  of                                                                                      
 costs of $1,306,404 (Note 8)                                                1,495,000)     4,595,566           --        4,595,566 

Stock issued for director  expenses                                             17,200         34,401           --           34,401 

Stock issued for acquisition of Sunny Farms, Inc. (Note 4)                     283,333        850,000           --          850,000 

Proceeds from sale of stock to Global Natural Brands (Note 8)                  222,222        500,000           --          500,000 

Net loss for the year                                                             --             --       (4,619,242)    (4,619,242)
----------------------------------------------------------------------------------------------------------------------------------- 

Balance, June 30, 1998                                                       7,275,668      9,851,687     (5,974,485)     3,877,202 

Net loss for the period (unaudited)                                               --             --       (3,669,838)    (3,669,838)
----------------------------------------------------------------------------------------------------------------------------------- 

Balance, March 31, 1999 (unaudited)                                          7,275,668    $ 9,851,687    $(9,644,323)   $   207,364 
=================================================================================================================================== 

                                                  See accompanying summary of accounting policies and notes to financial statements.

                                                         F-37                                                                       

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                                                                                                Organic Food Products, Inc.         

                                                                                                   Statements of Cash Flows         
===========================================================================================================================         

                                                                Nine Months ended March 31,        Years ended June 30,             
                                                                ---------------------------        --------------------             

Increase (Decrease) in Cash:                                     1999             1998            1998             1997             
---------------------------------------------------------------------------------------------------------------------------         
                                                              (Unaudited)                                                           

Cash flows from operating activities:                                                                                               
   Net Income (Loss)                                         $(3,669,838)     $  (722,856)     $(4,619,242)     $    55,167         
   Adjustments to reconcile net income (loss) to net                                                                                
   cash used by operating activities                                                                                                
     Depreciation and amortization                               222,059          151,237          345,352          235,875         
     Loan discount amortization                                     --               --               --            118,410         
     Inventory financed through notes payable                       --               --               --            222,523         
     Loan to shareholder forgiven                                   --               --            168,000             --           
     Loss on write-down of fixed assets and goodwill                                                                                
                                                               1,024,213             --          2,410,977             --           
     Stock issued for director's expenses                           --               --             34,401           14,157         
     Provision for reserves against receivables                  116,820             --            160,981             --           
     Provision for reserve for inventory obsolescence             88,240             --             85,000             --           
     Deferred income taxes                                          --           (102,000)         (16,000)          16,000         
   Changes in Assets and Liabilities                                                                                                
     Accounts receivable, net                                    (31,230)         (53,726)          36,625         (525,549)        
     Inventory                                                 1,663,384       (1,133,182)         410,061       (2,021,955)        
     Prepaid expenses and other                                   14,219         (386,228)        (143,644)           5,418         
     Income tax refund receivable                                   --            167,694          167,694           91,753         
     Accounts payable                                            197,967         (223,489)        (461,227)          44,272         
     Accrued liabilities                                         172,753           41,797          206,029          (11,022)        
---------------------------------------------------------------------------------------------------------------------------         

Net cash used by operating activities                           (201,413)      (2,260,753)      (1,214,993)      (1,754,951)        
---------------------------------------------------------------------------------------------------------------------------         

Cash flows from investing activities:                                                                                               
     Purchase of fixed assets                                   (111,178)        (421,322)        (603,915)        (243,596)        
     Advances to shareholder                                     (27,346)         (63,000)         (84,000)         (84,000)        
     Cash received from sale of fixed assets                        --               --             34,600            5,483         
     Purchase of Sunny Farms                                        --               --           (971,171)            --           
---------------------------------------------------------------------------------------------------------------------------         

Net cash used by investing activities                           (138,524)        (484,322)      (1,624,486)        (322,113)        
---------------------------------------------------------------------------------------------------------------------------         

                                                                    F-38                                                            

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                                                                                                Organic Food Products, Inc.         

                                                                                                   Statements of Cash Flows         
===========================================================================================================================         

                                                                Nine Months ended March 31,        Years ended June 30,             
                                                                ---------------------------        --------------------             

Increase (Decrease) in Cash:                                     1999             1998            1998             1997             
---------------------------------------------------------------------------------------------------------------------------         
                                                              (Unaudited)                                                           

Cash flows from financing activities:                                                                                               
     Repayment of notes payable and capital lease                (22,921)      (2,098,523)         (81,356)        (140,627)        
     Repayment of notes payable-related parties                     --         (1,555,966)      (1,749,322)        (257,685)        
     Proceeds from notes payable                                    --          1,378,563             --          1,057,178         
     Proceeds from issuance of stock                                --          4,958,277        5,516,904        1,718,288         
     Proceeds from line of credit                              3,765,363             --          1,911,205             --           
     Repayments on line of credit                             (3,444,090)            --         (2,679,292)            --           
     Re-purchase of treasury stock                                  --               --           (100,000)         (78,125)        
     Deferred offering costs                                        --               --               --           (350,113)        
---------------------------------------------------------------------------------------------------------------------------         

Net cash provided by financing activities                        298,352        2,682,351        2,818,139        1,948,916         
---------------------------------------------------------------------------------------------------------------------------         

Net decrease in cash                                             (41,585)         (62,724)         (21,340)        (128,148)        

Cash at beginning of period                                       41,585           62,925           62,925          191,073         
---------------------------------------------------------------------------------------------------------------------------         

Cash at End of Period                                        $      --        $       201      $    41,585      $    62,925         
============================================================================================================================        

                                           See accompanying summary of accounting policies and notes to financial statements.       

                                                     F-39                                                                           


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                                                     Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

Nature of Operations     Organic Food Products,  Inc.  ("OFPI" or the "Company")
                         is a  California  corporation  incorporated  on July 7,
                         1987. The principal  business purpose of the Company is
                         the  production  and   distribution   of  organic  food
        products throughout the United States.

Use of Estimates         The  preparation of financial  statements in conformity
                         with generally accepted accounting  principles requires
                         management  to  make  estimates  and  assumptions  that
                         affect the reported  amounts of assets and  liabilities
                         and disclosure of contingent  assets and liabilities at
                         the date of the financial  statements  and the reported
                         amounts of revenues and expenses  during the  reporting
                         period.   Actual   results   could  differ  from  those
estimates.                    

Stock-Based              Statement of Financial  Accounting Standards (SFAS) No.
Compensation             123,    Accounting   for    Stock-Based    Compensation
                         established  a fair  value  method  of  Accounting  for
                         stock-based  compensation plans and for transactions in
                         which  an  entity   acquires  goods  or  services  from
                         non-employees in exchange for equity instruments.  SFAS
                         123  encourages,  but does  not  require  companies  to
                         record  compensation  cost  for  stock-based   employee
                         compensation.  The  Company  has chosen to  continue to
                         account for  employee  utilizing  the  intrinsic  value
                         method   prescribed  in  Accounting   Principles  Board
                         Opinion  (APB) No. 25,  Accounting  for Stock Issued to
                         Employees. Accordingly,  compensation cost for employee
                         stock options is measured as the excess, if any, of the
                         fair market price of the Company's stock at the date of
                         grant over the amount an  employee  must pay to acquire
                         the  stock.   Options  granted  to  non-employees   are
                         recorded  at the  estimated  fair  value of the  option
                         granted  over the  service  peri net income and earning
                         per share is provided as if the Company had elected the
                         fair value  method of  accounting  for all  stock-based
compensation awards.          

Accounts Receivable      The Company  provides  allowances for estimated  credit
and Allowances           losses,   product   returns,    spoilage,   and   other
                         manufacturer  charge back  adjustments (for advertising
                         allowances,  etc.)  at a level  deemed  appropriate  to
                         adequately provide for known and inherent risks related
to such amounts.              

                         The  allowances  are based on reviews of loss,  return,
                         spoilage, adjustment history, contractual relationships
                         with customers,  current economic conditions, and other
                         factors  that   deserve   recognition   in   estimating
                         potential  losses.   While  management  uses  the  best
                         information available in making its determination,  the
                         ultimate  recovery of  recorded  accounts,  notes,  and
                         other  receivables is also dependent on future economic
                         and other  conditions  that may be beyond  management's
control.                      

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                                                     Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

Inventory                Inventory quantities and valuations are determined by a
                         physical count and pricing of same. Inventory is stated
                         at the lower of cost,  first-in,  first-out  method, or
market.                       

Earnings Per Share       In February  1997, the financial  Accounting  Standards
                         Board issued SFAS No. 128,  Earnings  Per Share,  which
                         supersedes  APB  No.  15,  the  existing  authoritative
                         guidance.  SFAS  No.  128 is  effective  for  financial
                         statements  for periods ending after December 15, 1997,
                         and requires  restatement of all prior-period  earnings
                         per share data  presented.  The new statement  modifies
                         the  calculations of primary and fully diluted earnings
                         per share and  replaces  them  with  basic and  diluted
                         earning per share are  computed  by dividing  income or
                         loss available to common  shareholders  by the weighted
                         average number of shares  actually  outstanding for the
                         period.   Diluted   earnings  per  share   reflect  the
                         potential  dilution of  securities  that could share in
                         the  earnings of an entity.  Because of losses in 1998,
                         the decline in market price below the exercise price of
                         certain  options and warrants,  and differences of less
                         than $.01 per share due to certain  other  options  and
                         warrants, o securities are either anti-dilutive or have
                         no  effect.  Accordingly,  calculations  under  the new
                         standard,  which  was  adopted  in  the  quarter  ended
                         December  31,  1997  were the same as those  under  the
prior method.                 

Income Taxes             The Company  accounts  for  corporate  income  taxes in
                         accordance  with SFAS No.  109,  Accounting  for Income
                         Taxes, which requires an asset and liability  approach.
                         This approach  results in the  recognition  of deferred
                         tax assets  (future tax benefits) and  liabilities  for
                         the  expected  future  tax  consequences  of  temporary
                         timing  differences  between the book carrying  amounts
                         and the tax basis of assets and liabilities. Future tax
                         benefits  are subject to a valuation  allowance  to the
                 extent deferred tax assets may not be realized.

Revenue Recognition      The  Company  recognizes   revenues  through  sales  of
                         products  primarily  to grocery and club store  chains.
                         Sales are  recorded  when  goods are  shipped  for most
                         customers and upon delivery to retail locations for the
                         Direct  Store  Delivery  program.   Potential  returns,
                         adjustments and spoilage allowances are provided for in
              accounts receivable allowances and accruals.

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                                                     Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

Fixed Assets             Fixed  Assets are  recorded  at cost.  Depreciation  is
                         provided  using  the  straight-line   method  over  the
                         estimated  useful lives of the assets.  Maintenance and
                         repairs that neither materially add to the value of the
                         property nor  appreciably  prolong its life are charged
                         to expense as  incurred.  Betterments  or renewals  are
capitalized when incurred.    

Goodwill                 Goodwill represents the excess of the cost of companies
                         or operations acquired over the fair value of their net
                         assets at the date of acquisition,  and is amortized on
                         the  straight-line  method over the estimated period of
                         benefit,   generally  15  years.  Amortization  expense
                         charged to operations for the years ended June 30, 1998
                         and  1997  was  $135,194   and  $94,887.   The  Company
                         evaluates  the estimated  net  realizable  value of its
                         goodwill  at each  balance  sheet  date,  and records w
                         value  exceeds  net  realizable  value  (see also "Long
Lived Assets").               

Long-Lived Assets        Long-lived  assets,  including fixed assets,  goodwill,
                         and other intangible  assets, are assessed for possible
                         impairment  whenever events or changes in circumstances
                         indicate   that  the   carrying   amounts  may  not  be
                         recoverable,  or whenever management has committed to a
                         plan to dispose of the assets.  Such assets are carried
                         at the lower of book value or fair  value as  estimated
                         by  management  based  on  appraisals,  current  market
                         value,  and  comparable  sales value,  as  appropriate.
                         Assets  by such  impairment  loss  are  depreciated  or
                         amortized  at  their  new  carrying   amount  over  the
                         remaining   estimated  life;   assets  to  be  sold  or
                         otherwise  disposed  of  are  not  subject  to  further
                         depreciation or amortization. In determining whether an
                         impairment exists, the company uses undiscounted future
                      cash flows compared to the carrying value of assets.

Fair Value of            The  Company's  notes  payable  approximate  fair value
Financial Instuments     based on rates  currently  available  from the bank for
                         debt with similar terms and maturities.  The fair value
                         of notes payable-related  parties approximates the book
                         value due to shortness of the remaining  term. The fair
                         value  of  the   Company's   commitments   to  purchase
                         inventory is based on current  market prices  available
                         to  the  Company.  The  carrying  amounts  of  accounts
                         receivable  approximate fair value because of the short
maturity of these items.      

Other New Accounting     During 1997, the Financial  Accounting  Standards Board
Pronouncements           released SFAS No. 130, Reporting  Comprehensive Income.
                         SFAS 130, which is effective for fiscal years beginning
                         after  December 15,  1997,  establishes  standards  for
                         reporting and display of  comprehensive  income and its

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                                                     Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

                         components in the entity's  financial  statements.  The
                         objective  of SFAS 130 is to  report a  measure  of all
                         changes in the equity of an enterprise that result from
                         transactions  and other economic events of the peri the
                         total of net income and all other non-owner  changes in
                         equity. SFAS 130 does not address issues of recognition
                         or  measurement  for   comprehensive   income  and  its
                         components and,  therefore,  it will not have an impact
                         on the  financial  condition  or results of the Company
                         upon adoption. The Financial Accounting Standards Board
                         also recently released SFAS No. 131,  Disclosures about
                         Segments of an Enterprise and Related Information. This
                         statement,  which is also  effective for fisca December
                         15,  1997,   requires   reporting   of  financial   and
                         descriptive   information  about  reportable  operating
                         segments.  Operating  segments  are  components  of  an
                         enterprise about which separate  financial  information
                         is available  that is evaluated  regularly by the chief
                         operating  decision-maker  in deciding  how to allocate
                         resources  and in  assessing  performance.  The Company
                         believes  it  operates  in only one  business  segment,
                         production and distribution of processed organic foods,
                         and  h   complied   with  any   additional   disclosure
                         requirements.  SFAS  131  does not  address  issues  of
                         recognition  or  measurement  in  the  basic  financial
                         statements,  and  thus  will  have  no  impact  on  the
                         Company's  financial  condition or results of operation
upon adoption.                

Interim Financial        The unaudited interim financial  statements include all
Statements               adjustments  (consisting of normal recurring  accruals)
                         which,  in the opinion of management,  are necessary in
                         order to make the financial  statements not misleading.
                         Operating results for the nine-month period ended March
                         31, 1999, are not necessarily indicative of the results
                         that may be  expected  for the entire  year ending June
                         30, 1999. These financial statements have been prepared
                         in  accordance  with  the  instructions  for F  certain
                         information  required by generally accepted  accounting
                         principles.   These   statements   should  be  read  in
                         conjunction with financial statements and notes thereto
                         included  in the  Company's  Form  10-KSB  for the year
ended June 30, 1998.          

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                                                   Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

1.   Inventory           Inventory consisted of the following:                  

                                                  March 31, 1999   June 30, 1998
                         -------------------------------------------------------
                       Raw materials              $  775,373      $1,513,659
                       Finished goods              1,283,304       2,305,327
                                                  ----------      ----------
                                                   2,058,677       3,818,986
Less: provision for           
                       obsolete inventory           (166,315)      (125,000)
                         -------------------------------------------------------
                                                  $1,942,362      $3,693,986
                         =======================================================

2. Related Party         Advances to Shareholder                                
Transactions                                                              

                         As of June 30, 1997, the Company had advanced  $168,000
                         to a  shareholder  in  accordance  with  an  employment
                         agreement.  The advance was  unsecured,  non-  interest
                         bearing,  and  considered  short-term in nature.  As of
                         June 30, 1998, this agreement was eliminated and future
                         payments   were   discontinued.   The  balance  of  the
                         non-interest-bearing note ($168,000) was written off at
June 30, 1998.                

Notes Payable-Related Parties 

                         At  June  30,  1998,  notes  payable-related   parties,
                         consist of the following: Two 6% interest bearing notes
                         payable  for  $248,619 to two  corporate  shareholders,
                         with monthly payments of $20,000,  including  principal
                         and  interest   until  paid  in  full;   unsecured  and
        subordinated to other secured parties.

                         A schedule of future minimum principal  payments due on
                         notes  payable  outstanding  at June  30,  1998,  is as
follows:                      

                       Year ending June 30,                           Amount
                         -------------------------------------------------------
                       1999                                         $462,754
                       2000                                           34,484
                         -------------------------------------------------------
                                                                    $497,238
                         =======================================================

                         Organic Ingredients,  Inc. ("OGI"), a company 50% owned
                         by the Company's  President,  supplies  certain organic
                         ingredients used primarily in the Company's fruit juice
                         products. Total purchases from OGI amounted to $564,450
                         during  fiscal year 1998.  The price of, and terms for,
                         the  ingredients  are fair,  reasonable  and consistent
                         with prices and terms which would be  available  to the
Company from third parties.   

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                                                 Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

Management Services Contract  

                         In April 1998,  the Company  contracted  for management
                         services from Global  Natural  Brands,  Inc.  (Global).
                         Under the  contract,  Global  provided  the services of
                         four individuals to fill the offices of Chief Executive
                         Officer,  Chief Financial Officer, Vice President-Sales
                         &  Distribution  and  Vice  President-Marketing  for  a
                         four-year  period  ending June 30,  2002.  The contract
                         provided for minimum  annual cash payments to Global of
                         $300,000,  with  escalations  based on  certain  earnin
                         attainment  conditions.  In  addition,  up to 1,808,784
                         options to purchase  the  Company's  Common Stock could
                         have vested over a total of four years based on certain
                         stock  price  and  earnings   improvement   performance
                         conditions.  However,  the  contract  with  Global  was
            terminated by the Company in October 1998.

                         Under the  agreement,  $154,135 in management  fees and
                         related  relocation  expenses was  incurred  during the
                         year ended June 30,  1998.  Additionally,  Global  also
                         agreed  to  reimburse  the  Company  $50,000  in  costs
                         related to a failed  acquisition of an unrelated  third
            party during the year ended June 30, 1998.

                         During the nine-month  period ended March 31, 1999, the
                         Company  recorded  payables  to Global  Natural  Brands
                         totaling  $380,000.  However,  certain of these amounts
                         are in dispute due to the contract's  termination,  and
                         may be offset by amounts  owed to the Company by Global
                         Natural  Brands.   These   related-party   transactions
                         included  expenses for  management's  fees and personal
expenses.                     

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                                                 Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

3. Fixed Assets          A  summary  of  fixed  assets  at June  30,  1998 is as
and Goodwill          follows:                                            

                                                                [Download Table]

                                           Life          Amount  
---------------------------------------------------------------- 
                                                                 
Computer software and equipment           5 years     $   53,750 
Leasehold improvements                    7 years        182,994 
Machinery and equipment                7-20 years      1,036,259 
Office equipment                          5 years         52,500 
Printing plates                           7 years         28,998 
Vehicles                                 5 years          19,542 
---------------------------------------------------------------- 
                                                       1,373,863 
Accumulated depreciation                                (110,856)
---------------------------------------------------------------- 
                                                      $1,263,007 
================================================================ 

                         During  1998,  the  Company   determined  that  certain
                         goodwill  and fixed assets were  potentially  impaired,
                         based on  estimations of expected  undiscounted  future
                         cash  flows from  operations  under  current  operating
                         conditions.  Discounted  cash flow estimates  under the
                         same operating assumptions indicated that there may not
                         be  sufficient  cash flows to  recover  the cost of the
                         goodwill   arising   from  the  purchase  of  OFP,  and
                         accordingly,  goodwill of  $2,182,401  was written off.
                         The rela by $240,024  to their fair value as  estimated
                         by  appraisal  from an  independent  third  party.  The
                         resulting total $2,422,425 loss is included in "Loss on
                         write-down   of  fixed  assets  and  goodwill"  in  the
                         accompanying  statements  of  operations.  The affected
                         fixed  assets  will be  depreciated  at their  new book
                         basis  over  the  remaining  useful  life.  Unamortized
                         goodwill of  $923,156  relating  to the  February  1998
                         Sunny Farms  acquisition (see Note 4) was not affected,
  and will be reeva ongoing basis.

                         During  the  nine  months  ended   December  31,  1998,
                         additional  goodwill  in the  amount  of  $156,867  was
                         recorded  to reflect  the  estimated  value of escrowed
                         shares of  common  stock  which  will be  released  and
                         recorded in 1999 in  connection  with the Sunny  Farms'
                         purchase  (see Note 4). This  amount and all  remaining
                         unamortized goodwill,  totaling $1,080,382, was written
                         off during the nine months ended March 31, 1999,  as it
                         was determined that, based on the results for the first
                         year amounts  could  not  be  recovered  under  current
operating conditions.         

             For the years ended June 30, 1998 and 1997,
                 depreciation expense was $210,158 and $140,988,
respectively.                 

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                                               Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

4. Acquisition of        In February,  1998,  OFPI  acquired  the natural  fruit
   Sunny Farms           juice  and water  bottling  operations  of Sunny  Farms
                         Corporation  for a total of $971,171 in cash (including
                         costs of  acquisition)  and assumption of debt, and the
                         issuance  of  Common  Stock of the  Company  valued  at
                         $1,700,000.  Of the total purchase  price,  $850,000 of
                         the Common  Stock  portion is  contingent  upon certain
                         performance   conditions  over  the  first  year  after
                         acquisition and,  accordingly,  was not yet recorded at
June 30, 1998.                

                         The $963,822  excess of the  remaining  purchase  price
                         over   identified   inventory   and  fixed   assets  of
                       approximately $857,000 was accounted for as goodwill.

                         Of the contingent consideration,  $156,867 was recorded
                         and  subsequently  written off in the nine months ended
March 31, 1999 (see Note 3).  

                         The actual  number of common  stock to be  released  is
                         currently  under  review  and  will  be  recorded  when
              mutually agreed to by both parties involved.

                         The  agreement  was  accounted  for as a purchase  and,
                         accordingly,  the results of the Sunny Farms operations
                         are included from February 11, 1998 forward.  Pro forma
                         unaudited  estimated  results of  operations  as if the
                         acquisition  had  been  made  effective  July 1,  1996,
                         beginning  of  the  first  period  presented,   are  as
follows:                      

                    Years ended June 30,          1998            1997
                         -------------------------------------------------------
                        Revenues                   $15,486,000     $18,498,000
                         Net loss                   $(5,059,000)    $(1,061,000)
                         Loss per share             $      (.75)    $      (.18)
                         -------------------------------------------------------

                         Only the  basic  shares  issued  in  February  1998 not
                         subject to  forfeit  (see Note 8) are  included  in the
                 above pro forma computations of loss per share.

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                                             Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

5.  Notes Payable        At  June  30,  1998  notes   payable   consist  of  the
following:                    
                        --------------------------------------------------------

     Revolving line of credit with Wells
     Fargo Bank for $1,000,000, interest
     at the  bank's  prime  rate plus 1%
     per annum (9.5% at June 30,  1998),
     interest    due    monthly,    with
     principal  balance  due in  full in
     October,  1998;  collateralized  by
     various corporate assets.  Replaced
                      subsequent to year end(1).                  $874,853

     12%  Interest-bearing  note payable
                      to Deere Park  Capital  Management.          100,000

                      Other                                         17,736
                         -------------------------------------------------------
                                                                  $992,589
                         =======================================================

                         (1) On October 9, 1998, a new financing  agreement with
                         Finova Capital  Corporation was signed for a prime plus
                         2.5% $3,000,000  revolving line of credit to be secured
                         by  inventory  and  receivables,  as well as a $500,000
equipment line.               

                         During  the nine  months  ended  March  31,  1999,  the
                         Company entered into a four-year  capitalized equipment
 lease in the amount of $23,752.

6.   Commitments         Inventory Purchases                                    

                         The Company is committed to purchase raw materials over
                         the next year at contracted  prices.  At June 30, 1998,
                         these    future    committed    purchases    aggregated
                         approximately   $1,846,000   based  on  the  contracted
                         prices.  The  Company  has  no  other  material  future
commitments.                  

Lease Obligations             

                         The Company  leases  office,  warehouse and  production
                         space in Morgan Hill, California under a non-cancelable
                         operating lease agreement,  expiring April,  2003. Rent
                         expense under this lease  agreement for the years ended
                         June  30,  1998  and  1997  was  $102,590  and  $78,732
                         respectively.   A  schedule  of  future  minimum  lease
                         payments due under the non-cancelable  operating leases
  at June 30, 1998, is as follows:

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                                           Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

                       Year ending                                    Amount
                         -------------------------------------------------------
                        1999                                          $ 83,585
                        2000                                            83,545
                        2001                                            85,820
                        2002                                            88,395
                        Subsequent                                      60,097
                         -------------------------------------------------------
                                                                      $401,442
                         =======================================================

Employment Contracts          

                         The Company entered into employment  contracts with two
                         key  employees.  The contracts  were to expire  through
                         July,  1999 and provide for  minimum  annual  salaries,
                         adjusted for  cost-of-living  changes,  and  incentives
                         based on the Company's  attainment of specified  levels
                         of sales and earnings.  As of June 30, 1998,  contracts
                         were terminated by mutual  agreement and  approximately
                         $167,000  still due under one of the contracts has been
accrued.                      

                         In  connection  with the Sunny Farms  acquisition  (see
                         Note 4), the Company entered into employment agreements
                         with  two  former   employees  of  Sunny   Farms.   The
                         agreements  expire in  February  2000 and  provide  for
                         payments of the remaining  base  salaries  (aggregating
                         approximately  $12,000  per  month)  in  the  event  of
                         termination  other than for cause or resignation of the
                         employee(s).  Both of these  employees  resigned during
       the nine months ended March 31, 1999.

7.  Significant          For the years ended June 30, 1998 and 1997, the Company
    Concentrations       had one  customer  which  accounted  for  approximately
                         seventeen  percent (17%) and twenty-one  percent (21%),
                         respectively,  of the total sales  volume.  At June 30,
                         1998 and  1997,  the  amounts  due  from  the  customer
                         included  in  accounts  receivable  were  $128,662  and
                         $374,591,  respectively.  For the year  ended  June 30,
                         1998, the Company had one supplier, which accounted for
                         an aggregate of  approximately  twenty percent (20%) of
                         year ended June 30, 1997, the Company had one supplier,
                         which accounted for  approximately  thirty-one  percent
                         (31%) of the  total  purchases.  At June  30,  1998 and
                         1997,  the amounts due to these  suppliers  included in
                         accounts    payable   were   $84,022   and    $473,658,
                         respectively. The Company believes that other suppliers
                         are  available  who could  provide  product  at similar
                         prices and terms. A change in suppliers, however, could
                         cause a delay in manufacturing and a possible loss of s
operating results adversely.  

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                                           Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

8. Shareholders'         Common Stock                                           
Equity                                                                    
                         The  Company  completed  a private  placement  offering
                         during the year ended June 30, 1997 at a gross price of
                         $2.50 per share.  The  proceeds  from the  offering  of
                         823,500  shares  were  $1,718,288,   net  of  costs  of
                         $340,462.  The Company  completed  its  initial  public
                         offering of 1,495,000 shares of its no par value common
                         stock at a price of $4.00  per  share  sold  (including
                         195,000 underwriters over-allotment shares at $3.60 per
                         share) under its Registration  Statement and Prospectus
                         proceeds of  approximately  $5,900,000 were received by
the Company.                  

                         In connection with the management contract discussed in
                         Note 3, Global  purchased a total of 222,222  shares of
                         the Company's  Common Stock in June, 1998 for $500,000,
                         and has  committed  to  invest an  additional  $500,000
                         before the  earlier of 30 days after  completion  of an
                         acquisition transaction (as defined) or April 15, 1999.
                         The  agreement  targeted the value of the  purchases at
                         $2.50 per share.  OFPI  committed  to issue  additional
                         shares to bring the market value of the share amount if
                         the  market  value of the  Common  Stock  was less than
                         $2.50 per share for the average of the  closing  prices
                         on  specified  trading  dates in August and  September,
                         1998  (with a  minimum  assigned  value  of  $2.25  per
                         share). Under this provision, the Company issued 22,222
                         additional shares in connection with the first $500,000
                         purchase,  and will issue  222,222  shares in total for
                         the second purchase.  The additional  shares related to
                         the first  purchase  are  treated as if the June,  1998
             date of sale of the initial related shares.

                         In  connection  with the  February,  1998  Sunny  Farms
                         acquisition,  the  Company  issued a total  of  425,000
                         shares at $4.00 per share, of which 212,500 were placed
                         in escrow.  The  agreement  provided  for  issuance  of
                         additional  shares if the market price of the Company's
                         shares was not at least $4.00 per share for the average
                         of the closing  prices on  specified  trading  dates in
                         August,  1998 (with a minimum  assigned  value of $3.00
                         per share). Under this provision, the Company issued in
                         connection with the purchase.  These additional  shares
                         are treated as if they were  outstanding for the entire
                period since the Sunny Farms acquisition date.

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                                         Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

                         However,  as  discussed  in Note 4, as  one-half of the
                         total are  contingent  shares  held in  escrow  pending
                         future  performance   conditions,   only  283,333  have
                         actually been recorded as issued in the year ended June
                         30, 1998. The contingently  forfeitable  shares are not
                         included  in the  calculation  of  earnings  (loss) per
share.                        

9. Stock Options         Otions                                                 
and Warrants                                                              
                         The Company has a stock  option plan  pursuant to which
                         options  to  purchase  shares of the  Company's  common
                         stock may be granted to employees  and  directors.  The
                         plan  provides  that the option price shall not be less
                         than the fair market value of the shares on the date of
                         grant,  and that the  options  expire  ten years  after
                         grant. Options generally vest ratably over four or five
                         year  periods  for  employees,  and up to two years for
                         directors.  At June 30,  1998,  there  were  625,000 be
granted under the plan.       

                         The  following  table  shows  activity  in  outstanding
options during 1998 and 1997: 

                                                        [Enlarge/Download Table]

                                                                          1998                    1997                  
                                                                ---------------------    -------------------            
                                                                             Weighted               Weighted            
                                                                              Average                Average            
                                                                             Exercise               Exercise            
                                                                   Shares       Price      Shares      Price            
                         -----------------------------------------------------------------------------------            
                                                                                                                        
                         Outstanding, beginning of year           625,000       $2.11     483,000      $2.00            
                         Granted-employees and directors           40,000       $3.34     142,000      $2.50            
                         Granted-management services            1,808,784       $2.25         -        -                
                         Canceled or expired                     (131,000)      $2.50         -        -                
                         Outstanding, end of year               2,342,784       $2.26     625,000      $2.11            
                         -----------------------------------------------------------------------------------            
                         Options exercisable at year end          283,000       $2.00     311,000      $2.10            
                         -----------------------------------------------------------------------------------            
                         Weighted average fair value of                                                                 
                          options granted during the year-                                                              
                          employee and director shares only                     $1.75                  $0.29            
                         -----------------------------------------------------------------------------------            

                         The  following  table  shows  information  for  options                                        
                         outstanding or exercisable as of June 30, 1998:                                                

                                      F-51                                                                              

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                                              Organic Food Products, Inc.                                               

                                                  Summary of Accounting Policies                                        
                                (Information as of and for the nine months ended                                        
                                           March 31, 1999 and 1998 is Unaudited)                                        
================================================================================                                        

                                                        Options Outstanding                Options Exercisable          
                                            ------------------------------------   ------------------------------------ 
                                                            Weighted                               Weighted             
                                                             Average    Weighted                   Average     Weighted 
                                              Number        Remaining    Average     Number        Remaining    Average 
                            Range of        Outstanding    Contractual  Exercise   Exercisable    Contractual   Exercise
                         Exercise Price     at 12/31/98    Life (Years)   Price    at 12/31/98   Life (Years)   Price   
                         ---------------------------------------------------------------------------------------------- 
                            $2-$2.99          2,302,784        6.6        $2.24      283,000        6.8          $2.10  
                            $3-$3.34             40,000       10.0        $3.34         --           --          --     
                         ---------------------------------------------------------------------------------------------- 
                                              2,342,784        6.3        $2.26      283,000        6.8          $2.10  
                         ============================================================================================== 

                         In 1998, the Company also granted options for 1,808,784
                         shares  at $2.25 per  share to the  management  company
                         providing  executive  management services (see Note 2).
                         The  options  vest over a  four-year  period  beginning
                         April 15,  1998,  and are  exercisable  for four  years
                         after  vesting.  Vesting  of  each  year's  options  is
                         dependent  upon  performance   conditions  relating  to
                         improvement  in  earnings  and  share  price  for which
                         targets are to be established yearly. The fair value of
                         the  op  expense  upon  attainment  or  probability  of
                         attainment of the  performance  target over the service
                         period.  However,  as of June 30, 1998, no such targets
                         were  set by OFPI  and  the  management  company,  and,
                         accordingly,  no amounts were  included in expense.  No
                         shares had vested by October  1998 when the  management
                 company's contract was terminated (see Note 2).

                         All stock options  issued to employees have an exercise
                         price  not  less  than  the  fair  market  value of the
                         Company's  common  stock  on  the  date  of  grant.  In
                         accordance with  accounting for such options  utilizing
                         the  intrinsic  value  method,   there  is  no  related
                         compensation   expense   recorded   in  the   Company's
                         financial   statements.   Had  compensation   cost  for
                         stock-based  compensation  been determined based on the
                         fair  value  of the  grant  dates  consistent  with the
                         method of SFAS 123,  th and  earnings  (loss) per share
                         for the years ended June 30, 1998 and 1997,  would have
                         been adjusted to the pro forma amounts presented below:

                     June 30,                       1998            1997
                         -------------------------------------------------------
Net income (loss)             
                       As reported                $(4,619,233)     $55,167
                       Pro forma                  $(4,622,802)     $13,987
Earnings (loss) per share     
                       As reported                $      (.69)     $   .01
                     Pro forma                  $      (.69)     $  --
                         =======================================================

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                                                     Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

                         The fair value of option  grants are  estimated  on the
                         date   of    grant    utilizing    the    Black-Scholes
                         option-pricing  model,  with the following  assumptions
                         for grants in the years  ended June 30,  1998 and 1997,
                         respectively:  expected  life of five  years,  expected
                         volatility of 50.4% and 14.4%, risk-free interest rates
                         of 5.6% and 8%, and no dividend  yield.  The fair value
                         at date of grant for director and employee  options for
                         1998 and 1997  approximated  $1.75 and $.29 per  share,
                         res the 1998 management  company options,  estimated as
                         of  September   23,1998,   the  date  of  this  report,
approximated $.50 per share.  

Warrants                      

                         The  Company  issued  warrants  to  an  underwriter  in
                         connection with a private  placement  offering in 1995.
                         As of June 30, 1998,  150,000 warrants were outstanding
                         at  exercise  prices of $2.00 per  share,  expiring  on
December 31, 2002.            

                         In addition, the Company issued warrants to individuals
                         in connection with various ten percent (10%) promissory
                         note  agreements in 1997. As of June 30, 1998,  200,666
                         warrants were  outstanding at exercise  prices of $3.00
           per share, expiring on December 31, 1999.

                         In  connection  with its August,  1997 IPO, the Company
                         issued  130,000  warrants to purchase  shares of common
                         stock at $4.80 per share,  expiring  in  August,  2002.
                         Also in 1998, the Company issued warrants at $2.625 per
                         share  expiring  in  February,  2003  in  exchange  for
                         services  related to the Sunny Farms  acquisition  (see
Note 5).                      

10.  Income Taxes and    A reconciliation  of the Federal  statutory rate to the
     Deferred Income     tax provision of the corresponding years is as follows:
 Taxes                                              1998            1997
                         -------------------------------------------------------
Tax benefit (expense) at      
effective Federal           
                          statutory rate             $1,564,800        $ (8,800)
                         Non deductible expens          (10,900)         (2,600)
Valuation limitation on       
                       deferred tax assets        (1,749,600)           --
State income tax expense      
(benefit), net of Federal   
                          effect                        210,900          (4,600)
                         -------------------------------------------------------
                                                      $  15,200        $(16,000)
                         =======================================================

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                                                   Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

                      Deferred tax assets at June 30, 1998 are as follows:
                         -------------------------------------------------------
                        Net operating losses                         $ 888,200
                        Goodwill amortization and write-down           712,700
                        Depreciation and fixed asset  write-down        11,900
                        Allowances against receivables                 110,300
                        State income taxes, net of Federal benefits    234,000
                        Other                                           42,700
                        Total                                        1,999,800
                         Valuation allowance                         (1,999,800)
                         -------------------------------------------------------
                      Net                                         $     --
                         =======================================================

                         Since  the  Company  could  not  determine  it was more
                         likely than not that the  deferred  tax assets would be
                         realized, a 100% valuation allowance has been provided.
                         At June 30, 1998, the Company had Federal and state net
                         operating loss carryforwards available to offset future
                         Federal and state taxable  income,  in the  approximate
                         amounts of $2,612,000 and $1,426,000,  expiring through
       June 30, 2013 and 2003, respectively.

11. Statements of        Non-Cash Investing and Financing Activities            
Cash flows                                                              
                         The  Company   recognized   investing   and   financing
                         activities  that affected assets and  liabilities,  but
                         did not  result in cash  receipts  or  payments.  These
     non-cash activities are as follows:

                    Years ended June 30,            1998          1997
                         -------------------------------------------------------
Issuance of stock for a       
portion of Sunny Farms      
                     acquisition                  $850,000      $   --
Deferred offering costs       
charged to Shareholder'     
                     equity                        421,338          --

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                                                     Organic Food Products, Inc.

                                                  Summary of Accounting Policies
                                (Information as of and for the nine months ended
                                           March 31, 1999 and 1998 is Unaudited)
================================================================================

Stock issued for directors    
                       expenses                       34,401        14,157
Inventory financed through    
the issuance of a note      
                       payable                          --         222,523
Asset additions financed      
through the issuance of     
                       notes payable                    --         141,186
Interest imputed on a           
                      discounted note payable           --         118,410
Asset additions financed        
through capital lease         
                      obligations                       --          23,752
                        ========================================================

                         During the nine-month  period ended March 31, 1999, the
                         Company reclassed  $37,322  previously held in accounts
                         payable to notes payable related parties. Additionally,
                         goodwill  in the amount of  $156,867  was  recorded  to
                         reflect  the  estimated  value of  escrowed  shares  of
                         common  stock,  which will be released  and recorded as
issued in 1999 (see Note 4).  

12. Subsequent Event     On May 14,  1999,  the Company and  Spectrum  Naturals,
                         Inc.,   and  its   affiliate,   Spectrum   Commodities,
                         (collectively,   "SNI")   entered   into  a  definitive
                         agreement to merge the  companies in a stock  exchange.
                         In  addition,  the Company  entered  into a  definitive
                         agreement  to  acquire  all the  outstanding  shares of
                         Organic  Ingredients,  Inc.  Under  the  terms  of  the
                         anticipated  merger,  which will be accounted  for as a
                         reverse   acquisition   purchase,   SNI  will   receive
                         approximately 75% of th the Company, subject to certain
                         adjustments.  The merger and  related  acquisition  are
                         subject  to  shareholders'  approvals.  The  completion
                         dates  for  the   transactions   are   dependent   upon
                         regulatory  approvals  and  preparation  of the related
                         proxy. In the interim, the Company and SNI have entered
                         into an advisory services agreement until the merger is
completed.                    

13. Year 2000 Issues     Like other  companies,  Organic  Food  Products,  Inc.,
   (Unaudited)           could be adversely  affected if the  computer  systems,
                         which  the  Company  and  its  providers  use,  do  not
                         properly process and calculate date-related information
                         and data  from the  period  surrounding  and  including
                         January 1, 2000.  This is  commonly  known as the "Year
                         2000"  issue.  Additionally,  this issue  could  impact
                         non-computer  systems  and devices  such as  production
                         equipment, elevators, etc. At this time, because of the
                         comp issue,  management cannot provide  assurances that
                         the Year  2000  issue  will not have an  impact  on the
Company's operations.         

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INDEX TO ANNEXES

Agreement and Plan of Merger and Reorganization                                 
dated May 14, 1999 by and between Organic Food                                  
Products, Inc. and Organic Ingredients, Inc. ........................  Annex A  

Agreement and Plan of Merger and Reorganization                                 
dated May 14, 1999 by and between Organic Food                                  
Products, Inc. and Spectrum Naturals, Inc. ..........................  Annex B  

Section 1300 to 1304 of the California Corporation Code .............  Annex C  

Form of Amended and Restated Articles of Incorporation                          
of Organic Food Products, Inc........................................  Annex D  

Form of Organic Food Products, Inc. Employment Agreement ............  Annex E  

Form of Organic Food Products, Inc. Shareholder Lock-up                         
Agreement ...........................................................  Annex F  

Form of Voting Agreement dated May 14, 1999                                     
between Spectrum Naturals, Inc. and certain shareholders of                     
Organic Food Products, Inc...........................................  Annex G  

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                                                                         ANNEX A

AGREEMENT AND PLAN OF MERGER AND REORGANIZAITON 

by and between: 

ORGANIC FOOD PRODUCTS, INC. 

a California corporation; and 

ORGANIC INGREDIENTS, INC.,

a California corporation

------------------------

May 14, 1999

------------------------

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TABLE OF CONTENTS 

                                                                      Page

SECTION 1.DESCRIPTION OF TRANSACTION.......................................1    

     1.1      Merger of the Company into OFPI..........................1

     1.2      Effect of the Merger.....................................1

     1.3      Closing; Effective Time..................................1

     1.4      Directors and Officers...................................2

     1.5      Conversion of Shares.....................................2

     1.6      Closing of the Company's Transfer Books..................2

     1.7      Exchange of Certificates.................................2

     1.8      Tax Consequences.........................................3

     1.9      Accounting Treatment.....................................3

     1.10     Further Action...........................................3

SECTION 2.REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................3    

     2.1      Due Organization; No Subsidiaries; Etc...................4

     2.2      Articles of Incorporation and Bylaws; Records............4

     2.3      Capitalization...........................................4

     2.4      Financial Statements.....................................5

     2.5      Absence of Changes.......................................5

     2.6      Title to Assets..........................................7

     2.7      Accounts Receivable; Loans and Advances..................7

     2.8      Inventory................................................8

     2.9      Equipment; Leasehold.....................................8

     2.10     Proprietary Assets.......................................8

     2.11     Contracts................................................9

     2.12     No Undisclosed Liabilities..............................11

     2.13     Compliance with Legal Requirements......................11

     2.14     Governmental Authorizations.............................11

     2.15     Tax Matters.............................................11

     2.16     Employee and Labor Matters; Benefit Plans...............12

     2.17     Environmental Matters...................................14

     2.18     Sale of Products; Performance of Services...............15

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TABLE OF CONTENTS 
(continued) 
                                                                      Page

     2.19     Insurance...............................................15

     2.20     Related Party Transactions..............................16

     2.21     Legal Proceedings; Orders...............................16

     2.22     Authority; Binding Nature of Agreement..................16

     2.23     Non-Contravention; Consents.............................17

     2.24     Vote Required...........................................17

     2.25     Company Action..........................................18

     2.26     Full Disclosure.........................................18

     2.27     Finder's Fee............................................18

SECTION 3.REPRESENTATIONS AND WARRANTIES OF OFPI..........................18    

     3.1      Due Organization, Etc...................................18

     3.2      Articles of Incorporation and Bylaws; Records...........19

     3.3      Capitalization, Etc.....................................19

     3.4      SEC Filings; Financial Statements.......................20

     3.5      Absence of Changes......................................20

     3.6      Title to Assets.........................................22

     3.7      Accounts Receivable; Loans and Advances.................23

     3.8      Inventory...............................................23

     3.9      Equipment; Leasehold....................................23

     3.10     Proprietary Assets......................................24

     3.11     Contracts...............................................25

     3.12     No Undisclosed Liabilities..............................26

     3.13     Compliance with Legal Requirements......................26

     3.14     Governmental Authorizations.............................27

     3.15     Tax Matters.............................................27

     3.16     Employee and Labor Matters; Benefit Plans...............27

     3.17     Environmental Matters...................................29

     3.18     Sale of Products; Performance of Services...............30

     3.19     Insurance...............................................30

     3.20     Related Party Transactions..............................31
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                                                                      Page

     3.21     Legal Proceedings; Orders...............................31

     3.22     Authority; Binding Nature of Agreement..................31

     3.23     Non-Contravention; Consents.............................32

     3.24     Vote Required...........................................32

     3.25     OFPI Action.............................................32

     3.26     Full Disclosure.........................................33

     3.27     Finder's Fee............................................33

SECTION 4.CERTAIN COVENANTS OF THE COMPANY................................33    

     4.1      Access and Investigation................................33

     4.2      Operation of the Company's Business.....................34

     4.3      Notification; Updates to Company Disclosure Schedule....35

     4.4      No Solicitation. During the Pre-Closing Period..........36

     4.5      Company Shareholders' Meeting...........................36

4.6      Tax Representation Letters; Continuity of Interest   
              Certificates............................................37

SECTION 5.CERTAIN COVENANTS OF OFPI.......................................37    

     5.1      Access and Investigation................................37

     5.3      Notification; Updates to OFPI Disclosure Schedule.......39

     5.4      No Solicitation.........................................40

     5.5      OFPI Shareholders' Meeting..............................40

     5.6      Tax Representation Letters..............................41

SECTION 6.ADDITIONAL COVENANTS OF THE PARTIES.............................41    

     6.1      Filings and Consents....................................41

     6.2      Public Announcements....................................42

     6.3      Reasonable Efforts......................................42

     6.4      Registration Statement..................................42

     6.5      Additional Agreements...................................43

     6.6      Regulatory Approvals....................................43

SECTION 7.CONDITIONS PRECEDENT TO OBLIGATIONS OF OFPI.....................43    

     7.1      Satisfactory Completion of Pre-Merger Review............44

     7.2      Accuracy of Representations.............................44

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                                                                      Page

     7.3      Performance of Covenants................................44

     7.4      Compliance Certificate..................................44

     7.5      Shareholder Approval....................................44

     7.6      Consents................................................44

     7.7      Legal Opinion...........................................44

     7.8      Tax Opinion.............................................44

     7.9      No Restraints...........................................44

     7.10     Employment Agreements...................................44

     7.11     Shareholder Lock-up Agreements..........................45

SECTION 8.CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY..............45    

     8.1      Accuracy of Representations.............................45

     8.2      Performance of Covenants................................45

     8.3      Compliance Certificate..................................45

     8.4      Shareholder Approval....................................45

     8.5      Consents................................................45

     8.6      Legal Opinion...........................................45

     8.7      Tax Opinion.............................................45

     8.8      No Restraints...........................................46

SECTION 9.TERMINATION AND INDEMNIFICATION.................................46    

     9.1      Termination.............................................46

     9.2      Effect of Termination...................................47

     9.3      Fees and Expenses; Termination Fees.....................47

     9.4      Indemnification by OFPI.................................47

     9.5      Indemnification by the Company..........................48

     9.6      Threshold...............................................49

     9.7      Maximum Liability.......................................49

     9.8      Calculation of Indemnification Payments.................49

SECTION 10.  MISCELLANEOUS PROVISIONS.....................................50    

     10.1     Survival of Representations and Warranties..............50

     10.2     Further Assurances......................................50

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TABLE OF CONTENTS 
(continued) 

                                                                    Page

     10.3     Attorneys' Fees.........................................50

     10.4     Notices.................................................50

     10.5     Time of the Essence.....................................51

     10.6     Governing Law; Venue....................................51

     10.7     Successors and Assigns..................................51

     10.8     Remedies Cumulative; Specific Performance...............52

     10.9     Waiver..................................................52

     10.10    Amendments .............................................52

     10.11    Severability ...........................................52

     10.12    Parties in Interest ....................................52

     10.13    Disclosure Schedules ...................................52

     10.14    Entire Agreement .......................................53

     10.15    Construction ...........................................53

     10.16    Headings ...............................................53

     10.17    Counterparts ...........................................53

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EXHIBITS

Exhibit A       -       Certain Definitions                                     

Exhibit B       -       Directors and Officers of OFPI                          

Exhibit C       -       Company Tax Representative Letter                       

Exhibit D       -       OFPI Tax Representation Letter                          

Exhibit E       -       Form of Company Legal Opinion                           

Exhibit F       -       Form of Company Tax Opinion                             

Exhibit G       -       Form of OFPI Legal Opinion                              

Exhibit H       -       Form of OFPI Tax Opinion                                

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AGREEMENT AND PLAN  
OF MERGER AND REORGANIZATION

    THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION ("Agreement") is made
and entered into as of May 14, 1999, among ORGANIC FOOD PRODUCTS, INC., a       
California corporation ("OFPI"), ORGANIC INGREDIENTS, INC., a California        
corporation (the "Company"), JOHN BATTENDIERI and JOSEPH STERN (collectively,   
"Company Shareholders"). Certain capitalized terms used in this Agreement are   
defined in the attached Exhibit A.                                              

RECITALS

   A. OFPI and the Company intend to effect a merger of the Company with and
into OFPI (the "Merger") in accordance with this Agreement and the California   
General Corporation Law (the "CGCL"). Upon consummation of the Merger, the      
Company will cease to exist, and OFPI will continue as the surviving            
corporation.                                                                    

B. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as   
amended (the "Code"). For accounting purposes, it is intended that the Merger be
treated as a purchase by OFPI by the Company.                                   

     C. This Agreement has been adopted and approved by the respective boards of
directors of OFPI and the Company. The Company Shareholders are the sole owners 
of the Company stock.                                                           

D. It is intended that promptly after the consummation of the Merger, 
Spectrum Naturals, Inc. ("Spectrum"), will merge with and into OFPI (the        
"Spectrum Merger").                                                             

 AGREEMENT

         The parties to this Agreement,  intending to be legally bound, agree as
follows:                                                                        

SECTION 1. DESCRIPTION OF TRANSACTION 

1.1 Merger of the Company into OFPI. Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time (as defined in    
Section 1.3), the Company shall be merged with and into OFPI, and the separate  
existence of the Company shall cease. OFPI will continue as the surviving       
corporation in the Merger (the "Surviving Corporation").                        

  1.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the CGCL.                    

1.3 Closing; Effective Time. The consummation of the transactions     
contemplated by this Agreement (the "Closing") shall take place at the offices  
of Cooley Godward LLP, One Maritime Plaza, 20th Floor, San Francisco, California
94111 at a time and on a date which shall be promptly (but not more than two (2)

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days following) the satisfaction or waiver of the conditions set forth in       
Sections 7 and 8 (the "Closing Date"). Contemporaneously with or as promptly as 
practicable after the Closing, a properly executed agreement or certificate of  
merger conforming to the requirements of the CGCL (the "Certificate of Merger") 
shall be filed with the Secretary of State of the State of California. The      
Merger shall take effect at the time the Certificate of Merger is filed with and
accepted by the Secretary of State of the State of California (the "Effective   
Time").                                                                         

  1.4 Directors and Officers. Unless otherwise determined by OFPI prior to
the Effective Time the directors and officers of OFPI immediately after the     
Spectrum Merger Effective Time shall be the individuals identified on the       
attached Exhibit B.                                                             

     1.5 Conversion of Shares. Subject to Section 1.7(b) and Section 1.8, at the
Effective Time, by virtue of the Merger and without any further action on the   
part of OFPI, the Company or any shareholder of the Company, each share of      
Company Common Stock (as defined in Section 2.3) outstanding immediately prior  
to the Effective Time shall be converted into thirty-five (35) fully paid and   
non-assessable shares (the "Shares") of OFPI Common Stock (as defined in Section
3.3) such that the Company shall issue 3,950,000 shares of OFPI Common Stock by 
virtue of the Merger.                                                           

     1.6 Closing of the Company's Transfer Books. At the Effective Time, (a) all
certificates representing shares of Company Common Stock outstanding immediately
prior to the Effective Time shall automatically be canceled and retired and     
shall cease to exist, and all holders of certificates representing shares of    
Company Common Stock that were outstanding immediately prior to the Effective   
Time shall cease to have any rights as shareholders of the Company, and (b) the 
stock transfer books of the Company shall be closed with respect to all shares  
of such Company Common Stock outstanding immediately prior to the Effective     
Time. No further transfer of any such shares of Company Common Stock shall be   
made on such stock transfer books after the Effective Time. If, after the       
Effective Time, a valid certificate previously representing any of such shares  
of Company Common Stock (a "Company Stock Certificate") is presented to OFPI,   
such Company Stock Certificate shall be canceled and shall be exchanged as      
provided in Section 1.7.                                                        

1.7 Exchange of Certificates.                                         

   (a) Exchange Procedures. At or as soon as practicable after the
Closing, the holders of Company Common Stock shall surrender their Company Stock
Certificates in exchange for certificates representing OFPI Common Stock,       
pursuant to this Agreement. Subject to Section 1.7(b), upon such surrender of a 
Company Stock Certificate for exchange, (1) the holder of such Company Stock    
Certificate shall be entitled to receive in exchange therefor a certificate     
representing the number of shares of OFPI Common Stock that such holder has the 
right to receive pursuant to Section 1.5, and (2) the Company Stock Certificate 
so surrendered shall be canceled. Until surrendered as contemplated by this     
Section 1.7(a), each Company Stock Certificate shall be deemed, from and after  
the Effective Time, to represent only the right to receive shares of OFPI Common
Stock (and cash in lieu of any fractional share of OFPI Common Stock as         
contemplated by Section 1.7(b)), pursuant to this Agreement. If any Company     

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Stock Certificate shall have been lost, stolen or destroyed, OFPI shall issue a 
certificate representing OFPI Common Stock with respect to such lost, stolen or 
destroyed Company Stock Certificate in accordance with this Agreement upon      
delivery by the owner of such lost, stolen or destroyed Company Stock           
Certificate to OFPI of an appropriate affidavit as indemnity against any claim  
that may be made against OFPI with respect to such Company Stock Certificate.   

          (b) Fractional Shares. No fractional shares of OFPI Common Stock shall
be issued in connection with the Merger, and no certificates for any such       
fractional shares shall be issued. In lieu of such fractional shares, any holder
of Company Common Stock who would otherwise be entitled to receive a fraction of
a share of OFPI Common Stock (after aggregating all fractional shares of OFPI   
Common Stock issuable to such holder) shall, upon surrender of such holder's    
Company Stock Certificate(s), be paid in cash the dollar amount (rounded to the 
nearest whole cent), without interest, determined by multiplying such fraction  
by the Designated OFPI Stock Price. The "Designated OFPI Stock Price" shall be  
the closing sales price of one share of OFPI Common Stock as reported on the    
Nasdaq Small Cap Market on the Closing Date, or if not so reported, as reported 
on the electronic bulletin board as of such date.                               

      (c) No Liability. OFPI shall not be liable to any holder or former
holder of Company Common Stock for any shares of OFPI Common Stock (or dividends
or distributions with respect thereto), or for any cash amounts, delivered to   
any public official pursuant to any applicable abandoned property, escheat or   
similar law.                                                                    

1.8 Tax Consequences. For federal income tax purposes, the Merger is  
intended to constitute a reorganization within the meaning of Section 368(a) of 
the Code. The parties to this Agreement hereby adopt this Agreement as a "plan  
of reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of  
the United States Treasury Regulations.                                         

   1.9 Accounting Treatment. For accounting purposes, the Merger is intended
to be treated as a purchase. For purposes of determining the purchase price, the
price per share shall be $0.7083, which is the average of the closing sale      
prices per share of OFPI's Common Stock as traded on the Nasdaq Small Cap Market
on the three (3) trading days immediately preceding February 19, 1999, the date 
the terms of the transaction were first publicly announced (the "Applicable     
Price").                                                                        

    1.10 Further Action. If, at any time after the Effective Time, any further
action is determined by OFPI to be necessary to carry out the purposes of this  
Agreement or to vest OFPI with full right, title and possession of and to all   
rights and property of the Company, the officers and directors of OFPI shall be 
fully authorized, in the name of the Company, to take such action.              

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY                        

  The Company represents and warrants to OFPI that, except as set forth in
the disclosure schedule prepared by the Company in accordance with the          
requirements of Section 10.13 and that has been delivered by the Company to OFPI
on the date of this Agreement (the "Company Disclosure Schedule"):              

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2.1 Due Organization; Subsidiaries; Etc.                              

     (a) Each of Company and its subsidiary is duly organized, validly
existing and in good standing under the laws of their respective jurisdictions  
of incorporation with full corporate power and authority: (i) to conduct its    
business in the manner in which its business is currently being conducted (ii)  
to own and use its assets in the manner in which its assets are currently owned 
and used and (iii) to perform its obligations under all Contracts by which is   
its bound. The Company has no subsidiaries other than the subsidiary disclosed  
in Part 2.1 of the Company Disclosure Schedule (the "Company Subsidiary").      

     (b) The Company and the Company Subsidiary maintain facilities or
employees in each state listed in Part 2.1(b) of the Company Disclosure         
Schedule. Each of the Company and the Company Subsidiary is duly qualified to do
business and is in good standing in each jurisdiction in which the failure to be
so qualified would have a Material Adverse Effect on the Company or on the      
ability of the Company to consummate the transactions contemplated hereby.      

2.2 Articles of Incorporation and Bylaws; Records. The Company has    
delivered or made available to OFPI accurate and complete copies of: (1) the    
Company's articles of incorporation and bylaws as currently in effect, including
all amendments thereto; (2) the stock records of the Company; and (3) the       
minutes and other records of the meetings and other proceedings (including any  
actions taken by written consent or otherwise without a meeting) of the         
shareholders of the Company, the Board of Directors of the Company and all      
committees of the Board of Directors of the Company. The Company is not in      
violation of any of the provisions of its articles of incorporation or bylaws.  
The books of account, stock records, minute books and other records of the      
Company are accurate and complete in all material respects, and have been       
maintained in accordance with prudent business practices.                       

  2.3 Capitalization. The authorized capital stock of the Company consists
of: 100,000 shares of Common Stock, no par value per share ("Company Common     
Stock"), of which 100,000 shares have been issued and are outstanding as of the 
date hereof. Part 2.3 of the Company Disclosure Schedule sets forth, as of the  
date hereof, the number of shares of Company Common Stock owned of record by    
each of the Company Shareholders. All of the outstanding shares of Company      
Common Stock have been duly authorized and validly issued, and are fully paid   
and non-assessable, and none of such shares is subject to any repurchase option 
or restriction on transfer other than restrictions imposed by federal or state  
securities laws. There are no outstanding subscriptions, options, calls,        
warrants or other rights (whether or not currently exercisable) to acquire any  
shares of the capital stock or other securities of the Company. All outstanding 
shares of Company Common Stock have been issued in compliance with all          
applicable securities laws and other applicable Legal Requirements. Except as   
set forth in Part 2.3 of the Company Disclosure Schedule, the Company has never 
repurchased, redeemed or otherwise reacquired any shares of its capital stock or
other securities. There are no preemptive or similar rights with respect to the 
Company's capital stock. There is no Company Contract (or, to the Company's     
knowledge, any other agreement or arrangement to which the Company is not a     
party) relating to the voting or registration of, or restricting any Person from
purchasing, selling, pledging or otherwise disposing of (or granting any option 
or similar right with respect to), any shares of Company Common Stock. There is 

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no shareholder rights plan (or similar plan commonly referred to as a "poison   
pill") or Contract under which Company is or may become obligated to sell or    
otherwise issue any shares of its capital stock or any other securities.        

2.4 Financial Statements.                                             

 (a) The Company has delivered to OFPI the following financial
statements and notes (collectively, the "Company Financial Statements"):        

              (i) the audited balance sheets of the Company as of December 31,
1998, and the reviewed balance sheets as of December 31, 1997 and 1996, and the 
related audited statements (as to the year ending December 31, 1998) and        
reviewed but unaudited statements (as to the year ending December 31, 1997 and  
1996) of income, statements of shareholders' equity and statements of cash flows
of the Company for the years then ended, together with the notes thereto and the
report of an independent auditor relating thereto; and                          

             (ii) The unaudited balance sheet of the Company as of March 31,
1999, and the related unaudited statement of income of the Company for the      
one-month period then ended.                                                    

     (b) The Company Financial Statements present fairly the financial
position of the Company as of the respective dates thereof and the results of   
operations and cash flows of the Company for the periods covered thereby. The   
Company Financial Statements have been prepared in accordance with generally    
accepted accounting principles applied on a consistent basis throughout the     
periods covered.                                                                

2.5 Absence of Changes. Except as described in Part 2.5 of the Company
Disclosure Schedule, since March 31, 1999 through the date of this Agreement:   

       (a) there has not been any material adverse change in the business,
condition, assets, liabilities, operations or financial performance of the      
Company, and, to the Knowledge of the Company, no event has occurred that could 
reasonably be expected to have a Material Adverse Effect on the Company taken as
a whole;                                                                        

        (b) there has not been any loss, damage or destruction to any of the
Company's assets (whether or not covered by insurance) that could reasonably be 
expected to have a Material Adverse Effect on the Company;                      

    (c) neither the Company nor the Company Subsidiary has declared,
accrued, set aside or paid any dividend stock split, combination or             
reclassification or made any other distribution in respect of any shares of     
capital stock and has not repurchased, redeemed or otherwise reacquired any     
shares of capital stock or other securities;                                    

          (d) neither the Company nor the Company Subsidiary has sold, issued or
authorized the issuance of (i) any capital stock or other security, (ii) any    
option, call, warrant or right to acquire, or otherwise relating to, any capital

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stock or any other security, or (iii) any instrument convertible into or        
exchangeable for any capital stock or other security;                           

      (e) there has been no amendment to the articles of organization or
bylaws of the Company or the Company Subsidiary, and neither the Company nor the
Company Subsidiary has effected or been a party to any Company Acquisition      
Transaction, recapitalization, reclassification of shares, stock split, reverse 
stock split or similar transaction;                                             

     (f) neither the Company nor the Company Subsidiary has amended or
waived any of its rights under, or permitted the acceleration of vesting under  
any restricted stock purchase agreement;                                        

     (g) neither the Company nor the Company Subsidiary has formed any
subsidiary or acquired any equity interest in any other Entity;                 

   (h) neither the Company nor the Company Subsidiary has made any
capital expenditure which, when added to all other capital expenditures made    
since March 31, 1999, exceeds $25,000 in the aggregate;                         

      (i) neither the Company nor the Company Subsidiary has (i) entered
into any Material Company Contract (as defined in Section 2.10(a)), or (ii)     
amended or prematurely terminated, or waived any material right or remedy under,
any Material Company Contract to which it is or was a party or under which it   
has or had any material rights or obligations;                                  

        (j) neither the Company nor the Company Subsidiary has (i) acquired,
leased or licensed any right or other asset from any other Person, (ii) sold or 
otherwise disposed of, or leased or licensed, any right or other asset to any   
other Person, or (iii) waived or relinquished any right, except for purchases of
inventory and sales of products in the ordinary course of business and except   
for immaterial rights or other immaterial assets acquired, leased, licensed or  
disposed of in the ordinary course of business and consistent with the Company's
past practices;                                                                 

         (k) neither the Company nor the Company Subsidiary has written off as
uncollectible, or established any extraordinary reserve with respect to, any    
account receivable or other indebtedness in excess of $10,000 individually or   
$25,000 in the aggregate;                                                       

          (l) neither the Company nor the Company Subsidiary has made any pledge
of any of its assets or otherwise permitted any of its assets to become subject 
to any Encumbrance, except for pledges of assets valued at $25,000 or less,     
individually or in the aggregate, made in the ordinary course of business and   
consistent with the Company's past practices;                                   

       (m) neither the Company nor the Company Subsidiary has not (i) lent
money to any Person, or (ii) incurred or guaranteed any indebtedness for        
borrowed money;                                                                 

(n) neither the Company nor the Company Subsidiary has (i)  
established, adopted or amended any Employee Benefit Plan, (ii) paid any bonus  
or made any profit-sharing or similar payment to, or increased the amount of the
wages, salary, commissions, fringe benefits or other compensation or            
remuneration                                                                    

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payable to, any of its directors, officers or employees, (iii) hired any new    
employee, in either case except in the ordinary course of business and          
consistent with past practices or (iv) entered into any severance or employment 
agreement with any person;                                                      

         (o) neither the Company nor the Company Subsidiary has changed any of
its methods of accounting or accounting practices in any material respect;      

       (p) neither the Company nor the Company Subsidiary has made any Tax
election;                                                                       

       (q) neither the Company nor the Company Subsidiary has commenced or
settled                                                                         
any Legal Proceeding;                                                           

       (r) neither the Company nor the Company Subsidiary has entered into
any material transaction or taken any other material action outside the ordinary
course of business or inconsistent with its past practices;                     

   (s) neither the Company nor the Company Subsidiary has made any
material write-down of inventory; and                                           

    (t) neither the Company nor the Company Subsidiary has agreed or
committed to take any of the actions referred to in clauses "(c)" through "(s)" 
above.                                                                          

2.6 Title to Assets.                                                  

         (a) Each of the Company and the Company Subsidiary owns, and has good
and valid title to all assets purported to be owned by it, including all of the 
assets reflected in the Company Financial Statements and all other assets       
reflected in the Company's books and records as being owned by the Company.     
Except as set forth in Part 2.6(a) of the Company Disclosure Schedule, all of   
said assets are owned by the Company and the Company Subsidiary free and clear  
of any liens or other Encumbrances, except for (i) any lien for current taxes   
not yet due and payable, and (ii) minor liens that have arisen in the ordinary  
course of business and that would not (in any case or in the aggregate) have a  
Material Adverse Effect on the Company.                                         

     (b) Part 2.6(b) of the Company Disclosure Schedule identifies all
assets that are being leased or licensed to the Company and the Company         
Subsidiary that involve obligations of the Company in excess of $25,000 on an   
individual basis.                                                               

2.7 Accounts Receivable; Loans and Advances.                          

    (a) All accounts receivable of the Company and the Company Subsidiary that
are reflected in the Company Financial Statements or in the accounting records  
of the Company as of the date hereof (collectively, the "Company Accounts       
Receivable") represent valid obligations arising from sales actually made or    
services actually performed in the ordinary course of business. The Company     
Accounts Receivable are current and collectible net of any respective reserves  
shown in the Company Financial Statements or on the accounting records of the   

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Company as of the date hereof (which reserves are adequate and calculated       
consistent with past practice). There is no contest, claim, or right of set-off,
other than returns in the ordinary course of business, under any Contract with  
any obligor of any Company Accounts Receivable relating to the amount or        
validity of such Company Accounts Receivable.                                   

       (b) Part 2.7(b) of Company Disclosure Schedule contains an accurate
and complete list of all loans and advances made by the Company or the Company  
Subsidiary (and pursuant to which amounts are outstanding as of the date of this
Agreement) to any employee, director, consultant or independent contractor of   
Company or the Company Subsidiary, other than routine travel advances made to   
employees in the ordinary course of business.                                   

2.8 Inventory. Part 2.8 of the Company Disclosure Schedule provides an
accurate and complete breakdown of all inventory (including raw materials, work 
in process and finished goods) of the Company as of March 31, 1999. All of the  
Company's existing inventory (including all inventory that is reflected on the  
unaudited balance sheet referenced in Section 2.4(ii) and that has not been     
disposed of by the Company since March 31, 1999):                               

       (a) is of such quality and quantity as to be usable and saleable by
the Company in the ordinary course of business and consistent with the Company's
past practices;                                                                 

      (b) has been priced at the lower of cost or market value using the
"first-in, first-out" method; and                                               

(c) is free of any defect or deficiency.                    

 The inventory levels maintained by the Company (i) are not excessive in
light of the Company's normal operating requirements, (ii) are adequate for the 
conduct of the Company's operations in the ordinary course of business and      
consistent with past practices, and (iii) are comparable to the inventory levels
maintained by Company Comparable Entities.                                      

  2.9 Equipment; Leasehold. The real property leased by and other tangible
assets leased or owned by the Company are adequate for the uses to which they   
are being put, are in good condition and repair (ordinary wear and tear         
excepted) and are adequate for the conduct of the Company's business in the     
manner in which such business is now being conducted.                           

  Neither the Company nor the Company Subsidiary owns any real property or
any material interest in real property. Part 2.9(b) of the Company Disclosure   
Schedule describes all leases of real property held by the Company and the      
Company Subsidiary.                                                             

2.10 Proprietary Assets.                                              

  (a) Except as set forth in Part 2.10 of the Company Disclosure
Schedule, there is no Proprietary Asset that is owned by or licensed to the     
Company or that is otherwise used or useful in connection with the Company's    
business. The Company Proprietary Assets identified in Part 2.10 of the Company 
Disclosure Schedule constitute all of the Proprietary Assets necessary to enable
the                                                                             

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Company to conduct its business in the manner in which its business is currently
being conducted and in the manner in which its business is proposed to be       
conducted.                                                                      

       (b) To the Knowledge of the Company, the Company has good and valid
title to all Company Proprietary Assets free and clear of all liens and other   
Encumbrances, and has a valid right to use all Proprietary Assets. Neither the  
Company nor the Company Subsidiary is obligated to make any payment to any      
Person for the use of any Company Proprietary Asset. To the Knowledge of the    
Company, each of the Company and the Company Subsidiary is free to use, modify, 
copy, distribute, sell, license or otherwise exploit each of the Company        
Proprietary Assets on an exclusive basis. (except for any Proprietary Asset that
is licensed to the Company on a non-exclusive basis under any third party       
software license generally available to the public at a cost of less than       
$2,500).                                                                        

(c) Each of the Company and the Company Subsidiary has taken
reasonable measures and precautions necessary to protect and maintain the       
confidentiality and secrecy of all Company Proprietary Assets (except Company   
Proprietary Assets whose value would be unimpaired by public disclosure) and    
otherwise to maintain and protect the value of all Company Proprietary Assets.  
Neither the Company nor the Company Subsidiary has disclosed or delivered or    
permitted to be disclosed or delivered to any Person, and no Person (other than 
the Company) has access to or has any rights with respect to any Company        
Proprietary Asset, in either case except pursuant to a valid non-disclosure     
agreement.                                                                      

        (d) To the Knowledge of the Company, none of the Company Proprietary
Assets infringes or conflicts with any Proprietary Asset owned or used by any   
other Person. To the Knowledge of the Company, neither the Company nor the      
Company Subsidiary is infringing, misappropriating or making any unlawful use   
of, and neither the Company nor the Company Subsidiary has at any time          
infringed, misappropriated or made any unlawful use of, or received any notice  
or other communication of any actual, alleged, possible or potential            
infringement, misappropriation or unlawful use of, any Proprietary Asset owned  
or used by any other Person. To the Knowledge of the Company, no other Person is
infringing, misappropriating or making any unlawful use of, and no Proprietary  
Asset owned or used by any other Person infringes or conflicts with, any Company
Proprietary Asset.                                                              

     (e) The Company Proprietary Assets constitute all the Proprietary
Assets necessary to enable the Company to conduct its business in the manner in 
which such business has been conducted. Neither the Company nor the Company     
Subsidiary has licensed any of the Company Proprietary Assets to any Person on  
an exclusive basis, and neither the Company nor the Company Subsidiary has      
entered into any covenant not to compete or Contract limiting its ability to    
exploit fully any of its Proprietary Assets or to transact business in any      
market or geographical area or with any Person.                                 

       (f) No shareholder, officer or director of the Company has title to
any Company Proprietary Asset which would be necessary to enable the Company to 
conduct its business in the manner in which such business is currently being    
conducted.                                                                      

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2.11 Contracts.                                                       

        (a) Part 2.11(a) (and Part 2.9 regarding leases of real property) of
the Company Disclosure Schedule identifies each Company Contract that           
constitutes a "Material Company Contract." For purposes of this Agreement, a    
"Material Company Contract" shall be deemed to be any Company Contract:         

     (i) relating to the employment or engagement of, or the
performance of services by, any employee, consultant or independent contractor  
which involves a potential commitment of the Company in excess of $25,000 per   
year, including any Company Contract involving severance payments or            
acceleration benefits upon a Company Acquisition Transaction;                   

           (ii) relating to the acquisition, transfer, use, development,
sharing or license of any Company Proprietary Asset (except in the ordinary     
course of business and except for any Company Proprietary Asset that is licensed
to the Company under any third party software license agreement generally       
available to the public at a cost of less than $25,000);                        

             (iii) imposing any material restriction on the Company's or the
Company Subsidiary's right or ability (A) to compete with any other Person, (B) 
to acquire any product or other asset or any services from any other Person, to 
sell any product or other asset to or perform any services for any other Person 
or to transact business or deal in any other manner with any other Person, or   
(C) to develop or distribute any Company Proprietary Asset;                     

              (iv) creating or involving any agency relationship, distribution
arrangement or franchise relationship involving payments to or from the Company 
or obligations in excess of $25,000 per year;                                   

          (v) relating to the acquisition, issuance or transfer of any
securities of the Company under which the Company has any current rights or     
obligations;                                                                    

               (vi) creating or relating to the creation of any Encumbrance with
respect to any asset owned or used by the Company or the Company Subsidiary     
having a value in excess of $25,000;                                            

            (vii) involving or incorporating any guaranty, any pledge, any
performance or completion bond, any indemnity, any right of contribution or any 
surety arrangement in excess of $25,000 per year;                               

             (viii) creating or relating to any partnership or joint venture
or any material sharing of revenues, profits, losses, costs or liabilities;     

           (ix) relating to the purchase or sale of any product or other
asset by or to, or the performance of any services by or for, any Related Party 
(as defined in Section 2.20);                                                   

       (x) entered into outside the ordinary course of business;

           (xi) that may not be terminated by the Company or the Company
Subsidiary (without penalty) within 120 days after the delivery of a termination
notice by                                                                       

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the Company the Company Subsidiary and which involves payments or commitments of
$5,000 or more;                                                                 

             (xii) contemplating or involving (A) the payment or delivery of
cash or other consideration in an amount or having a value in excess of $25,000 
in the aggregate, or (B) the performance of services having a value in excess of
$25,000 in the aggregate; and                                                   

(xiii) which is a lease of real property.         

   (b) The Company has delivered to OFPI accurate and complete copies of all
Material Company Contracts identified in Part 2.11(a) of the Company Disclosure 
Schedule, including all amendments thereto. Each Material Company Contract      
identified in Part 2.11(a) of the Company Disclosure Schedule is valid and in   
full force and effect, and is enforceable by the Company in accordance with its 
terms, subject to (i) laws of general application relating to bankruptcy,       
insolvency and the relief of debtors, and (ii) rules of law governing specific  
performance, injunctive relief and other equitable remedies.                    

  (c) Neither the Company nor the Company Subsidiary nor, to the Company's
Knowledge, any other party, has materially violated or breached, or committed   
any material default under, any Material Company Contract;                      

(i) to the Knowledge of the Company, no event has occurred, and no    
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, (A) result in a violation or breach of
any of the provisions of any Material Company Contract, (B) give any Person the 
right to declare a default or exercise any remedy under any Material Company    
Contract, (C) give any Person the right to accelerate the maturity or           
performance of any Material Company Contract, or (D) give any Person the right  
to cancel, terminate or modify any Material Company Contract;                   

   (ii) since March 31, 1999, neither the Company nor the Company Subsidiary
has received any notice or other communication regarding (i) any actual or      
possible violation or breach of, or default under, any Material Company         
Contract, or (ii) any actual or possible termination of any Material Company    
Contract; and                                                                   

    (iii) neither the Company nor the Company Subsidiary has waived any of its
material rights under any Material Company Contract.                            

2.12 No Undisclosed Liabilities. Except as set forth in the Company   
Financial Statements and except for current liabilities incurred in the ordinary
course of business since March 31, 1999, the Company has no accrued, contingent 
or other liabilities of any nature, either matured or unmatured.                

2.13 Compliance with Legal Requirements. Each of the Company and the  
Company Subsidiary is, and has at all times been, in compliance with all        
applicable Legal Requirements, except where the failure to comply with such     
Legal Requirements has not had and will not have a Material Adverse Effect on   
the Company. Neither the Company nor the Company Subsidiary has received any    

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notice or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement;        
provided, however, that this representation shall not apply to the matters      
covered by the representations contained in Sections 2.15, 2.16 and 2.17.       

  2.14 Governmental Authorizations. The Company and the Company Subsidiary
have all Governmental Authorizations necessary to enable the Company and the    
Company Subsidiary to conduct their businesses in the manner in which their     
businesses are currently being conducted, except for Governmental Authorizations
the failure of which to obtain would not have a Material Adverse Effect on the  
Company. Each of the Company and the Company Subsidiary is, and at all times has
been, in compliance with the material terms and requirements of such            
Governmental Authorizations, except for any noncompliance which would not have a
Material Adverse Effect on the Company. Neither the Company nor the Company     
Subsidiary has received any notice or other communication from any Governmental 
Body regarding (a) any actual or possible violation of or failure to comply with
any term or requirement of any Governmental Authorization, or (b) any actual or 
possible revocation, withdrawal, suspension, cancellation, termination or       
modification of any Governmental Authorization.                                 

2.15 Tax Matters.                                                     

        (a) All Material Tax Returns required to be filed by or on behalf of
the Company with any Governmental Body with respect to any transaction occurring
or any taxable period ending on or before the date hereof (the "Company         
Returns") (i) have been filed when due, and (ii) have been accurately and       
completely prepared in compliance with all applicable Legal Requirements. Each  
of the Company and the Company Subsidiary has, within the time (including any   
extensions of applicable due dates) and in the manner prescribed by law, paid   
all Taxes that are due and payable, except Taxes that, individually and in the  
aggregate, are not material. The Company Financial Statements fully accrue all  
actual and contingent liabilities for Taxes with respect to all periods through 
the dates thereof in accordance with generally accepted accounting principles.  

      (b) No claim or Legal Proceeding is pending or has been threatened
against or with respect to the Company or the Company Subsidiary in respect of  
any Tax. There are no unsatisfied liabilities for Taxes (including liabilities  
for interest, additions to tax and penalties thereon and related expenses) with 
respect to any notice of deficiency or similar document received by the Company 
or the Company Subsidiary. There are no liens for Taxes upon any of the assets  
of the Company or the Company Subsidiary, except liens for current Taxes not yet
due and payable.                                                                

2.16 Employee and Labor Matters; Benefit Plans.                       

          (a) Part 2.16(a) of the Company Disclosure Schedule contains a list of
all salaried employees of the Company as of the date of this Agreement whose    
annual salaries are greater than $30,000, and correctly reflects their salaries,
any other compensation payable to them (including compensation payable pursuant 
to bonus, deferred compensation or commission arrangements), their dates of     
employment and their positions. The Company is not a party to any collective    

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bargaining contract or other Contract with a labor union involving any of its   
employees.                                                                      

       (b) Part 2.16(b) of the Company Disclosure Schedule identifies each
salary, bonus, deferred compensation, incentive compensation, stock purchase,   
stock option, severance pay, termination pay, hospitalization, health,          
insurance, supplemental unemployment benefits, profit-sharing, pension or       
retirement plan, program or agreement (individually referred to as a "Company   
Plan" and collectively referred to as the "Company Plans") sponsored,           
maintained, contributed to or required to be contributed to by the Company for  
the benefit of any current or former employee of the Company.                   

        (c) The Company does not maintain, sponsor or contribute to, and, to
the knowledge of the Company, neither the Company has at any time in the past   
maintained, sponsored or contributed to, any employee pension benefit plan (as  
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, 
as amended ("ERISA")), subject to Title IV of ERISA for the benefit of employees
or former employees of the Company (a "Company Defined Benefit Plan").          

   (d) The Company does not maintain, sponsor or contribute to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA, whether or  
not excluded from coverage under specific Titles or Merger Subtitles of ERISA)  
for the benefit of employees or former employees of the Company.                

         (e) With respect to each Company Plan, the Company has made available
to OFPI:                                                                        

               (i) an accurate and complete copy of such Company Plan (including
all amendments thereto);                                                        

         (ii) an accurate and complete copy of the annual report (if
required under ERISA) with respect to such Company Plan for the three most      
recent plan years;                                                              

        (iii) an accurate and complete copy of (A) the most recent
summary plan description, together with each summary of material modifications  
thereto (if required under ERISA) with respect to such Company Plan, and (B)    
each material employee communication relating to such Company Plan;             

              (iv) if such Company Plan is funded through a trust or any third
party funding vehicle, an accurate and complete copy of the trust or other      
funding agreement (including all amendments thereto) and accurate and complete  
copies the most recent financial statements thereof;                            

           (v) accurate and complete copies of all Contracts relating to
such Company Plan, including service provider agreements, insurance contracts,  
minimum premium contracts, stop-loss agreements, investment management          
agreements, subscription and participation agreements and recordkeeping         
agreements; and                                                                 

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   (vi) an accurate and complete copy of the most recent
determination, notification, advisory and/or opinion letter received from the   
Internal Revenue Service with respect to such Company Plan (if such Company Plan
is intended to be qualified under Section 401(a) of the Code).                  

       (f) The Company is not required to be, and, to the Knowledge of the
Company, the Company has never been required to be, treated as a single employer
with any other Person under Section 4001(b)(1) of ERISA or Section 414(b), (c), 
(m) or (o) of the Code. The Company has never been a member of an "affiliated   
service group" within the meaning of Section 414(m) of the Code. To the of the  
Knowledge of the Company, the Company has never made a complete or partial      
withdrawal from a " multiemployer plan" (as defined in Section 3(37) of ERISA)  
resulting in "withdrawal liability" (as defined in Section 4201 of ERISA),      
without regard to subsequent reduction or waiver of such liability under either 
Section 4207 or 4208 of ERISA.                                                  

      (g) The Company has no plan or commitment to create any additional
Company employee benefit plan within the meaning of ERISA, or to modify or      
change any such plan (other than to comply with applicable law).                

          (h) No Company Welfare Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former employee of the  
Company after any such employee's termination of service (other than (i) benefit
coverage mandated by applicable law, including coverage provided pursuant to    
Section 4980B of the Code, (ii) deferred compensation benefits accrued as       
liabilities on the balance sheet as of January 31, 1999, or (iii) benefits the  
full cost of which are borne by current or former employees of the Company (or  
their beneficiaries)).                                                          

      (i) With respect to each of the Company Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the          
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as    
amended ("COBRA") have been complied with in all material respects.             

       (j) Each of the Company Plans has been operated and administered in
all material respects in accordance with applicable Legal Requirements,         
including ERISA and the Code.                                                   

        (k) Each of the Company Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination from the Internal     
Revenue Service, and the Company is not aware of any reason why any such        
determination letter should be revoked.                                         

         (l) Neither the execution, delivery or performance of this Agreement,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement, will result in any bonus payment, golden parachute payment,  
severance payment or other payment to any current or former employee or director
of the Company (whether or not under any Company Plan), or materially increase  
the benefits payable under any Company Plan, or result in any acceleration of   
the time of payment or vesting of any such benefits.                            

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      (m) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment  
practices, employee compensation, wages, bonuses and terms and conditions of    
employment.                                                                     

    2.17 Environmental Matters. Each of the Company and the Company Subsidiary
is and has at all times been in compliance, in all material respects, with all  
applicable Environmental Laws. The Company and the Company Subsidiary possess   
all permits and other Governmental Authorizations required under applicable     
Environmental Laws, and each of the Company and the Company Subsidiary is and   
has at all times been in compliance with the terms and requirements of all such 
Governmental Authorizations, except where the failure to possess such           
Governmental Authorizations or failure to be in compliance would not have a     
Material Adverse Effect on the Company. Neither the Company nor the Company     
Subsidiary has received any notice or other communication (whether from a       
Governmental Body, citizens group, employee or otherwise) that alleges that the 
Company or the Company Subsidiary is not in compliance with any Environmental   
Law. To the Knowledge of the Company, no current or prior owner of any property 
leased or owned by the Company or the Company Subsidiary has received any notice
or other communication (whether from a Governmental Body, citizens group,       
employee or otherwise) that alleges that such current or prior owner or the     
Company is not or was not in compliance with any Environmental Law. (For        
purposes of this Section 2.17 and Section 3.17: (i) "Environmental Law" means   
any federal, state, local or foreign Legal Requirement relating to pollution or 
protection of human health or the environment (including ambient air, surface   
water, ground water, land surface or subsurface strata), including any law or   
regulation relating to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern, or otherwise relating to the manufacture,   
processing, distribution, use, treatment, storage, disposal, transport or       
handling of Materials of Environmental Concern; and (ii) "Materials of          
Environmental Concern" include chemicals, pollutants, contaminants, wastes,     
toxic substances, petroleum and petroleum products and any other substance that 
is now or in the future regulated by any Environmental Law or that is otherwise 
a danger to health, reproduction or the environment.) To the Knowledge of the   
Company, no Materials of Environmental Concern have been released or are located
on or under any property leased or owned by the Company or the Company          
Subsidiary. Neither the Company nor the Company Subsidiary have received any    
notice or communication (whether from a Governmental Body, citizen group,       
employee, or otherwise) regarding a release of, or the existence of, Materials  
of Environmental Concern at, under, or about any property leased or owned by the
Company or the Company Subsidiary.                                              

2.18 Sale of Products; Performance of Services.                       

          (a) To the Company's Knowledge, each product that has been sold by the
Company to any Person:                                                          

           (i) conformed and complied in all respects with the terms and
requirements of any applicable warranty or other Contract and with all          
applicable Legal Requirements; and                                              

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          (ii) was free of any design defects, construction defects or
other defects or deficiencies at the time of sale.                              

All services that have been performed by the Company were performed   
properly and in full conformity with the terms and requirements of all          
applicable warranties and other Contracts and with all applicable Legal         
Requirements.                                                                   

      (b) To the Knowledge of the Company, the Company will not incur or
otherwise become subject to any Liability arising directly or indirectly from   
any product manufactured or sold, or any repair services or other services      
performed by, the Company on or at any time prior to the Closing Date.          

        (c) To the Knowledge of the Company, no product manufactured or sold
by the Company has been the subject of any recall or other similar action; and  
no event has occurred, and no condition or circumstance exists, that might (with
or without notice or lapse of time) directly or indirectly give rise to or serve
as a basis for any such recall or other similar action relating to any such     
product.                                                                        

  (d) Except as set forth in Part 2.18 of the Company Disclosure
Schedule, no customer or other Person has ever asserted or threatened to assert 
any claim against the Company (i) under or based upon any warranty provided by  
or on behalf of the Company, or (ii) under or based upon any other warranty     
relating to any product sold by the Company or any services performed by the    
Company. To the Knowledge of the Company, no event has occurred, and no         
condition or circumstance exists, that might (with or without notice or lapse of
time) directly or indirectly give rise to or serve as a basis for the assertion 
of any such claim.                                                              

    (e) The Company has in place an adequate and appropriate quality
control system that is at least as comprehensive and effective as the quality   
control systems customarily maintained by Company Comparable Entities.          

    2.19 Insurance. The business and properties of the Company are insured for
the benefit of the Company in amounts deemed adequate by the Company's          
management against risks usually insured against by persons operating businesses
similar to those of the Company in the localities where such properties are     
located. The Company has received no notice of cancellation or refusal of       
coverage and copies of all of such insurance policies have been delivered to    
OFPI.                                                                           

  2.20 Related Party Transactions. Except as set forth in Part 2.20 of the
Company Disclosure Schedule, (a) no Related Party has, and no Related Party has 
at any time since December 31, 1995 had, any direct or indirect interest in any 
material asset used in or otherwise relating to the business of the Company or  
the Company Subsidiary in a manner that would be required to be disclosed under 
Item 404 of Regulation S-K promulgated by the SEC; (b) no Related Party is, or  
has at any time since December 31, 1995 been, indebted to the Company in a      
manner that would be required to be disclosed under Item 404 of Regulation S-K  
promulgated by the SEC; (c) since December 31, 1995, no Related Party has       
entered into, or has had any direct or indirect financial interest in, any      
Material Company Contract, transaction or business dealing involving the Company

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or the Company Subsidiary in a manner that would be required to be disclosed    
under Item 404 of Regulation S-K promulgated by the SEC; (d) no Related Party is
competing, or has at any time since December 31, 1995 competed, directly or     
indirectly, with the Company; and (e) no Related Party has any claim or right   
against the Company or the Company Subsidiary (other than rights to receive     
compensation for services performed as an employee of the Company). (For        
purposes of this Section 2.20, each of the following shall be deemed to be a    
"Related Party": (i) each individual who is, or who has at any time since       
December 31, 1995 been, an officer or director of the Company or the Company    
Subsidiary; (ii) each individual who is, or who at any time since December 31,  
1995 been, a member of the immediate family of any of the individuals referred  
to in clause "(i)" above; (iii) any shareholder of the Company or the Company   
Subsidiary; and (iv) any trust or other Entity in which any one of the          
individuals referred to in clauses "(i)," "(ii)" "(iii)" and "(iv)"above holds  
(or in which more than one of such individuals collectively hold), beneficially 
or otherwise, a material voting, proprietary or equity interest.)               

    2.21 Legal Proceedings; Orders. There is no pending Legal Proceeding, and,
to the knowledge of the Company, no Person has threatened to commence any Legal 
Proceeding that: (i) may have a Material Adverse Effect on the Company or the   
Company Subsidiary, or its respective business; or (ii) challenges, or that may 
have the effect of preventing, delaying, making illegal or otherwise interfering
with, the Merger or any of the other transactions contemplated by this          
Agreement. To the Knowledge of the Company, no event has occurred, and no claim,
dispute or other condition or circumstance exists that could reasonably be      
expected to give rise to or serve as a basis for the commencement of any such   
Legal Proceeding. There is no order, writ, injunction, judgment or decree to    
which the Company or the Company Subsidiary, or any of the assets owned or used 
by the Company or the Company Subsidiary, is subject. To the Knowledge of the   
Company, no officer or other employee of the Company is subject to any order,   
writ, injunction, judgment or decree that prohibits such officer or other       
employee from engaging in or continuing any conduct, activity or practice       
relating to the Company's or the Company Subsidiary's business. There is no     
action, suit, proceeding or investigation by the Company or the Company         
Subsidiary currently pending or which the Company intends to initiate.          

   2.22 Authority; Binding Nature of Agreement. The Company has the absolute
and unrestricted right, power and authority to enter into and to perform its    
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary action 
on the part of the Company, its Board of Directors and its shareholders. This   
Agreement constitutes the legal, valid and binding obligation of the Company,   
enforceable against the Company in accordance with its terms, except as         
enforcement thereof may be limited by (i) laws of general application relating  
to bankruptcy, insolvency, moratorium, reorganization or other similar laws,    
both state and federal, affecting the enforcement of creditors' rights or       
remedies in general, and (ii) rules of law governing specific performance,      
injunctive relief and other equitable remedies.                                 

   2.23 Non-Contravention; Consents. Except as set forth in Part 2.23 of the
Company Disclosure Schedule, neither (1) the execution, delivery or performance 
of this Agreement or any of the other agreements referred to in this Agreement, 
nor (2) the consummation of the Merger or any of the other transactions         

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contemplated by this Agreement, will directly or indirectly (with or without    
notice or lapse of time):                                                       

        (a) contravene, conflict with or result in a violation of any of the
provisions of the Company's or the Company Subsidiary's articles of organization
or bylaws;                                                                      

          (b) with respect to the Company or the Company Subsidiary, contravene,
conflict with or result in a violation of, or give any Governmental Body or     
other Person the right to challenge any of the transactions contemplated by this
Agreement or to exercise any remedy or obtain any relief under, any Legal       
Requirement or any order, writ, injunction, judgment or decree to which the     
Company or the Company Subsidiary, or any of the assets owned or used by the    
Company or the Company Subsidiary, is subject;                                  

          (c) with respect to the Company or the Company Subsidiary, contravene,
conflict with or result in a violation of any of the terms or requirements of,  
or give any Governmental Body the right to revoke, withdraw, suspend, cancel,   
terminate or modify, any Governmental Authorization that is held by the Company 
or the Company Subsidiary or that otherwise relates to the Company's business or
to any of the assets owned or used by the Company or the Company Subsidiary;    

        (d) contravene, conflict with or result in a violation or breach of,
or result in a default under, any provision of any Material Company Contract, or
give any Person the right to (i) declare a default or exercise any remedy under 
any Material Company Contract, (ii) accelerate the maturity or performance of   
any Material Company Contract, or (iii) cancel, terminate or modify any Material
Company Contract; or                                                            

 (e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company      
(except for minor liens that will not, in any case or in the aggregate,         
materially detract from the value of the assets subject thereto or would have a 
Material Adverse Effect on the Company).                                        

Except as may be required by the CGCL and state securities or blue sky
laws, and except as set forth in Part 2.23 of the Company Disclosure Schedule,  
the Company is not and will not be required to make any filing with or give any 
notice to, or to obtain any Consent from, any Person in connection with (x) the 
execution, delivery or performance of this Agreement or any of the other        
agreements referred to in this Agreement, or (y) the consummation of the Merger 
or any of the other transactions contemplated by this Agreement.                

  2.24 Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of Common Stock of the Company (the "Requisite Company   
Vote"), is the only vote of the holders of any class or series of Company's     
capital stock necessary to adopt and approve this Agreement, the Merger and the 
transactions contemplated thereby. The Company Shareholders approve this        
Agreement, the Merger and the transactions contemplated thereby.                

   2.25 Company Action. The Company's Board of Directors has (a) unanimously
determined that the Merger is advisable and fair and in the best interests of   

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Company and its shareholders, and (b) unanimously approved this Agreement and   
the Merger in accordance with the applicable provisions of the CGCL.            

2.26 Full Disclosure.                                                 

          (a) To the Company's Knowledge, all documents, contracts, instruments,
certificates, notices, consents, affidavits, letters, telegrams, telexes,       
written statements, schedules (including the Company Disclosure Schedule),      
exhibits (including the Exhibits to this Agreement) and any other papers        
whatsoever (excluding in all cases drafts and interim versions marked as such or
apparent as such on their face) delivered to OFPI by the Company in connection  
with this Agreement and the transactions contemplated thereby, are true and     
complete copies thereof. The representations and warranties of the Company      
contained in this Agreement, as modified by the Company Disclosure Schedule,    
contain no untrue statements of any material fact or omit to state any material 
fact required to be stated therein or necessary to make the statements therein, 
in light of the circumstances under which they were made, not false or          
misleading.                                                                     

          (b) The information supplied by the Company for inclusion in the Joint
Proxy Statement (including the Company Financial Statements) will not, as of the
date of the Joint Proxy Statement or as of the date of the OFPI Shareholders'   
Meeting (as defined in Section 5.5), and in each case, as of the date such      
information is prepared or presented, contain any statement that is inaccurate  
or misleading with respect to any material fact, or (ii) omit to state any      
material fact necessary in order to make such information not false or          
misleading.                                                                     

     2.27 Finder's Fee. Except for Monterey Bay Food Group, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or        
commission in connection with the Merger or any of the other transactions       
contemplated thereby based upon arrangements made by or on behalf of the        
Company.                                                                        

SECTION 3. REPRESENTATIONS AND WARRANTIES OF OFPI                     

  OFPI represents and warrants to the Company that, except as set forth in
the disclosure schedule prepared by OFPI in accordance with the requirements of 
Section 10.13 and that has been delivered by OFPI to the Company on the date of 
this Agreement (the "OFPI Disclosure Schedule"):                                

3.1 Due Organization, Etc.                                            

          (a) OFPI is a corporation duly organized, validly existing and in good
standing under the laws of California, and has full corporate power and         
authority: (i) to conduct its business in the manner in which its business is   
currently being conducted; (ii) to own and use its assets in the manner in which
its assets are currently owned and used; and (iii) to perform its obligations   
under all Contracts by which it is bound. OFPI has no subsidiaries.             

      (b) OFPI maintains facilities or employees in each state listed in
Part 3.1(b) of the OFPI Disclosure Schedule. OFPI is duly qualified to do       
business and is in good standing in each jurisdiction in which the failure to be

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so qualified would have a Material Adverse Effect on OFPI or on the ability of  
OFPI to consummate the transactions contemplated hereby.                        

  3.2 Articles of Incorporation and Bylaws; Records. OFPI has delivered or
made available to Company accurate and complete copies of: (1) OFPI's articles  
of incorporation and bylaws as currently in effect, including all amendments    
thereto; (2) the stock records of OFPI; and (3) the minutes and other records of
the meetings and other proceedings (including any actions taken by written      
consent or otherwise without a meeting) of the shareholders of OFPI, the Board  
of Directors of OFPI and all committees of the Board of Directors of OFPI. OFPI 
is not in violation of any of the provisions of its articles of incorporation or
bylaws. The books of account, stock records, minute books and other records of  
OFPI are accurate and complete in all material respects, and have been          
maintained in accordance with prudent business practices.                       

    3.3 Capitalization, Etc. The authorized capital stock of OFPI consists of:
(i) 20,000,000 shares of Common Stock, no par value per share ("OFPI Common     
Stock"), of which 7,559,002 shares have been issued and are outstanding as of   
the date hereof; and (ii) 5,000,000 shares of preferred stock, no par value per 
share, none of which are outstanding. All of the outstanding shares of OFPI     
capital stock have been duly authorized and validly issued, and are fully paid  
and non-assessable, and none of such shares is subject to any repurchase option 
or restriction on transfer other than restrictions imposed by federal and state 
securities laws. All outstanding shares of OFPI capital stock have been issued  
in compliance with all applicable securities laws and other applicable Legal    
Requirements. Part 3.3 of the OFPI Disclosure Schedule sets forth, as of the    
date hereof, (i) the names of each holder of 5% or more of the outstanding      
voting stock of OFPI together with the number of shares held by each such       
holder, and (ii) all outstanding subscriptions, options, calls, warrants or     
other rights (whether or not currently exercisable) to acquire any shares of the
capital stock or other securities of OFPI. The Shares, when issued by OFPI to   
the Company's shareholders will be duly authorized, validly issued, fully paid  
and non-assessable, will be issued in compliance with applicable federal and    
state securities laws and will be free and clear of all Encumbrances as a result
of any actions by OFPI. OFPI has never repurchased, redeemed or otherwise       
reacquired any shares of its capital stock or other securities. Other than the  
irrevocable proxies set forth in Part 3.3 of the OFPI Disclosure Schedule, there
are no preemptive or similar rights with respect to the OFPI's capital stock.   
There is no OFPI Contract (or, to OFPI's knowledge, any other agreement or      
arrangement to which OFPI is not a party) relating to the voting or registration
of, or restricting any Person from purchasing, selling, pledging or otherwise   
disposing of (or granting any option or similar right with respect to), any     
shares of OFPI Common Stock. There is no shareholder rights plan (or similar    
plan commonly referred to as a "poison pill") or Contract under which OFPI is or
may become obligated to sell or otherwise issue any shares of its capital stock 
or any other securities.                                                        

3.4 SEC Filings; Financial Statements                                 

         (a) OFPI has delivered to the Company accurate and complete copies of
each report, schedule, registration statement and definitive proxy statement    
filed by OFPI with the SEC since August 8, 1997 (the "OFPI SEC Documents"),     
which are all the reports and documents required to be filed by OFPI with the   
SEC since August 8, 1997. Each of the OFPI SEC Documents was timely filed by the

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OFPI in accordance with the rules and regulations of the SEC and the NASD. As of
the time it was filed with the SEC (or, if amended or superseded by a filing    
prior to the date of this Agreement, then on the date of such filing): (i) each 
of the OFPI SEC Documents complied in all material respects with the applicable 
requirements of the Securities Act or the Exchange Act (as the case may be); and
(ii) none of the OFPI SEC Documents contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or       
necessary in order to make the statements therein, in the light of the          
circumstances under which they were made, not misleading.                       

       (b) The consolidated financial statements (including, in each case,
any notes related thereto) contained in the OFPI SEC Documents: (i) complied as 
to form in all material respects with the published rules and regulations of the
SEC applicable thereto; (ii) were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods      
covered (except as may be indicated in the notes to such financial statements   
and, in the case of unaudited statements, as permitted by Form 10-Q of the SEC, 
and except that unaudited financial statements may not contain footnotes and are
subject to year-end audit adjustments); and (iii) fairly present the            
consolidated financial position of OFPI as of the respective dates thereof and  
the consolidated results of operations of OFPI for the periods covered thereby. 

         (c) OFPI has furnished to the Company a complete and accurate copy of
any amendments, supplements or modifications that have not yet been filed with  
the SEC to agreements, documents or other instruments that have been previously 
filed by OFPI with the SEC pursuant to the Securities Act or the Exchange Act,  
if any.                                                                         

      (d) OFPI has furnished the Company the unaudited balance sheets of
OFPI as of January 31, 1999 and the related unaudited statements of income of   
OFPI for the seven months then ended. Such financial statements fairly present  
the financial position of OFPI as of the respective dates thereof and the       
results of operations and cash flows of OFPI for the periods covered thereby.   
Such financial statements have been prepared in accordance with generally       
accepted accounting principles applied on a consistent basis throughout the     
periods covered (except that they do not contain footnotes and are subject to   
normal and recurring year-end adjustments, which will not, individually or in   
the aggregate be material in magnitude). The financial statements referred to in
subsection (b) and this subsection (d) are hereinafter referred to as the "OFPI 
Financial Statements."                                                          

    3.5 Absence of Changes. Except as described in Part 3.5 of OFPI Disclosure
Schedule, since January 31, 1999 through the date of this Agreement:            

       (a) there has not been any material adverse change in the business,
condition, assets, liabilities, operations or financial performance of OFPI,    
and, to the knowledge of OFPI, no event has occurred that could reasonably be   
expected to have a Material Adverse Effect on OFPI taken as a whole;            

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        (b) there has not been any loss, damage or destruction to any of the
assets of OFPI (whether or not covered by insurance) that could reasonably be   
expected to have a Material Adverse Effect on OFPI;                             

       (c) OFPI has not declared, accrued, set aside or paid any dividend,
stock split, combination or reclassification or made any other distribution in  
respect of any shares of capital stock nor has repurchased, redeemed or         
otherwise reacquired any shares of capital stock or other securities;           

       (d) OFPI has not sold, issued or authorized the issuance of (i) any
capital stock or other security (except for OFPI Common Stock issued upon the   
exercise of outstanding OFPI Options or OFPI Warrants described in the OFPI     
Disclosure Schedule), (ii) any option, call, warrant or right to acquire, or    
otherwise relating to, any capital stock or any other security (except for OFPI 
Options and OFPI Warrants described in the OFPI Disclosure Schedule), or (iii)  
any instrument convertible into or exchangeable for any capital stock or other  
security;                                                                       

      (e) there has been no amendment to the articles of organization or
bylaws of OFPI, and OFPI has not effected or been a party to any OFPI           
Acquisition Transaction, recapitalization, reclassification of shares, stock    
split, reverse stock split or similar transaction;                              

  (f) OFPI has not amended or waived any of its rights under, or
permitted the acceleration of vesting under (i) any provision of any agreement  
evidencing any outstanding OFPI Option or OFPI Warrant, or (ii) any restricted  
stock purchase agreement;                                                       

          (g) OFPI has not formed any subsidiary or acquired any equity interest
or other interest in any other Entity;                                          

          (h) OFPI has not made any capital expenditure which, when added to all
other capital expenditures made since January 31, 1999, exceeds $25,000 in the  
aggregate;                                                                      

    (i) OFPI has not (i) entered into any Material OFPI Contract (as
defined in Section 3.10(a)), or (ii) amended or prematurely terminated, or      
waived any material right or remedy under, any Material OFPI Contract to which  
it is or was a party or under which it has or had any material rights or        
obligations;                                                                    

        (j) OFPI has not (i) acquired, leased or licensed any right or other
asset from any other Person, (ii) sold or otherwise disposed of, or leased or   
licensed, any right or other asset to any other Person, or (iii) waived or      
relinquished any right, except for purchases of inventory and sales of products 
in the ordinary course and except for immaterial rights or other immaterial     
assets acquired, leased, licensed or disposed of in the ordinary course of      
business and consistent with past practices;                                    

     (k) OFPI has not written off as uncollectible, or established any
extraordinary reserve with respect to, any account receivable or other          
indebtedness in excess of $5,000 individually or $25,000 in the aggregate;      

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      (l) OFPI has not made any pledge of any of its assets or otherwise
permitted any of its assets to become subject to any Encumbrance, except for    
pledges of assets valued at $25,000 or less, individually or in the aggregate,  
made in the ordinary course of business and consistent with past practices;     

      (m) OFPI has not (i) lent money to any Person, or (ii) incurred or
guaranteed any indebtedness for borrowed money;                                 

     (n) OFPI has not (i) established, adopted or amended any Employee
Benefit Plan, (ii) paid any bonus or made any profit-sharing or similar payment 
to, or increased the amount of the wages, salary, commissions, fringe benefits  
or other compensation or remuneration payable to, any of its directors, officers
or employees, (iii) hired any new employee, in either case except in the        
ordinary course of business and consistent with past practices or (iv) entered  
into any severance or employment agreement with any Person;                     

(o) OFPI has not changed any of its methods of accounting or
accounting practices in any material respect;                                   

(p) OFPI has not made any Tax election;                     

(q) OFPI has not commenced or settled any Legal Proceeding; 

     (r) neither OFPI nor any OFPI Subsidiary has not entered into any
material transaction or taken any other material action outside the ordinary    
course of business or inconsistent with its past practices;                     

   (s) OFPI has not made any material write-down of inventory; and

   (t) OFPI has not agreed or committed to take any of the actions
referred to in clauses "(c)" through "(s)" above.                               

3.6 Title to Assets.                                                  

        (a) OFPI owns, and has good and valid title to, all assets purported
to be owned by it, including all of the assets reflected in the OFPI SEC        
Documents and all other assets reflected in such entity's books and records as  
being owned by OFPI. Except as set forth in Part 3.6(a) of the OFPI Disclosure  
Schedule, all of said assets are owned by OFPI and each OFPI Subsidiary free and
clear of any Encumbrances, except for (i) any lien for current taxes not yet due
and payable and (ii) minor liens that have arisen in the ordinary course of     
business and that would not (in any case or in the aggregate) have a Material   
Adverse Effect on OFPI.                                                         

         (b) Part 3.6(b) of the OFPI Disclosure Schedule identifies all assets
that are being leased or licensed to OFPI that involve obligations in excess of 
$25,000 on an individual basis, that are not otherwise disclosed in the OFPI SEC
Documents.                                                                      

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3.7 Accounts Receivable; Loans and Advances.                        

         (a) All accounts receivable of OFPI and each OFPI Subsidiary that are
reflected in OFPI SEC Documents or in the accounting records of OFPI as of the  
date hereof (collectively, the "OFPI Accounts Receivable") represent valid      
obligations arising from sales actually made or services actually performed in  
the ordinary course of business. The OFPI Accounts Receivable are current and   
collectible net of any respective reserves shown in the OFPI SEC Documents as of
the date hereof (which reserves are adequate and calculated consistent with past
practice). There is no contest, claim, or right of set-off, other than returns  
in the ordinary course of business, under any Contract with any obligor of any  
OFPI Accounts Receivable relating to the amount or validity of such OFPI        
Accounts Receivable.                                                            

        (b) Part 3.7(b) of OFPI Disclosure Schedule contains an accurate and
complete list of all loans and advances made by OFPI (and pursuant to which     
amounts are outstanding as of the date of this Agreement) to any employee,      
director, consultant or independent contractor of OFPI or any OFPI Subsidiary,  
other than routine travel advances made to employees in the ordinary course of  
business.                                                                       

3.8 Inventory. Part 3.8 of the OFPI Disclosure Schedule provides an   
accurate and complete breakdown of all inventory (including raw materials, work 
in process and finished goods) of OFPI as of January 31, 1999. All of the       
existing inventory of OFPI (including all inventory that is reflected on the    
unaudited balance sheet referenced in Section 3.4(ii) and that has not been     
disposed of by OFPI since January 31, 1999):                                    

       (a) is of such quality and quantity as to be usable and saleable by
OFPI in the ordinary course of business and consistent with the past practices  
of OFPI, as the case may be;                                                    

      (b) has been priced at the lower of cost or market value using the
"first-in, first-out" method; and                                               

(c) is free of any defect or deficiency.                    

 The inventory levels maintained by OFPI are adequate for the conduct of
OFPI's operations in the ordinary course of business and consistent with past   
practices.                                                                      

3.9 Equipment; Leasehold.                                             

        (a) The real property leased by, and other tangible assets leased or
owned by OFPI are adequate for the uses to which they are being put, are in good
condition and repair (ordinary wear and tear excepted) and are adequate for the 
conduct of such entity's business in the manner in which such business is now   
being conducted.                                                                

       (b) OFPI does not own any real property or any material interest in
real property, except as described in the OFPI SEC Documents and set forth on   
Part 3.9(b) of the OFPI Disclosure Schedule.                                    

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3.10 Proprietary Assets.                                              

         (a) Except as set forth in Part 3.10 of the OFPI Disclosure Schedule,
there is no Proprietary Asset that is owned by or licensed to OFPI or that is   
otherwise used or useful in connection with the business of OFPI. The OFPI      
Proprietary Assets identified in Part 3.10 of the OFPI Disclosure Schedule      
constitute all of the Proprietary Assets necessary to enable OFPI to conduct its
business in the manner in which its business is currently being conducted and in
the manner in which its business is proposed to be conducted.                   

      (b) To the Knowledge of OFPI, OFPI has good and valid title to all
OFPI Proprietary Assets free and clear of all Encumbrances, and has a valid     
right to use all OFPI Proprietary Assets. OFPI is not obligated to make any     
payment to any Person for the use of any OFPI Proprietary Asset. To the         
Knowledge of OFPI, OFPI is free to use, modify, copy, distribute, sell, license 
or otherwise exploit each of the OFPI Proprietary Assets on an exclusive basis  
(except for any Proprietary Asset that is licensed to OFPI on a non-exclusive   
basis under any third party software license generally available to the public  
at a cost o less than $2,500).                                                  

       (c) OFPI has taken reasonable measures and precautions necessary to
protect and maintain the confidentiality and secrecy of all OFPI Proprietary    
Assets (except OFPI Proprietary Assets whose value would be unimpaired by public
disclosure) and otherwise to maintain and protect the value of all OFPI         
Proprietary Assets. OFPI has not disclosed or delivered or permitted to be      
disclosed or delivered to any Person, and no Person (other than OFPI) has access
to or has any rights with respect to any OFPI Proprietary Asset, in either case 
except pursuant to a valid non-disclosure agreement.                            

     (d) To the Knowledge of OFPI, none of the OFPI Proprietary Assets
infringes or conflicts with any Proprietary Asset owned or used by any other    
Person. To the Knowledge of OFPI, OFPI is not infringing, misappropriating or   
making any unlawful use of, and OFPI has not at any time infringed,             
misappropriated or made any unlawful use of, or received any notice or other    
communication of any actual, alleged, possible or potential infringement,       
misappropriation or unlawful use of, any Proprietary Asset owned or used by any 
other Person. To the Knowledge of OFPI, no other Person is infringing,          
misappropriating or making any unlawful use of, and no Proprietary Asset owned  
or used by any other Person infringes or conflicts with, any OFPI Proprietary   
Asset.                                                                          

     (e) OFPI Proprietary Assets constitute all the Proprietary Assets
necessary to enable OFPI to conduct its business in the manner in which such    
business has been conducted. OFPI has not licensed any of the OFPI Proprietary  
Assets to any Person on an exclusive basis, and OFPI has not entered into any   
covenant not to compete or Contract limiting its ability to exploit fully any of
its Proprietary Assets or to transact business in any market or geographical    
area or with any Person.                                                        

         (f) No shareholder, officer or director of OFPI has title to any OFPI
Proprietary Asset which would be necessary to enable OFPI to conduct its        
business in the manner in which such business is currently being conducted.     

3.11 Contracts.                                                       

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        (a) Part 3.11(a) (and Part 3.9(b) regarding leases of real property)
of the OFPI Disclosure Schedule identifies each OFPI Contract that constitutes a
"Material OFPI Contract." For purposes of this Agreement, a "Material OFPI      
Contract" shall be deemed to be any OFPI Contract:                              

     (i) relating to the employment or engagement of, or the
performance of services by, any employee, consultant or independent contractor  
which involves a potential commitment of OFPI in excess of $25,000 per year,    
including any OFPI Contract involving severance payments or acceleration        
benefits upon a OFPI Acquisition Transaction;                                   

           (ii) relating to the acquisition, transfer, use, development,
sharing or license of any OFPI Proprietary Asset (except in the ordinary course 
of business and except for any OFPI Proprietary Asset that is licensed to OFPI  
under any third party software license agreement generally available to the     
public at a cost of less than $25,000);                                         

        (iii) imposing any material restriction on OFPI's right or
ability (A) to compete with any other Person, (B) to acquire any product or     
other asset or any services from any other Person, to sell any product or other 
asset to or perform any services for any other Person or to transact business or
deal in any other manner with any other Person, or (C) to develop or distribute 
any OFPI Proprietary Asset;                                                     

              (iv) creating or involving any agency relationship, distribution
arrangement or franchise relationship involving payments to or from OFPI or     
obligations in excess of $25,000 per year;                                      

          (v) relating to the acquisition, issuance or transfer of any
securities of OFPI;                                                             

               (vi) creating or relating to the creation of any Encumbrance with
respect to any asset owned or used by OFPI having a value in excess of $25,000; 

            (vii) involving or incorporating any guaranty, any pledge, any
performance or completion bond, any indemnity, any right of contribution or any 
surety arrangement in excess of $25,000 per year;                               

             (viii) creating or relating to any partnership or joint venture
or any material sharing of revenues, profits, losses, costs or liabilities;     

           (ix) relating to the purchase or sale of any product or other
asset by or to, or the performance of any services by or for, any Related Party 
(as defined in Section 3.20);                                                   

       (x) entered into outside the ordinary course of business;

              (xi) that may not be terminated by OFPI (without penalty) within
120 days after the delivery of a termination notice by OFPI and which involves  
payments or commitments of $5,000 or more;                                      

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             (xii) contemplating or involving (A) the payment or delivery of
cash or other consideration in an amount or having a value in excess of $25,000 
in the aggregate, or (B) the performance of services having a value in excess of
$25,000 in the aggregate); and                                                  

(xiii) which is a lease of real property.         

         (b) OFPI has delivered to the Company accurate and complete copies of
all OFPI Material Contracts identified in Part 3.11(a) of OFPI Disclosure       
Schedule, including all amendments thereto. Each Material OFPI Contract         
identified in Part 3.11(a) of the OFPI Disclosure Schedule is valid and in full 
force and effect, and is enforceable by OFPI in accordance with its terms,      
subject to (i) laws of general application relating to bankruptcy, insolvency   
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.                                 

            (i) neither OFPI nor, to OFPI's Knowledge, any other party has
materially violated or breached, or committed any material default under, any   
OFPI Material Contract;                                                         

          (ii) to the Knowledge of OFPI, no event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, (A) result in a violation or breach of
any of the provisions of any OFPI Material Contract, (B) give any Person the    
right to declare a default or exercise any remedy under any OFPI Material       
Contract, (C) give any Person the right to accelerate the maturity or           
performance of any OFPI Material Contract, or (D) give any Person the right to  
cancel, terminate or modify any OFPI Material Contract;                         

               (iii) since January 31, 1999, OFPI has not received any notice or
other communication regarding (i) any actual or possible violation or breach of,
or default under, any OFPI Material Contract, or (ii) any actual or possible    
termination of any OFPI Material Contract; and                                  

           (iv) OFPI has not waived any of its material rights under any
OFPI Material Contract.                                                         

3.12 No Undisclosed Liabilities. Except as set forth in the OFPI SEC  
Documents and except for current liabilities incurred in the ordinary course of 
business since January 31, 1999, OFPI has not accrued, contingent or other      
liabilities of any nature, either matured or unmatured.                         

3.13 Compliance with Legal Requirements. OFPI is, and has at all times
been, in compliance with all applicable Legal Requirements, except where the    
failure to comply with such Legal Requirements has not had and will not have a  
Material Adverse Effect on OFPI taken as a whole. OFPI has not received any     
notice or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement;        
provided, however, that this representation shall not apply to the matters      
covered by the representations contained in Sections 3.15, 3.16 and 3.17.       

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    3.14 Governmental Authorizations. OFPI has all Governmental Authorizations
necessary to enable OFPI to conduct its business in the manner in which its     
business is currently being conducted, except for Governmental Authorizations   
the failure of which to obtain would not have a Material Adverse Effect on OFPI.
OFPI is, and at all times has been, in compliance with the material terms and   
requirements of such Governmental Authorizations, except for any noncompliance  
which would not have a Material Adverse Effect on OFPI. OFPI has not received   
any notice or other communication from any Governmental Body regarding (a) any  
actual or possible violation of or failure to comply with any term or           
requirement of any Governmental Authorization, or (b) any actual or possible    
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental Authorization.                                                 

3.15 Tax Matters.                                                     

        (a) All Material Tax Returns required to be filed by or on behalf of
OFPI with any Governmental Body with respect to any transaction occurring or any
taxable period ending on or before the date hereof (the "OFPI Returns") (i) have
been filed when due, and (ii) have been accurately and completely prepared in   
compliance with all applicable Legal Requirements. OFPI has, within the time    
(including any extensions of applicable due dates) and in the manner prescribed 
by law, paid all Taxes that are due and payable, except Taxes that, individually
and in the aggregate, are not material. The consolidated financial statements of
OFPI contained in the OFPI SEC Documents fully accrue all actual and contingent 
liabilities for Taxes with respect to all periods through the dates thereof in  
accordance with generally accepted accounting principles.                       

      (b) No claim or Legal Proceeding is pending or has been threatened
against or with respect to OFPI in respect of any Tax. There are no unsatisfied 
liabilities for Taxes (including liabilities for interest, additions to tax and 
penalties thereon and related expenses) with respect to any notice of deficiency
or similar document received by OFPI. There are no liens for Taxes upon any of  
the assets of OFPI, except liens for current Taxes not yet due and payable.     

3.16 Employee and Labor Matters; Benefit Plans.                       

       (a) Part 3.16(a) of the OFPI Disclosure Schedule contains a list of
all salaried employees of OFPI as of the date of this Agreement whose annual    
salaries are greater than $30,000, and correctly reflects their salaries, any   
other compensation payable to them (including compensation payable pursuant to  
bonus, deferred compensation or commission arrangements), their dates of        
employment and their positions. OFPI is not a party to any collective bargaining
contract or other Contract with a labor union involving any of its employees.   

     (b) Part 3.16(b) of the OFPI Disclosure Documents identifies each
salary, bonus, deferred compensation, incentive compensation, stock purchase,   
stock option, severance pay, termination pay, hospitalization, health,          
insurance, supplemental unemployment benefits, profit-sharing, pension or       
retirement plan, program or agreement (individually referred to as a "OFPI Plan"
and collectively referred to as the "OFPI Plans") sponsored, maintained,        
contributed to or required to be contributed to by OFPI for the benefit of any  
current or former employee of OFPI.                                             

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     (c) OFPI does not maintain, sponsor or contribute to, and, to the
Knowledge of OFPI, OFPI has not at any time in the past maintained, sponsored or
contributed to, any employee pension benefit plan (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA")),     
subject to Title IV of ERISA for the benefit of employees or former employees of
OFPI (a "OFPI Defined Benefit Plan").                                           

     (d) OFPI does not maintain, sponsor or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA, whether or not       
excluded from coverage under specific Titles or Merger Subtitles of ERISA) for  
the benefit of employees or former employees of OFPI.                           

      (e) With respect to each OFPI Plan, OFPI has made available to the
Company:                                                                        

            (i) an accurate and complete copy of such OFPI Plan (including
all amendments thereto);                                                        

         (ii) an accurate and complete copy of the annual report (if
required under ERISA) with respect to such OFPI Plan for the three (3) most     
recent plan years;                                                              

        (iii) an accurate and complete copy of (A) the most recent
summary plan description, together with each summary of material modifications  
thereto (if required under ERISA) with respect to such OFPI Plan, and (B) each  
material employee communication relating to such OFPI Plan;                     

           (iv) if such OFPI Plan is funded through a trust or any third
party funding vehicle, an accurate and complete copy of the trust or other      
funding agreement (including all amendments thereto) and accurate and complete  
copies the most recent financial statements thereof;                            

           (v) accurate and complete copies of all Contracts relating to
such OFPI Plan, including service provider agreements, insurance contracts,     
minimum premium contracts, stop-loss agreements, investment management          
agreements, subscription and participation agreements and recordkeeping         
agreements; and                                                                 

   (vi) an accurate and complete copy of the most recent
determination, notification, advisory and/or opinion letter received from the   
Internal Revenue Service with respect to such OFPI Plan (if such OFPI Plan is   
intended to be qualified under Section 401(a) of the Code).                     

       (f) OFPI is not required to be, and, to the Knowledge of OFPI, OFPI
has never been required to be, treated as a single employer with any other      
Person under Section 4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of  
the Code. OFPI has never been a member of an "affiliated service group" within  
the meaning of Section 414(m) of the Code. To the Knowledge of OFPI, OFPI has   
never made a complete or partial withdrawal from a "multiemployer plan" (as     
defined in Section 3(37) of ERISA) resulting in "withdrawal liability" (as      

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defined in Section 4201 of ERISA), without regard to subsequent reduction or    
waiver of such liability under either Section 4207 or 4208 of ERISA.            

        (g) OFPI has no any plan or commitment to create any additional OFPI
employee benefit plan within the meaning of ERISA, or to modify or change any   
such plan (other than to comply with applicable law).                           

       (h) No OFPI Welfare Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former employee of OFPI 
after any such employee's termination of service (other than (i) benefit        
coverage mandated by applicable law, including coverage provided pursuant to    
Section 4980B of the Code, (ii) deferred compensation benefits accrued as       
liabilities on the consolidated financial statements included in the OFPI SEC   
Documents, and (iii) benefits the full cost of which are borne by current or    
former employees of OFPI (or their beneficiaries)).                             

       (i) With respect to each of OFPI Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the          
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as    
amended ("COBRA") have been complied with in all material respects.             

        (j) Each of the OFPI Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including   
ERISA and the Code.                                                             

     (k) Each of the OFPI Plans intended to be qualified under Section
401(a) of the Code has received a favorable determination from the Internal     
Revenue Service, and OFPI is not aware of any reason why any such determination 
letter should be revoked.                                                       

         (l) Neither the execution, delivery or performance of this Agreement,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement, will result in any bonus payment, golden parachute payment,  
severance payment or other payment to any current or former employee or director
of OFPI (whether or not under any OFPI Plan), or materially increase the        
benefits payable under any OFPI Plan, or result in any acceleration of the time 
of payment or vesting of any such benefits.                                     

          (m) OFPI is in compliance in all material respects with all applicable
Legal Requirements and Contracts relating to employment, employment practices,  
employee compensation, wages, bonuses and terms and conditions of employment.   

3.17 Environmental Matters. OFPI is and has at all times been in      
compliance, in all material respects, with all applicable Environmental Laws.   
OFPI possesses all permits and other Governmental Authorizations required under 
applicable Environmental Laws, and OFPI is and has at all times been in         
compliance with the terms and requirements of all such Governmental             
Authorizations except where the failure to possess such Governmental            
Authorizations or failure to be in compliance would not have a Material Adverse 
Effect on OFPI. OFPI has not received any notice or other communication (whether
from a Governmental Body, citizens group, employee or otherwise) that alleges   
that OFPI is not in compliance with any Environmental Law. To the Knowledge of  

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OFPI, no current or prior owner of any property leased or owned by OFPI has     
received any notice or other communication (whether from a Governmental Body,   
citizens group, employee or otherwise) that alleges that such current or prior  
owner or OFPI is not or was not in compliance with any Environmental Law. To the
Knowledge of OFPI, no Materials of Environmental Concern have been released or  
are located on or under any property leased or owned by OFPI. OFPI has not      
received any notice or other communication (whether from a Governmental Body,   
citizens group, employee, or otherwise) regarding a release of, or the existence
of, Materials of Environmental Concern at, under, or about any property leased  
or owned by OFPI.                                                               

3.18 Sale of Products; Performance of Services.                       

       (a) To OFPI's Knowledge, each product that has been sold by OFPI to
any Person:                                                                     

           (i) conformed and complied in all respects with the terms and
requirements of any applicable warranty or other Contract and with all          
applicable Legal Requirements; and                                              

          (ii) was free of any design defects, construction defects or
other defects or deficiencies at the time of sale.                              

    (b) To OFPI's Knowledge, OFPI will not incur or otherwise become
subject to any Liability arising directly or indirectly from any product        
manufactured or sold, or any repair services or other services performed by,    
OFPI on or at any time prior to the Closing Date.                               

        (c) To OFPI's Knowledge, no product manufactured or sold by OFPI has
been the subject of any recall or other similar action; and no event has        
occurred, and no condition or circumstance exists, that might (with or without  
notice or lapse of time) directly or indirectly give rise to or serve as a basis
for any such recall or other similar action relating to any such product.       

         (d) Except as set forth in Part 3.18 of the OFPI Disclosure Schedule,
no customer or other Person has ever asserted or threatened to assert any claim 
against OFPI (i) under or based upon any warranty provided by or on behalf of   
OFPI, or (ii) under or based upon any other warranty relating to any product    
sold by OFPI or any services performed by OFPI. To the Knowledge of OFPI, no    
event has occurred, and no condition or circumstance exists, that might (with or
without notice or lapse of time) directly or indirectly give rise to or serve as
a basis for the assertion of any such claim.                                    

     (e) OFPI has in place an adequate and appropriate quality control
system that is at least as comprehensive and effective as the quality control   
systems customarily maintained by OFPI Comparable Entities.                     

 3.19 Insurance. The business and properties of OFPI are insured for the
benefit of OFPI in amounts deemed adequate by OFPI's management against risks   
usually insured against by persons operating businesses similar to those of OFPI

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in the localities where such properties are located. OFPI has received no notice
of cancellation or refusal of coverage and copies of all of such insurance      
policies have been delivered to the Company.                                    

3.20 Related Party Transactions. Except as set forth in the OFPI SEC  
Documents: (a) no Related Party has, and no Related Party has at any time since 
June 30, 1995 had, any direct or indirect interest in any material asset used in
or otherwise relating to the business of OFPI; (b) no Related Party is, or has  
at any time since June 30, 1995 been, indebted to OFPI; (c) since June 30, 1995,
no Related Party has entered into, or has had any direct or indirect financial  
interest in, any Material OFPI Contract, transaction or business dealing        
involving OFPI; (d) no Related Party is competing, or has at any time since June
30, 1995 competed, directly or indirectly, with OFPI; and (e) no Related Party  
has any claim or right against OFPI (other than rights to receive compensation  
for services performed as an employee of OFPI). (For purposes of this Section   
3.20, each of the following shall be deemed to be a "Related Party": (i) each   
individual who is, or who has at any time since June 30, 1995 been, an officer  
or director of OFPI; (ii) each individual who is, or who at any time since June 
30, 1995 been, a member of the immediate family of any of the individuals       
referred to in clause "(i)" above; (iii) any 5% shareholder of the OFPI; and    
(iv) any trust or other Entity (other than OFPI) in which any one of the        
individuals referred to in clauses "(i)," "(ii)" and "(iii)" above holds (or in 
which more than one of such individuals collectively hold), beneficially or     
otherwise, a material voting, proprietary or equity interest.)                  

    3.21 Legal Proceedings; Orders. There is no pending Legal Proceeding, and,
to the Knowledge of OFPI, no Person has threatened to commence any Legal        
Proceeding that: (i) may have a Material Adverse Effect on OFPI, or its         
business; or (ii) challenges, or that may have the effect of preventing,        
delaying, making illegal or otherwise interfering with, the Merger or any of the
other transactions contemplated by this Agreement. To the Knowledge of OFPI, no 
event has occurred, and no claim, dispute or other condition or circumstance    
exists, that could reasonably be expected to give rise to or serve as a basis   
for the commencement of any such Legal Proceeding. There is no order, writ,     
injunction, judgment or decree to which OFPI, or any of the assets owned or used
by OFPI, is subject. To the Knowledge of OFPI, no officer or other employee of  
OFPI is subject to any order, writ, injunction, judgment or decree that         
prohibits such officer or other employee from engaging in or continuing any     
conduct, activity or practice relating to OFPI's business. There is no action,  
suit, proceeding or investigation by OFPI currently pending or which OFPI       
intends to initiate.                                                            

3.22 Authority; Binding Nature of Agreement. OFPI has the absolute and
unrestricted right, power and authority to perform its obligations under this   
Agreement; the execution, delivery and performance by OFPI of this Agreement    
have been duly authorized by all necessary action on the part of OFPI and its   
Board of Directors. This Agreement constitutes the legal, valid and binding     
obligation of OFPI, enforceable against OFPI in accordance with its terms,      
except as enforcement thereof may be limited by (i) laws of general application 
relating to bankruptcy, insolvency, moratorium, reorganization or other similar 
laws, both state and federal, affecting the enforcement of creditors' rights or 
remedies in general, and (ii) rules of law governing specific performance,      
injunctive relief and other equitable remedies.                                 

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   3.23 Non-Contravention; Consents. Except as set forth in Part 3.23 of the
OFPI Disclosure Schedule, neither (1) the execution, delivery or performance of 
this Agreement or any of the other agreements referred to in this Agreement, nor
(2) the consummation of the Merger or any of the other transactions contemplated
by this Agreement, will directly or indirectly (with or without notice or lapse 
of time):                                                                       

        (a) contravene, conflict with or result in a violation of any of the
provisions of OFPI's articles of organization, certificate of incorporation or  
bylaws;                                                                         

      (b) with respect to OFPI, contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to        
challenge any of the transactions contemplated by this Agreement or to exercise 
any remedy or obtain any relief under, any Legal Requirement or any order, writ,
injunction, judgment or decree to which OFPI, or any of the assets owned or used
by OFPI, is subject;                                                            

      (c) with respect to OFPI, contravene, conflict with or result in a
violation of any of the terms or requirements of, or give any Governmental Body 
the right to revoke, withdraw, any Governmental Authorization that is held by   
OFPI or that otherwise relates to OFPI's business or to any of the assets owned 
or used by OFPI;                                                                

        (d) contravene, conflict with or result in a violation of breach of,
or result in a default under, any provision of any Material OFPI Contract, or   
give any Person the right to (i) declare a default or exercise any remedy under 
any Material OFPI Contract, (ii) accelerate the maturity or performance of any  
Material OFPI Contract, or (iii) cancel, terminate or modify any Material OFPI  
Contract; or                                                                    

 (e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by OFPI (except for 
minor liens that will not, in any case or in the aggregate, materially detract  
from the value of the assets subject thereto or would have a Material Adverse   
Effect on OFPI).                                                                

  Except as may be required by the Securities Act, the Exchange Act, state
securities or "blue sky" laws, the CGCL, and the NASD Bylaws (as they relate to 
the Joint Proxy Statement), OFPI is not nor will be required to make any filing 
with or give any notice to, or to obtain any Consent from, any Person in        
connection with (x) the execution, delivery or performance of this Agreement or 
any other agreement referred to in this Agreement, or (y) or the consummation of
the Merger.                                                                     

 3.24 Vote Required. The affirmative vote of a majority of the shares of
OFPI Common Stock (the "Requisite OFPI Vote") present in person or by proxy at  
the OFPI Shareholders' Meeting at which a quorum is present is the only vote of 
the holders of any class or series of OFPI's capital stock necessary to approve 
the issuance of the Merger Shares and to adopt and approve this Agreement, the  
Merger and the transactions contemplated thereby.                               

    3.25 OFPI Action. The Board of Directors of OFPI (at a meeting duly called
and held) has (a) unanimously (without counting the vote of John Battendieri)   
determined that the Merger is advisable and fair and in the best interests of   

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OFPI and its shareholders, (b) unanimously (without counting the vote of John   
Battendieri) approved this Agreement, the Merger and the Restated Articles in   
accordance with the applicable provisions of the CGCL, and (c) unanimously      
(without counting the vote of John Battendieri) recommended the adoption and    
approval of this Agreement and the Merger by the holders of OFPI Common Stock   
and directed that this Agreement, and the Merger be submitted for consideration 
by the OFPI's shareholders at the OFPI Shareholders' Meeting.                   

3.26         Full Disclosure.                                         

   (a) To OFPI's Knowledge, all documents, contracts, instruments,
certificates, notices, consents, affidavits, letters, telegrams, telexes,       
written statements, schedules (including the OFPI Disclosure Schedule), exhibits
(including the Exhibits to this Agreement) and any other papers whatsoever      
(excluding in all cases drafts and interim versions marked as such or apparent  
as such on their face) delivered to the Company by OFPI in connection with this 
Agreement and the transactions contemplated thereby, are true and complete      
copies thereof. The representations and warranties of OFPI contained in this    
Agreement, as modified by the OFPI Disclosure Schedule, contain no untrue       
statements of any material fact or omit to state any material fact required to  
be stated therein or necessary to make the statements therein, in light of the  
circumstances under which they were made, not false or misleading.              

         (b) The information supplied by OFPI for inclusion in the Joint Proxy
Statement (including the OFPI Financial Statements) will not, as of the date of 
the Joint Proxy Statement or as of the date of the OFPI Shareholders' Meeting   
(as defined in Section 5.5), and in each case, as of the date such information  
is prepared or presented, contain any statement that is inaccurate or misleading
with respect to any material fact, or (ii) omit to state any material fact      
necessary in order to make such information not false or misleading.            

  3.27 Finder's Fee. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
or any of the other transactions contemplated thereby based upon arrangements   
made by or on behalf of OFPI.                                                   

SECTION 4. CERTAIN COVENANTS OF THE COMPANY                           

4.1 Access and Investigation. During the period from the date of this 
Agreement through the Effective Time (the "Pre-Closing Period"), the Company    
shall, and shall cause its Representatives to: (a) provide OFPI and OFPI's      
Representatives with reasonable access to the Company's Representatives,        
personnel and assets and to all existing books, records, Tax Returns, work      
papers and other documents and information relating to the Company and (b)      
provide OFPI and OFPI's Representatives with such copies of the existing books, 
records, Tax Returns, work papers and other documents and information relating  
to the Company, and with such additional financial, operating and other data and
information regarding the Company, as OFPI may reasonably request.              

    4.2 Operation of the Company's Business. Except as agreed to in writing by
OFPI, during the Pre-Closing Period, the Company shall, and shall cause the     
Company Subsidiary to:                                                          

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         (a) conduct its business and operations in the ordinary course and in
substantially the same manner as such business and operations have been         
conducted prior to the date of this Agreement;                                  

      (b) use reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and employees 
and maintain its relations and goodwill with all suppliers, customers,          
landlords, creditors, employees and other Persons having business relationships 
with the Company or the Company Subsidiary;                                     

          (c) keep in full force all insurance policies in effect as of the date
of this Agreement;                                                              

     (d) cause its officers to report regularly to OFPI concerning the
status of the Company's business;                                               

      (e) not declare, accrue, set aside or pay any dividend or make any
other distribution in respect of any shares of capital stock, and shall not     
repurchase, redeem or otherwise reacquire any shares of capital stock or other  
securities;                                                                     

          (f) not sell, issue or authorize the issuance of (i) any capital stock
or other security, (ii) any option, call, warrant or right to acquire, or       
relating to, any capital stock or other security, or (iii) any instrument       
convertible into or exchangeable for any capital stock or other security;       

          (g) not amend or permit the adoption of any amendment to the Company's
articles of incorporation or bylaws, or effect or permit the Company or the     
Company Subsidiary to become a party to any Company Acquisition Transaction,    
recapitalization, reclassification of shares, stock split, reverse stock split  
or similar transaction;                                                         

       (h) not form any subsidiary or acquire any equity interest or other
interest in any other Entity;                                                   

         (i) not make any capital expenditure, except for capital expenditures
that, when added to all other capital expenditures made by the Company or the   
Company Subsidiary during the Pre-Closing Period, do not exceed $100,000 in the 
aggregate;                                                                      

          (j) not (i) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any Material Company Contract except in 
the ordinary course of business, or (ii) amend or prematurely terminate, or     
waive any material right or remedy under, any Material Company Contract;        

     (k) not (i) acquire, lease or license any material right or other
material asset from any other Person, (ii) sell or otherwise dispose of, or     
lease or license, any material right or other material asset to any other       
Person, or (iii) waive or relinquish any material right, other than in the      
ordinary course of business and except for immaterial assets acquired, leased,  
licensed or disposed of by the Company pursuant to Contracts that are not       
Material Company Contracts;                                                     

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        (l) not (i) lend money to any Person, or (ii) incur or guarantee any
indebtedness, except for routine advances of expenses to employees in the       
ordinary course of business and except that the Company may make routine        
borrowings in the ordinary course of business under its existing bank lines of  
credit;                                                                         

   (m) not (i) pay any bonus or make any profit-sharing or similar
payment to, or increase the amount of the wages, salary, commissions, fringe    
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees, other than in the ordinary course of business and solely 
with respect to non-officers and non-directors or (ii) establish, adopt or amend
any Employee Benefit Plan;                                                      

 (n) not change any of its methods of accounting or accounting
practices in any respect;                                                       

(o) not make any Tax election;                              

        (p) not commence or settle any Legal Proceeding not disclosed in the
Company Disclosure Schedule;                                                    

          (q) not enter into any material transaction or take any other material
action outside the ordinary course of business or inconsistent with its past    
practices; and                                                                  

   (r) not agree or commit to take any of the actions described in
clauses "(e)" through "(q)" of this Section 4.2.                                

4.3 Notification; Updates to Company Disclosure Schedule.             

        (a) During the Pre-Closing Period, the Company shall promptly notify
OFPI in writing of:                                                             

               (i) the discovery by the Company of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement 
and that caused or constitutes an inaccuracy in or breach of any representation 
or warranty made by the Company in this Agreement;                              

          (ii) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or       
constitute an inaccuracy in or breach of any representation or warranty made by 
the Company in this Agreement if (A) such representation or warranty had been   
made as of the time of the occurrence, existence or discovery of such event,    
condition, fact or circumstance, or (B) such event, condition, fact or          
circumstance had occurred, arisen or existed on or prior to the date of this    
Agreement;                                                                      

           (iii) any breach of any covenant or obligation of the Company
hereunder; and                                                                  

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             (iv) any event, condition, fact or circumstance that would make
the timely satisfaction of any of the conditions set forth in Section 7 or      
Section 8 impossible or unlikely.                                               

         (b) If any event, condition, fact or circumstance that is required to
be disclosed pursuant to Section 4.3(a) requires any change in the Company      
Disclosure Schedule, or if any such event, condition, fact or circumstance would
require such a change assuming the Company Disclosure Schedule were dated as of 
the date of the occurrence, existence or discovery of such event, condition,    
fact or circumstance, then the Company shall promptly deliver to OFPI an update 
to the Company Disclosure Schedule specifying such change. No such update shall 
be deemed to supplement or amend the Company Disclosure Schedule for the purpose
of (i) determining the accuracy of any of the representations and warranties    
made by the Company in this Agreement, or (ii) determining whether any of the   
conditions set forth in Section 7 has been satisfied.                           

4.4 No Solicitation. During the Pre-Closing Period:                   

         (a) Company shall not directly or indirectly, and shall not authorize
or permit any Representative of Company directly or indirectly to, (i) solicit, 
initiate, encourage or induce the making, submission or announcement of any     
Acquisition Proposal or take any action (excluding any press releases issued in 
connection with the announcement of the execution of this Agreement) that could 
reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any     
information regarding Company to any Person in connection with or in response to
an Acquisition Proposal, (iii) continue or engage in discussions with any Person
with respect to any Acquisition Proposal, (iv) approve, endorse or recommend any
Acquisition Proposal or (v) enter into any letter of intent or similar document 
or any Contract contemplating or otherwise relating to any Company Acquisition  
Transaction.                                                                    

       (b) The Company shall promptly advise OFPI orally and in writing of
any Acquisition Proposal (including the identity of the Person making or        
submitting such Acquisition Proposal and the term thereof) that is made or      
submitted by any Person during the Pre-Closing Period.                          

          (c) The Company shall immediately cease and cause to be terminated any
existing discussions with any Person that relate to any Acquisition Proposal.   

4.5 Company Shareholders' Meeting.                                    

        (a) The Company shall take all action necessary under all applicable
Legal Requirements to call, give notice of, convene and duly hold a meeting or  
obtain the unanimous written consent of the holders of Company Common Stock (the
"Company Shareholders' Meeting") to consider, act upon and vote upon the        
adoption and approval of this Agreement and approval of the Merger. The Company 
Shareholders' Meeting will be held as promptly as practicable.                  

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 4.6 Tax Representation Letters; Continuity of Interest Certificates. As
soon as practicable after the execution of this Agreement, the Company shall    
deliver to Bosso, Williams, Sachs, Book, Atack & Gallagher, A Professional      
Corporation ("Bosso, Williams") and Carr, McClellan, Ingersoll, Thompson & Horn 
Professional Corporation, tax representation letters substantially in the form  
of the attached Exhibit C (which will be used and relied upon by such firms in  
connection with the legal opinions contemplated by Section 7.8 and Section 8.7).

SECTION 5. CERTAIN COVENANTS OF OFPI                                  

  5.1 Access and Investigation. During the Pre-Closing Period, OFPI shall,
and shall cause its Representatives to: (a) provide the Company and the         
Company's Representatives with reasonable access to OFPI's Representatives,     
personnel and assets and to all existing books, records, Tax Returns, work      
papers and other documents and information relating to OFPI; and (b) provide the
Company and the Company's Representatives with such copies of the existing      
books, records, Tax Returns, work papers and other documents and information    
relating to OFPI, and with such additional financial, operating and other data  
and information regarding OFPI, as the Company may reasonably request.          

     5.2 Operation of OFPI's Business. Except as relates to the Spectrum Merger,
as agreed to by Spectrum or as agreed to in writing by the Company, during the  
Pre-Closing Period, OFPI shall:                                                 

         (a) conduct its business and operations in the ordinary course and in
substantially the same manner as such business and operations have been         
conducted prior to the date of this Agreement;                                  

      (b) use reasonable efforts to preserve intact its current business
organization, keep available the services of its current officers and employees 
and maintain its relations and goodwill with all suppliers, customers,          
landlords, creditors, employees and other Persons having business relationships 
with OFPI;                                                                      

         (c) keep in full force all insurance policies in place as of the date
of this Agreement;                                                              

        (d) cause its officers to report regularly to the Company concerning
the status of OFPI's business;                                                  

      (e) not declare, accrue, set aside or pay any dividend or make any
other distribution in respect of any shares of capital stock, and shall not     
repurchase, redeem or otherwise reacquire any shares of capital stock or other  
securities;                                                                     

       (f) not, without the written consent of the Company, sell, issue or
authorize the issuance of (i) any capital stock or other security, (ii) any     
option, call, warrant or right to acquire, or relating to, any capital stock or 
other security, or (iii) any instrument convertible into or exchangeable for any
capital stock or other security (except that OFPI shall be permitted to issue   
OFPI Common Stock upon the exercise of OFPI Options outstanding as of the date  
hereof;                                                                         

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          (g) not amend or waive any of its rights under, or (except pursuant to
the express terms of OFPI Options outstanding on the date hereof and listed on  
Part 3.3 of the OFPI Disclosure Schedule which provide for automatic            
acceleration upon consummation of the Merger) permit the acceleration of vesting
under, (i) any provision of its OFPI Stock Plans, (ii) any provision of any     
agreement evidencing any outstanding OFPI Option or OFPI Warrant, or (iii) any  
provision of any restricted stock purchase agreement;                           

         (h) not amend or permit the adoption of any amendment to its articles
of incorporation or bylaws, or effect or permit OFPI to become a party to any   
Acquisition Transaction, recapitalization, reclassification of shares, stock    
split, reverse stock split or similar transaction (except for the Spectrum      
Merger);                                                                        

       (i) not form any subsidiary or acquire any equity interest or other
interest in any other Entity;                                                   

         (j) not make any capital expenditure, except for capital expenditures
that, when added to all other capital expenditures made by OFPI during the      
Pre-Closing Period, do not exceed $50,000 in the aggregate;                     

          (k) not (i) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any Material OFPI Contract except in the
ordinary course of business, or (ii) amend or prematurely terminate, or waive   
any material right or remedy under, any Material OFPI Contract;                 

     (l) not (i) acquire, lease or license any material right or other
material asset from any other Person, (ii) sell or otherwise dispose of, or     
lease or license, any material right or other material asset to any other       
Person, or (iii) waive or relinquish any material right, other than in the      
ordinary course of business and except for immaterial assets acquired, leased,  
licensed or disposed of by OFPI pursuant to Contracts that are not Material OFPI
Contracts;                                                                      

        (m) not (i) lend money to any Person, or (ii) incur or guarantee any
indebtedness, except for routine advances of expenses to employees in the       
ordinary course of business and except that OFPI may make routine borrowings in 
the ordinary course of business under its existing bank lines of credit         
disclosed in the OFPI SEC Documents;                                            

   (n) not (i) pay any bonus or make any profit-sharing or similar
payment to, or increase the amount of the wages, salary, commissions, fringe    
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees other than in the ordinary course of business and solely  
with respect to non-officers and non-directors, or (ii) establish, adopt or     
amend any Employee Benefit Plan;                                                

 (o) not change any of its methods of accounting or accounting
practices in any respect;                                                       

(p) not make any Tax election;                              

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(q) not commence or settle any Legal Proceeding;            

          (r) not enter into any material transaction or take any other material
action outside the ordinary course of business or inconsistent with its past    
practices; and                                                                  

   (s) not agree or commit to take any of the actions described in
clauses "(e)" through "(r)" of this Section 5.2.                                

5.3 Notification; Updates to OFPI Disclosure Schedule.                

     (a) During the Pre-Closing Period, OFPI shall promptly notify the
Company in writing of:                                                          

        (i) the discovery by OFPI of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement 
and that caused or constitutes an inaccuracy in or breach of any representation 
or warranty made by OFPI in this Agreement or an inaccuracy in the OFPI SEC     
Documents;                                                                      

          (ii) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or       
constitute an inaccuracy in or breach of any representation or warranty made by 
OFPI in this Agreement or inaccuracy in the OFPI SEC Documents; if (A) such     
representation or warranty had been made as of the time of the occurrence,      
existence or discovery of such event, condition, fact or circumstance, or (B)   
such event, condition, fact or circumstance had occurred, arisen or existed on  
or prior to the date of this Agreement;                                         

               (iii) any breach of any covenant or obligation of OFPI hereunder;
and                                                                             

             (iv) any event, condition, fact or circumstance that would make
the timely satisfaction of any of the conditions set forth in Section 7 or      
Section 8 impossible or unlikely.                                               

         (b) If any event, condition, fact or circumstance that is required to
be disclosed pursuant to Section 5.3(a) requires any change in the OFPI         
Disclosure Schedule, or if any such event, condition, fact or circumstance would
require such a change assuming the OFPI Disclosure Schedule were dated as of the
date of the occurrence, existence or discovery of such event, condition, fact or
circumstance, then OFPI shall promptly deliver to the Company an update to the  
OFPI Disclosure Schedule specifying such change. No such update shall be deemed 
to supplement or amend the OFPI Disclosure Schedule for the purpose of (i)      
determining the accuracy of any of the representations and warranties made by   
OFPI in this Agreement, or (ii) determining whether any of the conditions set   
forth in Section 8 has been satisfied.                                          

   5.4 No Solicitation. Except as related to the Spectrum Merger, during the
Pre-Closing Period:                                                             

         (a) OFPI shall not directly or indirectly, and shall not authorize or
permit any Representative of OFPI directly or indirectly to, (i) solicit,       
initiate, encourage or induce the making, submission or announcement of any     

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Acquisition Proposal or take any action (excluding any press releases issued in 
connection with the execution of this Agreement or action in compliance with    
OFPI's required disclosure obligations under the Exchange Act) that could       
reasonably be expected to lead to an Acquisition Proposal, (ii) furnish any     
information regarding OFPI to any Person in connection with or in response to an
Acquisition Proposal, (iii) continue or engage in discussions with any Person   
with respect to any Acquisition Proposal, (iv) approve, endorse or recommend any
Acquisition Proposal or (v) enter into any letter of intent or similar document 
or any Contract contemplating or otherwise relating to any OFPI Acquisition     
Transaction; provided, however, that this Section 5.4(a) shall not prohibit OFPI
from furnishing information regarding OFPI to, or entering into discussions     
with, any Person in response to a Superior OFPI Proposal if (1) the Board of    
Directors of OFPI concludes in good faith, based upon the written advice of its 
outside legal counsel, that such action is required in order for the Board of   
Directors of OFPI to comply with its fiduciary obligations to OFPI's            
shareholders under applicable law, (2) prior to furnishing any such information 
to, or entering into discussions with, such Person, OFPI gives the Company      
written notice of the identity of such Person and of OFPI's intention to furnish
information to, or enter into discussions with, such Person, and OFPI receives  
from such Person an executed confidentiality agreement containing customary     
limitations on the use and disclosure of all written and oral information       
furnished to such Person by or on behalf of OFPI, (3) prior to furnishing any   
such information to such Person, OFPI furnishes such information to the Company 
(to the extent such information has not been previously furnished by OFPI to the
Company) and (4) neither OFPI nor any Representative of OFPI shall have violated
any of the restrictions set forth in this Section 5.4.                          

       (b) OFPI shall promptly advise the Company orally and in writing of
any Acquisition Proposal (including the identity of the Person making or        
submitting such Acquisition Proposal and the term thereof) that is made or      
submitted by any Person during the Pre-Closing Period. OFPI shall keep the      
Company fully informed with respect to the status of any such Acquisition       
Proposal and any modifications or proposed modifications thereto.               

   (c) OFPI shall immediately cease and cause to be terminated any
existing discussions with any Person that relate to any Acquisition Proposal.   

5.5 OFPI Shareholders' Meeting.                                       

       (a) OFPI shall take all action necessary under all applicable Legal
Requirements to call, give notice of, convene and duly hold a meeting of the    
holders of OFPI Common Stock (the "OFPI Shareholders' Meeting") to consider, act
upon and vote upon the approval of the issuance of the Merger Shares, the       
adoption and approval of this Agreement, the Merger and the Restated Articles.  
The OFPI Shareholders' Meeting will be held as promptly as practicable and in   
any event within 45 days after the S-4 Registration Statement is declared       
effective under the Securities Act (which 45-day period shall be extended on a  
day-for-day basis if and for so long as any stop order or other similar action  
is in place, pending or threatened by the SEC). OFPI's obligation to call, give 
notice of, convene and hold the OFPI Shareholders' Meeting in accordance with   
this Section 5.5(a) shall not be limited or otherwise affected by the           
commencement, disclosure, announcement or submission of any Superior OFPI Offer 

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or other OFPI Acquisition Transaction, or by any withdrawal, amendment or       
modification of the recommendation of the Board of Directors of OFPI with       
respect to the Merger.                                                          

     (b) Subject to Section 5.5(c): (i) the Board of Directors of OFPI
shall unanimously recommend (without including the vote of John Battendieri, who
will abstain) that OFPI's Shareholders vote in favor of and approve the issuance
of the Merger Shares and adopt and approve this Agreement, the Merger and the   
Restated Articles; (ii) the Joint Proxy Statement shall include a statement to  
the effect that the Board of Directors of OFPI has unanimously (without         
including John Battendieri, who will abstain) made such recommendation; and     
(iii) neither the Board of Directors of OFPI nor any committee thereof shall    
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify,  
in a manner adverse to the Company, such unanimous recommendation. For purposes 
of this Agreement, said recommendation of the Board of Directors shall be deemed
to have been modified in a manner adverse to the Company if said recommendation 
shall no longer be unanimous (without including the vote of John Battendieri,   
who will abstain).                                                              

         (c) Nothing in Section 5.5(b) shall prevent the Board of Directors of
OFPI from withdrawing, amending or modifying its unanimous recommendation in    
favor of the Merger if (i) a Superior OFPI Proposal is made to OFPI and is not  
withdrawn, (ii) neither OFPI nor any of its Representatives shall have violated 
any of the restrictions set forth in Section 5.4, and (iii) the Board of        
Directors of OFPI concludes in good faith, based upon the written advice of its 
outside counsel, that the withdrawal, amendment or modification of such         
recommendation is required in order for the Board of Directors of OFPI to comply
with its fiduciary obligations to OFPI's Shareholders under applicable law.     
Nothing contained in this Section 5.5 shall limit OFPI's obligation to call,    
give notice of, convene and hold the OFPI Shareholders' Meeting (regardless of  
whether the unanimous recommendation of the Board of Directors of OFPI shall    
have been withdrawn, amended or modified).                                      

    5.6 Tax Representation Letters. As soon as practicable after the execution
of this Agreement, OFPI shall deliver to Bosso, Williams and Carr, McClellan,   
Ingersoll, Thompson & Horn Professional Corporation, tax representation letters 
in the form of the attached Exhibit D (which will be used and relied upon in    
connection with the legal opinions contemplated by Section 7.8 and Section 8.7).

SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES                        

     6.1 Filings and Consents. As promptly as practicable after the execution of
this Agreement, each party to this Agreement (a) shall make all filings (if any)
and give all notices (if any) required to be made and given by such party in    
connection with the Merger and the other transactions contemplated by this      
Agreement, and (b) shall use his or its reasonable efforts to obtain each       
Consent (if any) required to be obtained (pursuant to any applicable Legal      
Requirement or Contract, or otherwise) by such party in connection with the     
Merger or any of the other transactions contemplated by this Agreement. Each    
party shall promptly deliver to the other party a copy of each such filing made,
each such notice given and each such Consent obtained by such parties during the
Pre-Closing Period.                                                             

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    6.2 Public Announcements. The parties shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to the Merger and the transactions contemplated thereby. Without limiting the   
generality of the foregoing, neither party shall (and neither party shall permit
any of its Representatives to) issue any press release or make any public       
statement regarding this Agreement or the Merger, or regarding any of the other 
transactions contemplated by this Agreement, without the other party's prior    
consent, except that either party shall be permitted, without the consent of the
other party, to make such disclosures as are required to be made under          
applicable law.                                                                 

6.3 Reasonable Efforts. During the Pre-Closing Period, (a) the Company
shall use its reasonable efforts to cause the conditions set forth in Section 7 
to be satisfied on a timely basis, and (b) OFPI shall use its reasonable efforts
to cause the conditions set forth in Section 8 to be satisfied on a timely      
basis.                                                                          

6.4 Registration Statement.                                           

         (a) As promptly as practicable after the date of this Agreement, OFPI
shall prepare and cause to be filed with the SEC a preliminary Joint Proxy      
Statement to be sent to the Shareholders of OFPI in connection with the OFPI    
Shareholders' Meeting. OFPI and the Company shall use all reasonable efforts to 
cause the Joint Proxy Statement to comply with the rules and regulations        
promulgated by the SEC, to respond promptly to any comments of the SEC or its   
staff and to have the Joint Proxy Statement cleared by the SEC for distribution 
to the OFPI Shareholders. OFPI shall prepare and cause to be filed with the SEC 
a registration statement on Form S-4 concerning the OFPI Common Stock to be     
issued upon the Merger (the "S-4 Registration Statement") after the Company's   
financial statements for the 12 months ended December 31, 1998 have been audited
by the Company's independent auditors and such auditors' report is available.   
The S-4 Registration Statement shall contain or incorporate by reference the    
Joint Proxy Statement as a prospectus, and any other documents required by the  
Securities Act or the Exchange Act in connection with the Merger. The parties   
acknowledge and agree that the foregoing arrangements may be altered by mutual  
consent of the parties as reasonably necessary to respond to any comments or    
requests received from the SEC. OFPI shall use all reasonable efforts to cause  
the S-4 Registration Statement (including the Joint Proxy Statement) to comply  
with the rules and regulations promulgated by the SEC, to respond promptly to   
any comments of the SEC or its staff and to have the S-4 Registration Statement 
declared effective under the Securities Act as promptly as practicable after it 
is filed with the SEC. OFPI will use all reasonable efforts to cause the Joint  
Proxy Statement to be mailed to OFPI's Shareholders, and the Company will use   
all reasonable efforts to cause the Joint Proxy Statement to be mailed to the   
Company's shareholders, as promptly as practicable after the S-4 Registration   
Statement is declared effective under the Securities Act. The Company shall     
promptly furnish to OFPI all information concerning the Company and the         
Company's shareholders that may be required or reasonably requested in          
connection with any action contemplated by this Section 6.4 (including, without 
limitation, the Company Financial Statements). In addition, the Company shall   
promptly furnish to OFPI all information concerning the Company and the Company 
shareholders that may be required or reasonably requested in connection with any
pre- or post-effective amendment to the S-4 Registration Statement. If the      
Company becomes aware of any information that should be set forth in an         

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amendment or supplement to the S-4 Registration Statement or the Joint Proxy    
Statement, then the Company shall promptly inform OFPI thereof and shall        
cooperate with OFPI in filing such amendment or supplement with the SEC and, if 
appropriate, in mailing such amendment or supplement to the shareholders of the 
Company.                                                                        

         (b) Prior to the Effective Time, OFPI shall make all required filings
with state regulatory authorities and the NASD, and shall ensure that the OFPI  
Common Stock to be issued in the Merger will be qualified under the applicable  
securities or "blue sky" laws.                                                  

6.5 Additional Agreements.                                            

     (a) Subject to Section 6.5(b), OFPI and the Company shall use all
reasonable efforts to take, or cause to be taken, all actions necessary to      
consummate the Merger and make effective the other transactions contemplated by 
this Agreement. Without limiting the generality of the foregoing, but subject to
Section 6.5(b), each party to this Agreement shall use all reasonable efforts to
lift any restraint, injunction or other legal bar to the Merger. Each party     
shall promptly deliver to the other, to the extent material, a copy of each such
filing made, each such notice given and each such Consent obtained by such party
during the Pre-Closing Period.                                                  

  (b) Notwithstanding anything to the contrary contained in this
Agreement, neither OFPI nor the Company shall have any obligation under this    
Agreement to do any of the following (or cause the other to do any of the       
following): (i) to dispose or cause any of its subsidiaries to dispose of any   
assets; (ii) to discontinue or cause any of its subsidiaries to discontinue     
offering any product; (iii) to license or otherwise make available, or cause any
of its subsidiaries to license or otherwise make available, to any Person, any  
technology, software or other Proprietary Asset; (iv) to hold separate or cause 
any of its subsidiaries to hold separate any assets or operations (either before
or after the Closing Date); or (v) to make or cause any of its subsidiaries to  
make any commitment (to any Governmental Body or otherwise) regarding its future
operations.                                                                     

 6.6 Regulatory Approvals. The Company and OFPI shall use all reasonable
efforts to file, as soon as practicable after the date of this Agreement, all   
notices, reports and other documents required to be filed with any Governmental 
Body with respect to the Merger and the other transactions contemplated by this 
Agreement, and to submit promptly any additional information requested by any   
such Governmental Body.                                                         

SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OFPI                

   The obligations of OFPI to effect the Merger and otherwise consummate the
transactions contemplated by this Agreement are subject to the satisfaction, at 
or prior to the Closing, of each of the following conditions:                   

7.1 Satisfactory Completion of Pre-Merger Review. OFPI shall have     
satisfactorily completed its pre-Merger investigation and review of the         
Company's business, condition, assets, liabilities, operations, facilities,     
financial performance, net income and prospects and shall be satisfied with the 
results of that investigation and review.                                       

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     7.2 Accuracy of Representations. The representations and warranties made by
the Company in this Agreement shall have been accurate in all material respects 
as of the date of this Agreement and the Closing Date; provided, however, that  
any representations or warranties of the Company that are qualified as to       
materiality or "Material Adverse Effect" shall have been true and correct in all
respects as of the date of this Agreement.                                      

7.3 Performance of Covenants. Each material covenant or obligation    
contained in this Agreement that the Company is required to comply with or to   
perform at or prior to the Closing shall have been complied with and performed  
in all material respects.                                                       

7.4 Compliance Certificate. The Company shall have delivered to OFPI a
certificate (the "Company Compliance Certificate") of the Chief Executive       
Officer of the Company evidencing compliance with the conditions set forth in   
Sections 7.2 and 7.3.                                                           

7.5 Shareholder Approval. The issuance of the Merger Shares, this     
Agreement, and the Merger shall have been adopted and approved by the Requisite 
OFPI Vote and this Agreement and the Merger shall have been adopted and approved
by the Requisite Company Vote.                                                  

  7.6 Consents. All Consents listed in Part 2.23 of the Company Disclosure
Schedule and Part 3.23 of the OFPI Disclosure Schedule shall have been obtained 
and shall be in full force and effect.                                          

7.7 Legal Opinion. OFPI shall have received a legal opinion of Bosso, 
Williams, in substantially the form of the attached Exhibit E, dated as of the  
Closing Date;                                                                   

7.8 Tax Opinion. Company shall have received a legal opinion of Bosso,
Williams in substantially the form of the attached Exhibit F, dated as of the   
Closing Date, to the effect that the Merger will constitute a reorganization    
within the meaning of Section 368(a) of the Code (it being understood that, in  
rendering such opinion, Bosso, Williams may rely upon the tax representation    
letters referred to in Section 4.6).                                            

     7.9 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger shall have  
been issued by any court of competent jurisdiction and remain in effect, and    
there shall not be any Legal Requirement enacted or deemed applicable to the    
Merger that makes consummation of the Merger illegal.                           

7.10 Employment Agreements. Joseph Stern shall have entered into an   
employment agreement mutually satisfactory to OFPI and Joseph Stern.            

    7.11 Shareholder Lock-up Agreements. The Company's Shareholders shall have
entered into an agreement with OFPI prohibiting such persons from transferring  
any OFPI Common Stock beneficially owned by such persons for a period of one    
year from the Closing Date.                                                     

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SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY                   

The obligations of the Company to effect the Merger and otherwise     
consummate the transactions contemplated by this Agreement are subject to the   
satisfaction, at or prior to the Closing, of each of the following conditions:  

     8.1 Accuracy of Representations. The representations and warranties made by
OFPI in this Agreement shall have been accurate in all material respects as of  
the date of this Agreement; provided, however, that any representations or      
warranties of OFPI that are qualified as to materiality or "Material Adverse    
Effect" shall have been true and correct in all respects as of the date of this 
Agreement.                                                                      

8.2 Performance of Covenants. Each material covenant or obligation    
contained in this Agreement that OFPI is required to comply with or to perform  
at or prior to the Closing shall have been complied with and performed in all   
material respects.                                                              

8.3 Compliance Certificate. OFPI shall have delivered to the Company a
certificate (the "OFPI Compliance Certificate") of the Chief Executive Officer  
of the OFPI evidencing compliance with the conditions set forth in Sections 8.1 
and 8.2.                                                                        

8.4 Shareholder Approval. The issuance of the Merger Shares and this  
Agreement, the Merger and the Restated Articles shall have been adopted and     
approved by the Requisite OFPI Vote and this Agreement and the Merger shall have
been adopted and approved by the Requisite Company Vote.                        

  8.5 Consents. All Consents listed in Part 2.21 of the Company Disclosure
Schedule and Part 3.21 of the OFPI Disclosure Schedule shall have been obtained 
and shall be in full force and effect.                                          

     8.6 Legal Opinion. The Company shall have received a legal opinion of Carr,
McClellan, Ingersoll, Thompson & Horn Professional Corporation, dated as of the 
Closing Date, in substantially the form of the attached Exhibit G;              

8.7 Tax Opinion. OFPI shall have received a legal opinion of Carr,    
McClellan, Ingersoll, Thompson & Horn Professional Corporation in substantially 
the form of the attached Exhibit H, dated as of the Closing Date, to the effect 
that the Merger will constitute a reorganization within the meaning of Section  
368(a) of the Code (it being understood that, in rendering such opinion, Carr,  
McClellan, Ingersoll, Thompson & Horn Professional Corporation may rely upon the
tax representation letters and Continuity of Interest Certificates referred to  
in Section 4.6);                                                                

     8.8 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order preventing the consummation of the Merger shall have  
been issued by any court of competent jurisdiction and remain in effect, and    
there shall not be any Legal Requirement enacted or deemed applicable to the    
Merger that makes consummation of the Merger illegal.                           

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8.9 Spectrum Merger. OFPI shall have taken all steps necessary to     
accomplish the Spectrum Merger immediately after the Merger and shall provide   
the Company with evidence of Spectrum's intent to accomplish the Spectrum Merger
immediately following the Merger.                                               

8.10 Employment Agreement. OFPI shall have entered into an employment 
agreement with Joseph Stern mutually satisfactory to OFPI and Joseph Stern.     

SECTION 9. TERMINATION AND INDEMNIFICATION                                      

  9.1 Termination. This Agreement may be terminated prior to the Effective
Time (whether before or after approval of the Merger by the Requisite Company   
Vote and/or the Requisite OFPI Vote):                                           

(a) by mutual written consent of OFPI and the Company;      

       (b) by either OFPI or the Company if the Merger shall not have been
consummated by August 31, 1999 (unless the failure to consummate the Merger is  
attributable to a failure on the part of the party seeking to terminate this    
Agreement to perform any material obligation required to be performed by such   
party at or prior to the Effective Time or unless the SEC has not completed its 
review of the Joint Proxy Statement or OFPI is in the process of addressing SEC 
comments);                                                                      

          (c) by either OFPI or the Company if a court of competent jurisdiction
or other Governmental Body shall have issued a final and nonappealable order,   
decree or ruling, or shall have taken any other action, having the effect of    
permanently restraining, enjoining or otherwise prohibiting the Merger;         

   (d) by either OFPI or the Company if (i) the OFPI Shareholders'
Meeting (including any adjournments thereof) shall have been held and completed 
and OFPI's Shareholders shall have taken a final vote on a proposal to approve  
the issuance of the Merger Shares and to approve and adopt this Agreement and   
the Merger and (ii) this Agreement and the Merger shall not have been adopted   
and approved at such meeting by the Requisite OFPI Vote; provided, however, that
OFPI shall not be permitted to terminate this Agreement pursuant to this Section
9.1(d) if the failure of OFPI's Shareholders to approve the issuance of the     
Merger Shares and to adopt and approve this Agreement and the Merger at the OFPI
Shareholders' Meeting is attributable to a failure on the part of OFPI to       
perform any material obligation required to have been performed by OFPI under   
this Agreement; and provided, further, that OFPI shall not be permitted to      
terminate this Agreement pursuant to this Section 9.1(d) unless OFPI shall have 
paid the fee referred to in Section 9.3(b);                                     

        (e) at any time prior to the adoption and approval of this Agreement
and the Merger by the Requisite OFPI Vote and the Requisite Company Vote, by the
Company if a OFPI Triggering Event shall have occurred; or                      

          (f) by either party if any of the other party's covenants contained in
this Agreement shall have been breached in any material respect; provided,      
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such party is continuing to exercise all reasonable efforts to cure such breach,
then the other party may not terminate this Agreement under this Section 9.1(f) 
on account of such breach and provided, further, that a party may not terminate 
this Agreement pursuant to this Section 9.1(f) if it shall have materially      
breached this Agreement.                                                        

9.2 Effect of Termination. In the event of the termination of this    
Agreement as provided in Section 9.1, this Agreement shall be of no further     
force or effect; provided, however, that (i) this Section 9.2, Section 9.3,     
Section 6.2 and Section 10 shall survive the termination of this Agreement and  
shall remain in full force and effect, and (ii) the termination of this         
Agreement shall not relieve any party from any liability for any breach of this 
Agreement.                                                                      

9.3 Fees and Expenses; Termination Fees.                              

   (a) Except as set forth in this Section 9.3, each party to this
Agreement shall bear and pay all fees, costs and expenses (including legal fees 
and accounting fees) that have been incurred or that are incurred in the future 
by such party in connection with the transactions contemplated by this          
Agreement, including all fees, costs and expenses incurred by such party in     
connection with or by virtue of (a) the investigation and review conducted by   
such party (or its Representatives) with respect to the other party's business  
(and the furnishing of information to the other party and its Representatives in
connection with such investigation and review), (b) the negotiation, preparation
and review of this Agreement and all agreements, certificates, opinions and     
other instruments and documents delivered or to be delivered in connection with 
the transactions contemplated by this Agreement, (c) the preparation and        
submission of any filing or notice required to be made or given in connection   
with any of the transactions contemplated by this Agreement, and the obtaining  
of all Consents and Governmental Authorizations required to be obtained in      
connection with any of such transactions, and (d) the consummation of the Merger
("Out of Pocket Costs").                                                        

    (b) If this Agreement is terminated by OFPI or the Company under
Section 9.1(e) or by OFPI under Section 9.1(f), the Company shall immediately   
pay to OFPI all termination fees to be paid by OFPI to Spectrum in connection   
with the Spectrum Merger and OFPI's Out of Pocket Costs.                        

9.4 Indemnification by OFPI.                                          

  (a) OFPI shall hold harmless and indemnify each of the Company
Indemnitees from and against, and shall compensate and reimburse each of the    
Company Indemnitees for, any Damages which are directly or indirectly suffered  
or incurred by any of the Company Indemnitees or to which any of the Company    
Indemnitees may otherwise become subject at any time (regardless of whether or  
not such Damages relate to any third-party claim) and which arise directly or   
indirectly from or as a direct or indirect result of, or are directly or        
indirectly connected with:                                                      

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              (i) any breach of any representation or warranty made by OFPI in
this Agreement (without giving effect to any update to the OFPI Disclosure      
Schedule) or in the OFPI Compliance Certificate;                                

         (ii) any breach of any representation, warranty, statement,
information or provision contained in the OFPI Disclosure Schedule or in any    
other document delivered or otherwise made available to the Company or any of   
its Representatives by or on behalf of OFPI or any of OFPI's Representatives;   

     (iii) any breach of any covenant or obligation of OFPI;

         (iv) any Liability to which the Company or any of the other
Company Indemnitees may become subject and that arises directly or indirectly   
from or relates directly or indirectly to (A) any product manufactured or sold, 
or any service performed, by or on behalf of OFPI on or at any time prior to the
Closing Date, (B) the presence of any Hazardous Material at any site owned,     
leased, occupied or controlled by OFPI on or at any time prior to the Closing   
Date, or (C) the generation, manufacture, production, transportation,           
importation, use, treatment, refinement, processing, handling, storage,         
discharge, release or disposal of any Hazardous Material (whether lawfully or   
unlawfully) by or on behalf of OFPI on or at any time prior to the Closing Date;
or                                                                              

             (v) any Legal Proceeding relating directly or indirectly to any
Breach, alleged Breach, Liability or matter of the type referred to in clause   
"(i)," "(ii)," "(iii)," or "(iv)," above (including any Legal Proceeding        
commenced by any Company Indemnitee for the purpose of enforcing any of its     
rights under this Section 9).                                                   

9.5 Indemnification by the Company.                                   

      (a) The Company shall hold harmless and indemnify each of the OFPI
Indemnitees from and against, and shall compensate and reimburse each of the    
OFPI Indemnitees for, any Damages which are directly or indirectly suffered or  
incurred by any of the OFPI Indemnitees or to which any of the OFPI Indemnitees 
may otherwise become subject at any time (regardless of whether or not such     
Damages relate to any third-party claim) and which arise directly or indirectly 
from or as a direct or indirect result of, or are directly or indirectly        
connected with:                                                                 

          (i) any breach of any representation or warranty made by the
Company in this Agreement (without giving effect to any update to the Company   
Disclosure Schedule) or in the Company Compliance Certificate;                  

         (ii) any breach of any representation, warranty, statement,
information or provision contained in the Company Disclosure Schedule or in any 
other document delivered or otherwise made available to OFPI or any of its      
Representatives by or on behalf of the Company or any of the Company's          
Representatives;                                                                

            (iii) any breach of any covenant or obligation of the Company;

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       (iv) any Liability to which OFPI or any of the other OFPI
Indemnitees may become subject and that arises directly or indirectly from or   
relates directly or indirectly to (A) any product manufactured or sold, or any  
service performed, by or on behalf of the Company on or at any time prior to the
Closing Date, (B) the presence of any Hazardous Material at any site owned,     
leased, occupied or controlled by the Company on or at any time prior to the    
Closing Date, or (C) the generation, manufacture, production, transportation,   
importation, use, treatment, refinement, processing, handling, storage,         
discharge, release or disposal of any Hazardous Material (whether lawfully or   
unlawfully) by or on behalf of the Company on or at any time prior to the       
Closing Date; or                                                                

             (v) any Legal Proceeding relating directly or indirectly to any
Breach, alleged breach, Liability or matter of the type referred to in clause   
"(i)," "(ii)," "(iii)," or "(iv), above (including any Legal Proceeding         
commenced by any OFPI Indemnitee for the purpose of enforcing any of its rights 
under this Section 9).                                                          

   9.6 Threshold. Neither OFPI nor the Company shall be required to make any
indemnification payment pursuant to Sections 9.4 or 9.5, respectively, until    
such time as the total amount of all Damages (including the Damages arising from
such Breach and all other Damages arising from any other Breach or Liability)   
that have been directly or indirectly suffered or incurred by any one or more of
the Company Indemnitees or OFPI Indemnitees, as the case may be, or to which any
one or more of the Company Indemnitees or OFPI Indemnities, as the case may be, 
has or have otherwise become subject, exceeds $100,000 in the aggregate. At such
time as the total amount of such Damages exceeds $100,000 in the aggregate, the 
Indemnitees shall be entitled to be indemnified against the full amount of such 
Damages (and not merely the portion of such Damages exceeding $100,000).        

 9.7 Maximum Liability. The total amount of the payments that either the
Company or OFPI can be required to make under or in connection with this Section
9 shall be limited in the aggregate to a maximum of $500,000, and neither the   
Company's nor OFPI's respective cumulative liability shall exceed such amount.  

    9.8 Calculation of Indemnification Payments. In the event that either OFPI
or the Company is required to make any indemnification payment pursuant to      
Sections 9.4 or 9.5, respectively, each as limited by Sections 9.6 and 9.7, the 
number of shares of OFPI Common Stock issued to the Company Shareholders        
pursuant to Section 1.5(b)(iii) shall be adjusted as follows:                   

        (a) If the Company is required to make an indemnification payment to
OFPI, then the number of shares of OFPI Common Stock beneficially owned by the  
Company Shareholders equal to the amount of such required payment shall be      
cancelled by OFPI, based upon a per share price of the OFPI Common Stock equal  
to the average of the per share price of the OFPI Common Stock for the three    
trading days prior to the Closing Date; and                                     

     (b) If OFPI is required to make an indemnification payment to the
Company, then the number of shares of OFPI Common Stock equal to the amount of  
such required payment shall be issued by OFPI to the Company Shareholders based 
upon a per share price of the OFPI Common Stock equal to the average of the per 
share price of the OFPI Common Stock for the three trading days prior to the    
Closing Date.                                                                   

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SECTION 10. MISCELLANEOUS PROVISIONS                                            

  10.1 Survival of Representations and Warranties. The representations and
warranties contained in this Agreement or in any instrument delivered pursuant  
to this Agreement shall survive the Merger for a period of two (2) years.       

  10.2 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and  
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any  
of the transactions contemplated by this Agreement.                             

  10.3 Attorneys' Fees. Subject to Section 9.3(b), if any action at law or
suit in equity to enforce this Agreement or the rights of any of the parties    
hereunder is brought against any party hereto, the prevailing party shall be    
entitled to recover reasonable attorneys' fees, costs and disbursements (in     
addition to any other relief to which the prevailing party may be entitled).    

     10.4 Notices. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be    
deemed properly delivered, given and received when delivered (by hand, by       
registered mail, by courier or express delivery service or by facsimile) to the 
address or facsimile telephone number set forth beneath the name of such party  
below (or to such other address or facsimile telephone number as such party     
shall have specified in a written notice given to the other parties hereto):    

if to OFPI:                                                                     

ORGANIC FOOD PRODUCTS, INC.                                   
550 Monterey Road, Suite B                                    
Morgan Hill, CA  95037                                        
Attention:   Chief Executive Officer                          
Facsimile:   (408) 782-1143                                   

with a copy to (which shall not constitute notice):                             

Carr, McClellan, Ingersoll, Thompson &                        
Horn Professional Corporation                                 
216 Park Road                                                 
Burlingame, CA  94010                                         
Attention:                 James F. Blood, Esq.               
Facsimile:                 (650) 342-7685                     

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if to the Company:                                                              

Organic Ingredients, Inc.                                     
335 Spreckler Drive, Suite F                                  
Aptos, CA 95003                                               
Attention:       Joseph Stern                                 
Facsimile:       (___) ________                               

with a copy to (which shall not constitute notice):                             

Bosso, Williams, Sachs, Book                                  
Atack & Gallagher, A Professional Corporation                 
133 Mission Street, Suite 280                                 
Santa Cruz, CA  95061                                         
Attention:       Dennis R. Book                               
Facsimile:       (831) 423-2839                               

All such notices and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of a telecopy, upon completion of successful transmission of the    
communication, (c) in the case of delivery by nationally recognized, overnight  
courier, on the business day following dispatch and (d) in the case of mailing, 
on the fifth business day following such mailing.                               

10.5 Time of the Essence. Time is of the essence of this Agreement.   

    10.6 Governing Law; Venue. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of        
California (without giving effect to principles of conflicts of laws).          

10.7 Successors and Assigns. Except as provided in Section 10.8, this 
Agreement shall be binding upon and shall be enforceable by and inure solely to 
the benefit of, the parties hereto and their successors and assigns; provided,  
however, that this Agreement may not be assigned by any party without the       
written consent of the other parties, and any attempted assignment without such 
consent shall be void and of no effect.                                         

    10.8 Remedies Cumulative; Specific Performance. The rights and remedies of
the parties hereto shall be cumulative (and not alternative). The parties to    
this Agreement agree that, in the event of any breach or threatened breach by   
any party to this Agreement of any covenant, obligation or other provision set  
forth in this Agreement for the benefit of any other party to this Agreement,   
such other party shall be entitled (in addition to any other remedy that may be 
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other    
provision, and (b) an injunction restraining such breach or threatened breach.  

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10.9 Waiver.                                                          

          (a) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any Person
in exercising any power, right, privilege or remedy under this Agreement, shall 
operate as a waiver of such power, right, privilege or remedy; and no single or 
partial exercise of any such power, right, privilege or remedy shall preclude   
any other or further exercise thereof or of any other power, right, privilege or
remedy.                                                                         

         (b) No Person shall be deemed to have waived any claim arising out of
this Agreement, or any power, right, privilege or remedy under this Agreement,  
unless the waiver of such claim, power, right, privilege or remedy is expressly 
set forth in a written instrument duly executed and delivered on behalf of such 
Person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.                                     

   10.10 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and      
delivered on behalf of all of the parties hereto.                               

   10.11 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,    
shall be determined to be invalid, unlawful, void or unenforceable to any       
extent, the remainder of this Agreement, and the application of such provision  
to Persons or circumstances other than those as to which it is determined to be 
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise    
affected and shall continue to be valid and enforceable to the fullest extent   
permitted by law.                                                               

10.12 Parties in Interest. None of the provisions of this Agreement is
intended to provide any rights or remedies to any Person other than the parties 
hereto and their respective successors and assigns (if any).                    

   10.13 Disclosure Schedules. The disclosure schedules shall be arranged in
separate parts corresponding to the numbered and lettered sections contained in 
Section 2 or in Section 3, as the case may be. The information disclosed in any 
numbered or lettered part shall be deemed to be disclosed and incorporated in   
any other numbered or lettered part where the relevance of such disclosure to   
another numbered or lettered part would be reasonably apparent from such        
disclosure.                                                                     

     10.14 Entire Agreement. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties hereto relating to the 
subject matter hereof and supersede all prior and contemporaneous agreements and
understandings among or between any of the parties relating to the subject      
matter hereof.                                                                  

10.15 Construction.                                                   

          (a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine gender  
shall include the feminine and neuter genders; the feminine gender shall include
the masculine and neuter genders; and the neuter gender shall include the       
masculine and feminine genders.                                                 

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     (b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not 
be applied in the construction or interpretation of this Agreement.             

       (c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but      
rather shall be deemed to be followed by the words "without limitation."        

          (d) Except as otherwise indicated, all references in this Agreement to
"Sections" and "Exhibits" are intended to refer to Sections of this Agreement   
and Exhibits to this Agreement.                                                 

     10.16 Headings. The bold-faced section headings contained in this Agreement
are for convenience of reference only, shall not be deemed to be a part of this 
Agreement and shall not be referred to in connection with the construction or   
interpretation of this Agreement.                                               

     10.17 Counterparts. This Agreement may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken         
together, shall constitute one and the same instrument.                         

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The parties hereto have caused this Agreement and Plan of Merger and  
Reorganization to be executed and delivered as of the date first written above. 

                                            ORGANIC FOOD PRODUCTS, INC.,
                                        a California corporation

/s/  John Battendieri                                                           
______________________________                  By: /s/ Richard R. Bacigalupi   
JOHN BATTENDIERI                                              
                                           Name: Richard R. Bacigalupi

                                              Title: Chief Financial Officer

/s/  Joseph Stern                                                               

______________________________                   ORGANIC INGREDIENTS, INC.,     
 JOSEPH STERN                           a California corporation

                                    By: /s/ Joseph Stern

                                   Name:  Joseph Stern

                                Title: President

 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
SIGNATURE PAGE

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 EXHIBIT A

 CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):                       

Acquisition Proposal. "Acquisition Proposal" shall mean any offer or  
proposal (other than an offer or proposal by OFPI or the Company, as the case   
may be) contemplating or otherwise relating to any Company Acquisition          
Transaction or OFPI Acquisition Transaction, as the case may be.                

Agreement. "Agreement" shall mean the Agreement and Plan of Merger and
Reorganization to which this Exhibit A is attached (including all other         
exhibits), as it may be amended from time to time.                              

Breach. There shall be deemed to be a "Breach" of a representation,   
warranty, covenant, obligation or other provision if there is or has been (a)   
any inaccuracy in or breach of, or any failure to comply with or perform, such  
representation, warranty, covenant, obligation or other provision, or (b) any   
claim (by any Person) or other circumstance that is inconsistent with such      
representation, warranty, covenant, obligation or other provision; and the term 
"Breach" shall be deemed to refer to any such inaccuracy, breach, failure,      
claim, or circumstance.                                                         

  Company Acquisition Transaction. "Company Acquisition Transaction" shall
mean any transaction involving:                                                 

   (a) any sale, lease exchange, transfer or other disposition of the assets
of Company constituting more than 10% of the consolidated assets of Company or  
accounting for more than 10% of the consolidated revenues of Company in any one 
transaction or in a series of related transactions.                             

(b) any offer to purchase, tender offer, exchange offer or any similar
transaction or series of related transactions made by any Person involving more 
than 10% of the outstanding shares of the capital stock of the Company.         

(c) any merger, consolidation, business combination, share exchange,  
reorganization or other similar transaction or series of related transactions   
involving Company.                                                              

     (d) any assignment, transfer or licensing or other disposition of, in whole
or in part, the Company Proprietary Assets, other than in the ordinary course of
business. Company Comparable Entities. "Company Comparable Entities" shall mean 
Entities (other than the Company) that are engaged in businesses similar to the 
Company's business.                                                             

    Company Contract. "Company Contract" shall mean any Contract: (a) to which
the Company is a party; (b) by which the Company or any of its assets is or may 
become bound or under which the Company has, or may become subject to, any      
obligation; or (c) under which the Company has or may acquire any right or      
interest.                                                                       

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   Company Disclosure Schedule. "Company Disclosure Schedule" shall mean the
schedule (dated as of the date of the Agreement) delivered to OFPI by the       
Company.                                                                        

Company Indemnitees. "Company Indemnitees" shall mean the following   
Persons:                                                                        

(a) the Company;                                                      

(b) the Company's current and future affiliates (including OFPI);     

  (c) the respective Representatives of the Persons referred to in clauses
"(a)" and "(b)" above; and                                                      

 (d) the respective successors and assigns of the Persons referred to in
clauses "(a)", "(b)" and "(c)" above;                                           

provided, however, that (i) OFPI shall not be entitled to exercise any rights as
a Company  Indemnitee prior to the Closing,  and (ii) shareholders of OFPI other
than the Persons that receive Shares  pursuant to the Merger shall not be deemed
to be "Company Indemnitees."                                                    

Company Proprietary Asset. "Company Proprietary Asset" shall mean any 
Proprietary Asset owned by or licensed to the Company or otherwise used by the  
Company .                                                                       

  Company Shareholders. "Company Shareholders" shall mean those holders of
Company Common Stock entitled to receive shares of OFPI Common Stock pursuant to
Section 1.5.                                                                    

Consent. "Consent" shall mean any approval, consent, ratification,    
permission, waiver or authorization (including any Governmental Authorization). 

Contract. "Contract" shall mean any written, oral or other agreement, 
contract, subcontract, lease, understanding, instrument, note, warranty,        
insurance policy, benefit plan, or legally binding commitment or undertaking of 
any nature.                                                                     

Damages. "Damages" shall include any loss, damage, injury, decline in 
value, lost opportunity, Liability, claim, demand, settlement, judgment, award, 
fine, penalty, Tax, fee (including any legal fee, expert fee, accounting fee or 
advisory fee), charge, cost (including any cost of investigation) or expense of 
any nature.                                                                     

Employee Benefit Plan. "Employee Benefit Plan" shall have the meaning 
specified in Section 3(3) of ERISA.                                             

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Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,          
interference, option, right of first refusal, preemptive right, community       
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any 
restriction on the use of any asset and any restriction on the possession,      
exercise or transfer of any other attribute of ownership of any asset).         

Entity. "Entity" shall mean any corporation (including any non-profit 
corporation), general partnership, limited partnership, limited liability       
partnership, joint venture, estate, trust, company, limited liability company,  
joint stock company, firm or other enterprise, association, organization or     
entity.                                                                         

Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.                                                               

  Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,             
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental    
Body.                                                                           

   Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other      
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or    
other government; or (c) governmental or quasi-governmental authority of any    
nature (including any governmental division, department, agency, commission,    
instrumentality, official, organization, unit, body or Entity and any court or  
other tribunal).                                                                

Joint Proxy Statement. "Joint Proxy Statement" shall mean that proxy  
statement to be prepared by OFPI with the cooperation of Spectrum and the       
Company to be filed with the SEC and to be included or incorporated by reference
into the Form S-4 registration statement to be filed by OFPI with the SEC.      

   Knowledge. "Knowledge" shall mean, as it relates to either the Company or
OFPI with respect to any matter in question, that any of the Chief Executive    
Officer, Chief Financial Officer or any other executive officers of the Company 
or OFPI, as the case may be, has actual knowledge of such matter.               

Legal Proceeding. "Legal Proceeding" shall mean any action, suit,     
litigation, arbitration, proceeding (including any civil, criminal,             
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or       
before, or otherwise involving, any court or other Governmental Body or any     
arbitrator or arbitration panel.                                                

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Legal Requirement. "Legal Requirement" shall mean any federal, state, 
local, municipal, foreign or other law, statute, constitution, principle of     
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise  
put into effect by or under the authority of any Governmental Body.             

   Liability. "Liability" shall mean any debt, obligation, duty or liability
of any nature (including any unknown, undisclosed, unmatured, unaccrued,        
unasserted, contingent, indirect, conditional, implied, vicarious, derivative,  
joint, several or secondary liability), regardless of whether such debt,        
obligation, duty or liability would be required to be disclosed on a balance    
sheet prepared in accordance with generally accepted accounting principles and  
regardless of whether such debt, obligation, duty or liability is immediately   
due and payable.                                                                

     Material Adverse Effect. A violation or other matter will be deemed to have
a "Material Adverse Effect" on the Company or OFPI, as the case may be, if such 
violation or other matter would have a material adverse effect on the business, 
condition, assets, liabilities, operations, financial performance or prospects  
of the Company or OFPI, as the case may be.                                     

     OFPI Acquisition Transaction. "OFPI Acquisition Transaction" shall mean any
transaction involving:                                                          

   (a) any sale, lease exchange, transfer or other disposition of the assets
of OFPI constituting more than 10% of the consolidated assets of OFPI or        
accounting for more than 10% of the consolidated revenues of OFPI in any one    
transaction or in a series of related transactions.                             

(b) any offer to purchase, tender offer, exchange offer or any similar
transaction or series of related transactions made by any Person involving more 
than 10% of the outstanding shares of the capital stock of OFPI.                

(c) any merger, consolidation, business combination, share exchange,  
reorganization or other similar transaction or series of related transactions   
involving OFPI.                                                                 

     (d) any assignment, transfer or licensing or other disposition of, in whole
or in part, the OFPI Proprietary Assets, other than in the ordinary course of   
business.                                                                       

  OFPI Comparable Entities. "OFPI Comparable Entities" shall mean Entities
(other than OFPI) that are engaged in businesses similar to OFPI's business.    

   OFPI Contract. "OFPI Contract" shall mean any Contract: (a) to which OFPI
is a party; (b) by which OFPI or any of its assets is or may become bound or    
under which OFPI has, or may become subject to, any obligation; or (c) under    
which OFPI has or may acquire any right or interest.                            

OFPI Disclosure Schedule. "OFPI Disclosure Schedule" shall mean the   
schedule (dated as of the date of the Agreement) delivered to the Company by    
OFPI.                                                                           

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OFPI Indemnitees. "OFPI Indemnitees" shall mean the following Persons:

(a) OFPI;                                                             

 (b) the respective Representatives of the Persons referred to in clause
"(a)"; and                                                                      

 (c) the respective successors and assigns of the Persons referred to in
clauses "(a)" and "(b)" above;                                                  

provided,  however,  that (i) the Company  shall not be entitled to exercise any
rights as an OFPI  Indemnitee  prior to the  Closing,  and (ii) the Persons that
receive any Merger Shares shall not be deemed to be "OFPI Indemnitees."         

     OFPI Proprietary Asset. "OFPI Proprietary Asset" shall mean any Proprietary
Asset owned by or licensed to OFPI or otherwise used by OFPI.                   

  OFPI Triggering Event. A "OFPI Triggering Event" shall be deemed to have
occurred if: (i) the Board of Directors of OFPI shall have failed to recommend, 
or shall for any reason have withdrawn or shall have amended or modified in a   
manner adverse to the Company its unanimous recommendation (not including John  
Battendieri) in favor of, the Merger or approval or adoption of this Agreement; 
(ii) OFPI shall have failed to include in the Joint Proxy Statement the         
unanimous recommendation (not including John Battendieri) of the Board of       
Directors of OFPI in favor of approval and adoption of this Agreement and the   
Merger; (iii) the Board of Directors of OFPI shall have approved, endorsed or   
recommended any Acquisition Proposal; (iv) OFPI shall have entered into any     
letter of intent or similar document or any Contract relating to any Acquisition
Proposal; (v) OFPI shall have failed to hold the OFPI Shareholders' Meeting as  
promptly as practicable and in any event within 45 days after the definitive    
Proxy Statement was filed with the SEC; (vi) a tender or exchange offer relating
to securities of OFPI shall have been commenced and OFPI shall not have sent to 
its securityholders, within five business days after the commencement of such   
tender or exchange offer, a statement disclosing that OFPI recommends rejection 
of such tender or exchange offer; (vii) an Acquisition Proposal is publicly     
announced, and OFPI (A) fails to issue a press release announcing its opposition
to such Acquisition Proposal within five business days after such Acquisition   
Proposal is announced or (B) otherwise fails to actively oppose such Acquisition
Proposal; or (viii) a person or group (as defined in the Exchange Act and the   
rules promulgated thereunder) shall have acquired more than fifty percent (50%) 
of OFPI's voting securities (excluding persons and groups that, as of the date  
of this Agreement, hold more than fifty percent (50%) of OFPI's voting          
securities or that may be deemed to have acquired such percentage upon execution
of the Voting Agreements).                                                      

  Person. "Person" shall mean any individual, Entity or Governmental Body.
Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent       
application, trademark (whether registered or unregistered), trademark          
application, trade name, fictitious business name, service mark (whether        
registered or unregistered), service mark application, copyright (whether       
registered or unregistered), copyright application, maskwork, maskwork          

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application, trade secret, know-how, customer list, franchise, system, computer 
software, source code, computer program, invention, design, blueprint,          
engineering drawing, proprietary product, technology, proprietary right or other
intellectual property right or intangible asset; or (b) right to use or exploit 
any of the foregoing.                                                           

Representatives. "Representatives" shall mean officers, directors,    
employees, agents, attorneys, accountants, advisors and representatives.        

     SEC. "SEC" shall mean the United States Securities and Exchange Commission.

     Superior OFPI Proposal. "Superior OFPI Proposal" shall mean an unsolicited,
bona fide written proposed Acquisition Proposal submitted by a third party that 
the Board of Directors of OFPI determines, in good faith, based upon the written
advice of its financial advisor, to be more favorable from a financial point of 
view to the OFPI's Shareholders than the terms of the Merger; provided, however,
that any such Acquisition Proposal shall not be deemed to be a "Superior OFPI   
Proposal" if any financing required to consummate the transaction contemplated  
by such offer is not committed at the time such Acquisition Proposal is made.   

 Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad  
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including 
any customs duty), deficiency or fee, and any related charge or amount          
(including any fine, penalty or interest), imposed, assessed or collected by or 
under the authority of any Governmental Body.                                   

   Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,            
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any         
Governmental Body in connection with the determination, assessment, collection  
or payment of any Tax or in connection with the administration, implementation  
or enforcement of or compliance with any Legal Requirement relating to any Tax. 

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 EXHIBIT B
DIRECTORS AND OFFICERS OF PARENT

DIRECTORS:                                                                      

Jethren Phillips                                                                

John Battendieri                                                                

Philip Moore                                                                    
To be determined___________                                                     
To be determined___________                                                     

OFFICERS                                                                        

Jethren Phillips                    Chief Executive Officer                     

Richard Bacigalupi                  Chief Financial Officer and Treasurer       

Neil Blomquist                      Secretary                                   

Other executive officers to be determined by OFPI and Spectrum                  

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 EXHIBIT C

 COMPANY TAX REPRESENTATION LETTER

                                                                    May __, 1999

Bosso, Williams, Sachs, Book, Atack         Carr, McClellan, Ingersoll, Thompson
& Gallagher, A Professional Corporation     & Horn, P.C.                        
133 Mission Street, Suite 280               216 Park Road, P.O. Box 513         
P.O. Box 1822                               Burlingame, California 94011        
Santa Cruz, CA  95061                                                           

Re:      Merger pursuant to the Agreement and Plan of Merger and  Reorganization
         (the "Reorganization Agreement") dated May __, 1999, among ORGANIC FOOD
         PRODUCTS,  INC.,  a  California  corporation  ("Acquiror")  and ORGANIC
         INGREDIENTS,  INC., a California  corporation (the "Company"),  and the
         related  Agreement  of Merger  between  Acquiror  and the Company  (the
"Certificate of Merger").                                     

Ladies and Gentlemen:                                                           

This letter is supplied to you in connection with your rendering of opinions    
regarding certain federal income tax consequences of the Merger. Unless         
otherwise indicated, capitalized terms not defined herein have the meanings set 
forth in the Reorganization Agreement. The Reorganization Agreement and the     
Certificate of Merger, including exhibits and schedules attached thereto, are   
collectively referred to as the "Agreements."                                   

After consulting with its counsel and auditors regarding the meaning of and     
factual support for the following representations, the undersigned hereby       
certifies and represents that the following facts are now true and will continue
to be true as of the Effective Time of the Merger and thereafter where relevant:

1. Other than in the ordinary course of business or pursuant to its   
obligations under the Agreements, the Company has made no transfer of any of its
assets (including any distribution of assets with respect to, or in redemption  
of, stock) in contemplation of the Merger or during the period ending on the    
Effective Time of the Merger and beginning with the commencement of negotiations
(whether formal or informal) with Acquiror regarding the Merger (the "Pre-Merger
Period");                                                                       

     2. The Company's principal reasons for participating in the Merger are bona
fide business purposes unrelated to taxes;                                      

3. At the Effective Time of the Merger, the Company will have no      
outstanding equity interests other than those disclosed in Section 2.3 of the   
Reorganization Agreement. At the time of the Merger, except as specified in the 
Reorganization Agreement, the Company will have no outstanding warrants,        
options, or convertible securities or any other type of right outstanding       
pursuant to which any person could acquire shares of capital stock of the       

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Company or any other equity interest in the Company,  other than those disclosed
in Section 2.3 of the Reorganization  Agreement or the Disclosure  Schedule with
respect thereto;                                                                

  4. The total fair market value of all consideration other than shares of
Acquiror Common Stock received by shareholders of the Company in the Merger     
(including, without limitation, cash paid to the Company shareholders perfecting
dissenter's rights or in lieu of fractional shares of Acquiror Common Stock)    
will be less than ten percent (10%) of the aggregate fair market value of shares
of stock of the Company outstanding immediately prior to the Merger;            

    5. The Company intends that Acquiror shall continue the Company's historic
business or use a significant portion of its historic business assets in a      
business following the Merger;                                                  

    6. The liabilities of the Company have been incurred by the Company in the
ordinary course of its business;                                                

 7. The fair market value of the Company's assets will, on the Effective
Time of the Merger, exceed the aggregate liabilities of the Company plus the    
amount of liabilities, if any, to which such assets are subject;                

   8. The Company is not and will not be on the Effective Time of the Merger
an "investment company" within the meaning of Section 368(a)(2)(F)(iii) and (iv)
of the Code;                                                                    

   9. The Company is not and will not be on the Effective Time of the Merger
under the jurisdiction of a court in a Title 11 or similar case within the      
meaning of Section 368(a)(3)(A) of the Code;                                    

    10. The Company has made no extraordinary distributions within the meaning
of Temporary Federal Treasury Regulation Section 1.368-1T(e) with respect to its
stock, prior to and in connection with the Merger;                              

  11. The Company has not redeemed and no "related person" with respect to
the Company, as such term is defined by Treasury Regulation Section             
1.368-1(e)(3), (without regard to Section 1.368-1(e)(3)(i)(A)), has purchased   
any capital stock of the Company prior to and in connection with the Merger;    

    12. The fair market value of the shares of Acquiror Common Stock and other
consideration received by each shareholder of the Company will be approximately 
equal to the fair market value of the shares of stock of the Company surrendered
in exchange therefor and the aggregate consideration received by shareholders of
the Company in exchange for their shares of stock of the Company will be        
approximately equal to the fair market value of all of the outstanding shares of
stock of the Company immediately prior to the Merger;                           

    13. Each of Acquiror, the Company and each shareholder of the Company will
pay separately his, hers or its own expenses relating to the Merger;            

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   14. There is no intercorporate indebtedness existing between Acquiror and
the Company that was issued, acquired, or will be settled at a discount as a    
result of the Merger; Acquiror will assume no liabilities of any shareholder of 
the Company in connection with the Merger;                                      

15. The terms of the Reorganization Agreement and the other agreements
relating thereto are the product of arm's length negotiations;                  

   16. None of the compensation received by any shareholder-employees of the
Company will be separate consideration for, or allocable to, any of their shares
of stock of the Company; none of the shares of Acquiror Common Stock received by
any shareholder-employees of the Company will be separate consideration for, or 
allocable to, any employment agreement or any covenants not to compete; and the 
compensation paid to any shareholder-employees of the Company will be for       
services actually rendered and will be commensurate with amounts paid to third  
parties bargaining at arm's length for similar services;                        

    17. With respect to each instance, if any, in which shares of stock of the
Company have been purchased by a shareholder of Acquiror (a "Shareholder")      
during the Pre-Merger period (a "Stock Purchase"): (i) to the best knowledge of 
the Company, (A) the Stock Purchase was made by such Shareholder on its own     
behalf, rather than as a representative, or for the benefit, of Acquiror, (B)   
the Stock Purchase was entered into solely to satisfy the separate interests of 
such Shareholder and the seller, and (C) the purchase price paid by such        
Shareholder pursuant to the Stock Purchase was the product of arm's length      
negotiations; and (ii) the Stock Purchase was not a formal or informal condition
to consummation of the Merger; and                                              

    18. The Company is authorized to make all of the representations set forth
herein.                                                                         

The undersigned recognizes that (i) your opinions will be based on the          
representations set forth herein and on the statements contained in the         
Agreements and documents related thereto, and (ii) your opinions will be subject
to certain limitations and qualifications including that they may not be relied 
upon if any such representations are not accurate in all material respects.     

The undersigned recognizes that your opinions will not address any tax          
consequences of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.                                           

 Very truly yours,

                                              ORGANIC INGREDIENTS, INC.,
                                            a California corporation

                       By:

 Printed Name:

                          Title:

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 EXHIBIT D

ACQUIROR TAX REPRESENTATION LETTER

                                                                    May __, 1999

Bosso, Williams, Sachs, Book, Atack         Carr, McClellan, Ingersoll, Thompson
& Gallagher, A Professional Corporation     & Horn, P.C.                        
133 Mission Street, Suite 280               216 Park Road, P.O. Box 513         
P.O. Box 1822                               Burlingame, California 94011        
Santa Cruz, CA  95061                                                           

Re:      Merger pursuant to the Agreement and Plan of Merger and  Reorganization
         (the "Reorganization Agreement") dated May __, 1999, among ORGANIC FOOD
         PRODUCTS,  INC.,  a  California  corporation  ("Acquiror")  and ORGANIC
         INGREDIENTS,  INC., a California  corporation (the "Company"),  and the
         related  Agreement  of Merger  between  Acquiror  and the Company  (the
"Certificate of Merger").                                     

Ladies and Gentlemen:                                                           

This letter is supplied to you in connection with your rendering of opinions    
regarding certain federal income tax consequences of the Merger. Unless         
otherwise indicated, capitalized terms not defined herein have the meanings set 
forth in the Reorganization Agreement. The Reorganization Agreement and the     
Certificate of Merger, including exhibits and schedules attached thereto, are   
collectively referred to as the "Agreements."                                   

After consulting with its counsel and auditors regarding the meaning of and     
factual support for the following representations, the undersigned hereby       
certifies and represents that the following facts are now true and will continue
to be true as of the Effective Time of the Merger and thereafter where relevant:

  1. Acquiror's principal reasons for participating in the Merger are bona
fide business purposes not related to taxes;                                    

     2. Except for  transfers  described  in Section  368(a)(2)(C)  of the Code,
Acquiror has no plan or intention to sell,  distribute  or otherwise  dispose of
any of the  assets  acquired  from the  Company in the  transaction,  except for
dispositions made in the ordinary course of business;                           

     3.  Acquiror  intends  that,  following  the Merger,  it will  continue the
Company's  historic  business  or use a  significant  portion  of  its  historic
business assets in a business;                                                  

     4. Acquiror is not an  "investment  company"  within the meaning of Section
368(a)(2)(F)(iii) and (iv) of the Code;                                         

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     5. No  shareholder  of the  Company  is  acting as agent  for  Acquiror  in
connection with the Merger or the approval thereof;  Acquiror will not reimburse
any shareholder of the Company for any stock of the Company such shareholder may
have purchased or for other obligations such shareholder may have incurred;     

     6. Except for  repurchases or redemptions of Acquiror Common Stock that are
consistent  with past practices and pursuant to pre-existing  purchase  programs
that were not  created  or  modified  in  connection  with the  Merger,  neither
Acquiror  nor any  "related  person"  of  Acquiror  (as such term is  defined by
Treasury Regulation Section  1.368-1(e)(3)) will repurchase or redeem any of the
Acquiror  Common  Stock to be  issued  to the  shareholders  of the  Company  in
connection with the Merger;                                                     

     7.  During  the past  five (5)  years,  none of the  outstanding  shares of
capital  stock of the Company,  including  the right to acquire or vote any such
shares have,  directly or  indirectly,  been owned by Acquiror or  affiliates of
Acquiror;                                                                       

     8. The total fair market  value of all  consideration  other than  Acquiror
Common Stock received by shareholders  of the Company in the Merger  (including,
without  limitation,  cash  paid  to  shareholders  of  the  Company  perfecting
dissenter's  rights or in lieu of  fractional  shares of Acquiror  Common Stock)
will be less than ten percent (10%) of the aggregate  fair market value of stock
of the Company outstanding immediately prior to the Merger;                     

     9.  The  fair  market  value  of  the  Acquiror   Common  Stock  and  other
consideration  received by each shareholder of the Company will be approximately
equal to the fair  market  value of the  stock  of the  Company  surrendered  in
exchange therefor,  and the aggregate  consideration received by shareholders of
the Company in exchange  for their  stock of the Company  will be  approximately
equal to the fair market value of all of the outstanding  shares of stock of the
Company immediately prior to the Merger;                                        

     10. Each of Acquiror,  the Company and each shareholder of the Company will
pay separately his, hers or its own expenses relating to the Merger;            

     11. There is no intercorporate  indebtedness  existing between Acquiror and
the  Company  that was  issued,  acquired  or will be settled at a discount as a
result of the Merger, and Acquiror will assume no liabilities of any shareholder
of the Company in connection with the Merger;                                   

     12. The terms of the  Reorganization  Agreement and the agreements  related
thereto are the product of arm's length negotiations;                           

     13. None of the compensation  received by any  shareholder-employee  of the
Company will be separate consideration for, or allocable to, any of their shares
of stock of the Company; none of the shares of Acquiror Common Stock received by
any  shareholder-employee  of the Company will be separate consideration for, or
allocable to, any employment  agreement or any covenants not to compete; and the
compensation paid to any shareholder-employee of the Company will be for        

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services  actually  rendered and will be commensurate with amounts paid to third
parties bargaining at arm's length for similar services;                        

     14. With respect to each instance,  if any, in which shares of stock of the
Company  have been  purchased  by a  shareholder  of Acquiror (a  "Shareholder")
during the period ending on the Effective  Time of the Merger and beginning with
the  commencement  of  negotiations  (whether  formal or informal) with Acquiror
regarding the Merger) (a "Stock  Purchase"):  (i) the Stock Purchase was made by
such  Shareholder not as a representative  of Acquiror;  (ii) the purchase price
paid by such Shareholder pursuant to the Stock Purchase was the product of arm's
length  negotiations,  was not  advanced,  and  will not be  reimbursed,  either
directly or indirectly,  by Acquiror;  (iii) at no time was such  Shareholder or
any other party required or obligated to surrender to Acquiror the capital stock
of the Company acquired in the Stock Purchase,  and neither such Shareholder nor
any other party will be required to surrender  to Acquiror  the Acquiror  Common
Stock for which such shares of stock of the  Company  will be  exchanged  in the
Merger;  and (iv) the Stock  Purchase was not a formal or informal  condition to
consummation of the Merger; and                                                 

     15.  Acquiror is  authorized to make all of the  representations  set forth
herein.                                                                         

The  undersigned  recognizes  that  (i)  your  opinions  will  be  based  on the
representations  set  forth  herein  and  on  the  statements  contained  in the
Agreements and documents related thereto, and (ii) your opinions will be subject
to certain limitations and qualifications  including that they may not be relied
upon if any such representations are not accurate in all material respects.     

The  undersigned   recognize  that  your  opinions  will  not  address  any  tax
consequences of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.                                           

                   Very truly yours,

ORGANIC FOOD PRODUCTS, INC.,
                          a California corporation

     By:

               Printed Name:

        Title:

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 EXHIBIT E

OPINION OF COMPANY COUNSEL

1. Organic Ingredients, Inc. (the "Company") has been duly incorporated and is  
validly existing as a corporation in good standing under the laws of the State  
of California.                                                                  

2. The Company has the requisite  corporate power to own,  operate and lease its
property  and  assets and to  conduct  its  business  as it is  currently  being
conducted.  To our knowledge,  the Company is qualified as a foreign corporation
to do business and is in good standing in each jurisdiction in the United States
in which the  ownership of its property or the conduct of its business  requires
such  qualification  except where the failure to so qualify would not materially
and adversely affect the Company's business,  financial condition and results of
operations, taken as a whole.                                                   

3. All corporate  action on the part of the Company,  its Board of Directors and
its shareholders necessary for the authorization,  execution and delivery of the
Merger Agreement by the Company and the performance of the Company's obligations
under the Merger  Agreement has been taken.  The Merger  Agreement has been duly
and validly  authorized,  executed and delivered by the Company and  constitutes
the valid and binding agreement of the Company  enforceable  against the Company
in accordance with its terms, except as rights to indemnity under section 9.5 of
the Merger  Agreement may be limited by applicable law and except as enforcement
may  be   limited  by   applicable   bankruptcy,   insolvency,   reorganization,
arrangement,  moratorium or other similar laws affecting  creditors' rights, and
subject to general  equity  principles and to  limitations  on  availability  of
equitable relief, including specific performance.                               

4. The authorized capital stock of the Company consists of (i) 100,000 shares of
Common Stock,  no par value,  of which  100,000  shares have been issued and are
outstanding  immediately  prior to the Closing,  and (ii) no shares of Preferred
Stock. To our knowledge,  except as expressly set forth in the Merger  Agreement
(including the Company  Disclosure  Schedule),  there are no options,  warrants,
conversion  privileges,  or other rights  presently  outstanding to purchase any
authorized  but unissued  capital  stock of the Company.  Except for  _________,
there  are no voting  agreements,  co-sale  rights  or  rights of first  refusal
applicable to any of the Company's outstanding capital stock under the Company's
Articles of Incorporation,  Bylaws or any Material Company Contract disclosed in
Part 2.9 and Part 2.11(a) of the Company Disclosure Schedule.                   

5.  The  execution,  delivery  and  performance  by the  Company  of the  Merger
Agreement and the  consummation by the Company of the Merger as provided therein
will not violate any provision of the  Company's  Articles of  Incorporation  or
Bylaws,  and do not constitute a material  default (or give rise to any right of
termination,  cancellation or acceleration)  under any provision of any Material
Company  Contract  disclosed  in  Part  2.9  and  Part  2.11(a)  of the  Company
Disclosure  Schedule  and do not  violate  or  contravene  (A) any  governmental
statute,  rule or regulation  applicable to the Company or (B) any order,  writ,
judgment,  injunction,  decree,  determination  or award which has been  entered
against the Company and of which we are aware, the violation or contravention of
which would have a material adverse effect on the Company's business,  financial
condition and results of operations, taken as a whole.                          

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6. To our knowledge,  there is no action, proceeding or investigation pending or
threatened  in writing  against the Company  before any court or  administrative
agency that questions the validity of the Merger  Agreement or might result in a
material  adverse  change in the  Company's  business,  financial  condition and
results of operations, taken as a whole.                                        

7.  All  consents,  approvals,   authorizations,  or  orders  of,  and  filings,
registrations,  and qualifications with any regulatory authority or governmental
body in the  United  States  required  to be  obtained  prior to the  Closing in
connection with the Company's execution,  delivery and performance of the Merger
Agreement  and the  consummation  by the  Company of the Merger as  contemplated
therein have been made or obtained,  other than the filing of the Certificate of
Merger with the Secretary of State of the State of California as contemplated by
Section 1.3 of the Merger Agreement.                                            

8. The Merger  Agreement  has been duly  authorized  by the  Company's  Board of
Directors and its shareholders and, assuming  compliance by the Company with all
requirements of applicable law and the Merger Agreement  necessary to effect the
Merger,  upon filing of the  Certificate  of Merger with and  acceptance  by the
Secretary of State of the State of California, the Merger will be effective.    

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EXHIBIT F 

COMPANY TAX OPINION 

____________, 1999                                                              

Organic Food Products, Inc.                                                     

---------------------------                                                     

---------------------------                                                     

Ladies and Gentlemen:                                                           

This opinion is being  delivered to you pursuant to Section 8.7 of the Agreement
and  Plan of  Merger  and  Reorganization  dated  as of  _________  , 1999  (the
"Reorganization  Agreement")  by and between  Organic  Food  Products,  Inc.,  a
California corporation ("Acquiror"), and Organic Ingredients, Inc., a California
corporation (the "Company").                                                    

Except as  otherwise  provided,  capitalized  terms used but not defined  herein
shall have the meanings set forth in the Reorganization  Agreement.  All section
references,  unless  otherwise  indicated,  are to the Internal  Revenue Code of
1986, as amended (the "Code").                                                  

We have acted as counsel to the Acquiror in connection with the Merger. As such,
and for the purpose of rendering this opinion, we have examined, and are relying
upon (without any  independent  investigation  or review  thereof) the truth and
accuracy, at all relevant times, of the statements,  covenants,  representations
and warranties  contained in the following documents (including all exhibits and
schedules attached thereto):                                                    

(a) the Reorganization Agreement;                                     

     (b) those certain tax  representation  letters dated  __________,  1999 and
delivered to us by Acquiror and the Company containing  certain  representations
of Acquiror and the Company (the "Tax Representation Letters"); and             

     (c)  such  other  instruments  and  documents  related  to  the  formation,
organization  and  operation  of  Acquiror  and the  Company  and related to the
consummation  of the  Merger  and the  other  transactions  contemplated  by the
Reorganization Agreement as we have deemed necessary or appropriate.            

In  connection  with  rendering  this  opinion,  we have  assumed  (without  any
independent investigation or review thereof) that:                              

     (a) Original documents  submitted to us (including  signatures thereto) are
authentic,  documents  submitted  to  us  as  copies  conform  to  the  original
documents,  and that all such  documents  have been (or will be by the Effective
Time) duly and validly  executed and delivered  where due execution and delivery
are a prerequisite to the effectiveness thereof;                                

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     (b) All  representations,  warranties and  statements  made or agreed to by
Acquiror and the Company, their managements,  employees, officers, directors and
shareholders in connection with the Merger, including, but not limited to, those
set forth in the Reorganization  Agreement  (including the exhibits thereto) and
the Tax Representation Letters are true and accurate at all relevant times;     

     (c) All  covenants  contained in the  Reorganization  Agreement  (including
exhibits  thereto)  and the Tax  Representation  Letters are  performed  without
waiver or breach of any material provision thereof;                             

     (d) The  Merger  will be  reported  by  Acquiror  and the  Company on their
respective  federal income tax returns in a manner  consistent  with the opinion
set forth below;                                                                

     (e) Any  representation  or statement  made "to the best of  knowledge"  or
similarly qualified is correct without such qualification; and                  

     (f) The opinion dated __________,  1999 rendered by Bosso, Williams, Sachs,
Book, Atack & Gallagher, A Professional Corporation, to the Company with respect
to the  qualification  of the Merger as a  reorganization  within the meaning of
Section 368 of the Code has been delivered and has not been withdrawn.          

Based on our examination of the foregoing items and subject to the  limitations,
qualifications,  assumptions and caveats set forth herein, we are of the opinion
that,  for federal  income tax  purposes,  the Merger  will be a  reorganization
within the meaning of Section 368 of the Code.                                  

This  opinion  does  not  address  the  various  state,  local  or  foreign  tax
consequences  that  may  result  from  the  Merger  or  the  other  transactions
contemplated  by the  Reorganization  Agreement.  In  addition,  no  opinion  is
expressed as to any federal  income tax  consequence  of the Merger or the other
transactions contemplated by the Reorganization Agreement except as specifically
set forth herein, and this opinion may not be relied upon except with respect to
the consequences  specifically  discussed  herein. No opinion is expressed as to
the federal income tax treatment  that may be relevant to a particular  investor
in light of personal  circumstances or to certain types of investors  subject to
special treatment under the federal income tax laws (for example, life insurance
companies,  dealers in securities,  taxpayers subject to the alternative minimum
tax,  banks,   tax-exempt   organizations,   non-United   States  persons,   and
shareholders  who acquired their shares of Company capital stock pursuant to the
exercise  of options or  otherwise  as  compensation  or who hold their  Company
capital stock as part of a straddle or risk reduction transaction).             

No opinion is expressed as to any transaction other than the Merger as described
in the Reorganization Agreement, or as to any transaction whatsoever,  including
the Merger, if all of the transactions described in the Reorganization Agreement
are not consummated in accordance with the terms of the Reorganization Agreement

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and without waiver of any material provision thereof.  To the extent that any of
the  representations,  warranties,  statements and  assumptions  material to our
opinion  and upon which we have  relied are not  accurate  and  complete  in all
material respects at all relevant times, our opinion would be adversely affected
and should not be relied upon.                                                  

This  opinion only  represents  our best  judgment as to the federal  income tax
consequences of the Merger and is not binding on the Internal Revenue Service or
any court of law,  tribunal,  administrative  agency or other governmental body.
The  conclusions   are  based  on  the  Code,   existing   judicial   decisions,
administrative regulations and published rulings. No assurance can be given that
future legislative,  judicial or administrative changes or interpretations would
not  adversely   affect  the  accuracy  of  the   conclusions   stated   herein.
Nevertheless,  by rendering  this  opinion,  we undertake no  responsibility  to
advise you of any new developments in the application or  interpretation  of the
federal income tax laws.                                                        

This opinion is being delivered pursuant to the Reorganization  Agreement. It is
intended  solely for the  benefit of the  Company  and may not be relied upon or
utilized  for any  other  purpose  or by any  other  person  and may not be made
available to any other person without our prior written consent.                

Sincerely,                                                                      

Carr, McClellan, Ingersoll, Thompson                                            
& Horn Professional Corporation                                                 

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 EXHIBIT G

 OPINION OF OFPI COUNSEL

1. Organic Food Products, Inc. ("OFPI") has been duly incorporated and is       
validly existing as a corporation in good standing under the laws of the State  
of California.                                                                  

2. OFPI has the requisite corporate power to own, operate and lease its property
and assets and to conduct its business as it is currently  being  conducted.  To
our knowledge,  OFPI is qualified as a foreign corporation to do business and is
in good  standing  in each  jurisdiction  in the  United  States  in  which  the
ownership  of  its  property  or  the  conduct  of its  business  requires  such
qualification  except where the failure to so qualify would not  materially  and
adversely affect OFPI's business, financial condition and results of operations,
taken as a whole.                                                               

3. All  corporate  action on the part of OFPI,  its Board of  Directors  and its
shareholders  necessary  for the  authorization,  execution  and delivery of the
Merger  Agreement by OFPI and the  performance of OFPI's  obligations  under the
Merger  Agreement has been taken. The Merger Agreement has been duly and validly
authorized, executed and delivered by OFPI and constitutes the valid and binding
agreement of OFPI enforceable  against OFPI in accordance with its terms, except
as rights to indemnity under section 9.4 of the Merger  Agreement may be limited
by  applicable  law and  except as  enforcement  may be  limited  by  applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws affecting  creditors'  rights, and subject to general equity principles and
to  limitations  on  availability  of  equitable  relief,   including   specific
performance.                                                                    

4. The  authorized  capital stock of OFPI consists of (i)  20,000,000  shares of
Common Stock, no par value,  of which _________  shares have been issued and are
outstanding immediately prior to the Closing, (ii) 5,000,000 shares of Preferred
Stock,  no par value,  none of which are  outstanding  immediately  prior to the
Closing. To our knowledge, except as expressly set forth in the Merger Agreement
(including  the OFPI  Disclosure  Schedule),  there  are no  options,  warrants,
conversion  privileges,  or other rights  presently  outstanding to purchase any
authorized but unissued capital stock of OFPI. Except for ______________,  there
are no voting  agreements,  co-sale rights or rights of first refusal applicable
to  any  of  OFPI's   outstanding   capital  stock  under  OFPI's   Articles  of
Incorporation, Bylaws or any Material OFPI Contract disclosed in Part 3.9(b) and
Part 3.11(a) of the OFPI Disclosure Schedule.                                   

5. The execution,  delivery and performance by OFPI of the Merger  Agreement and
the  consummation by OFPI of the Merger as provided therein will not violate any
provision of OFPI's Articles of Incorporation or Bylaws, and do not constitute a
material  default  (or give rise to any right of  termination,  cancellation  or
acceleration)  under any provision of any Material  OFPI  Contract  disclosed in
Part 3.9(b) and Part 3.11(a) of the OFPI Disclosure  Schedule and do not violate
or contravene any order, writ, judgment,  injunction,  decree,  determination or
award  which  has been  entered  against  OFPI and of  which we are  aware,  the
violation  or  contravention  of which would have a material  adverse  effect on
OFPI's  business,  financial  condition  and results of  operations,  taken as a
whole.                                                                          

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6. To our knowledge,  there is no action, proceeding or investigation pending or
threatened  in writing  against OFPI before any court or  administrative  agency
that  questions  the  validity  of the  Merger  Agreement  or might  result in a
material adverse change in OFPI's business,  financial  condition and results of
operations, taken as a whole.                                                   

7.  All  consents,  approvals,   authorizations,  or  orders  of,  and  filings,
registrations,  and qualifications with any regulatory authority or governmental
body in the  United  States  required  to be  obtained  prior to the  Closing in
connection  with  OFPI's  execution,  delivery  and  performance  of the  Merger
Agreement and the  consummation  by OFPI of the Merger as  contemplated  therein
have been made or obtained,  other than the filing of the  Certificate of Merger
with the  Secretary  of State of the  State of  California  as  contemplated  by
Section 1.3 of the Merger Agreement.                                            

8. The Merger  Agreement  has been duly  authorized by OFPI's Board of Directors
and its shareholders and,  assuming  compliance by OFPI with all requirements of
applicable  law and the Merger  Agreement  necessary to effect the Merger,  upon
filing of the  Certificate  of Merger with and  acceptance  by the  Secretary of
State of the State of California, the Merger will be effective.                 

2 

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EXHIBIT H 

OFPI TAX OPINION

____________, 1999                                                              

Organic Ingredients, Inc.                                                       

------------------------                                                        

------------------------                                                        

Ladies and Gentlemen:                                                           

This opinion is being delivered to you pursuant to Section 7.8 of the Agreement 
and Plan of Merger and Reorganization dated as of _________ , 1999 (the         
"Reorganization Agreement") by and between Organic Food Products, Inc., a       
California corporation ("Acquiror"), and Organic Ingredients, Inc., a California
corporation (the "Company").                                                    

Except as otherwise provided, capitalized terms used but not defined herein     
shall have the meanings set forth in the Reorganization Agreement. All section  
references, unless otherwise indicated, are to the Internal Revenue Code of     
1986, as amended (the "Code").                                                  

We have acted as counsel to the Company in connection with the Merger. As such, 
and for the purpose of rendering this opinion, we have examined, and are relying
upon (without any independent investigation or review thereof) the truth and    
accuracy, at all relevant times, of the statements, covenants, representations  
and warranties contained in the following documents (including all exhibits and 
schedules attached thereto):                                                    

(a) the Reorganization Agreement;                                     

 (b) those certain tax representation letters dated __________, 1999 and
delivered to us by Acquiror and the Company containing certain representations  
of Acquiror and the Company (the "Tax Representation Letters"); and             

(c) such other instruments and documents related to the formation,    
organization and operation of Acquiror and the Company and related to the       
consummation of the Merger and the other transactions contemplated by the       
Reorganization Agreement as we have deemed necessary or appropriate.            

In connection with rendering this opinion, we have assumed (without any         
independent investigation or review thereof) that:                              

   (a) Original documents submitted to us (including signatures thereto) are
authentic, documents submitted to us as copies conform to the original          
documents, and that all such documents have been (or will be by the Effective   
Time) duly and validly executed and delivered where due execution and delivery  
are a prerequisite to the effectiveness thereof;                                

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 (b) All representations, warranties and statements made or agreed to by
Acquiror and the Company, their managements, employees, officers, directors and 
shareholders in connection with the Merger, including, but not limited to, those
set forth in the Reorganization Agreement (including the exhibits thereto) and  
the Tax Representation Letters are true and accurate at all relevant times;     

(c) All covenants contained in the Reorganization Agreement (including
exhibits thereto) and the Tax Representation Letters are performed without      
waiver or breach of any material provision thereof;                             

(d) The Merger will be reported by Acquiror and the Company on their  
respective federal income tax returns in a manner consistent with the opinion   
set forth below;                                                                

(e) Any representation or statement made "to the best of knowledge" or
similarly qualified is correct without such qualification; and                  

(f) The opinion dated __________, 1999 rendered by Carr, McClellan,   
Ingersoll, Thompson & Horn, P.C. to Acquiror with respect to the qualification  
of the Merger as a reorganization within the meaning of Section 368 of the Code 
has been delivered and has not been withdrawn.                                  

Based on our examination of the foregoing items and subject to the limitations, 
qualifications, assumptions and caveats set forth herein, we are of the opinion 
that, for federal income tax purposes, the Merger will be a reorganization      
within the meaning of Section 368 of the Code.                                  

This opinion does not address the various state, local or foreign tax           
consequences that may result from the Merger or the other transactions          
contemplated by the Reorganization Agreement. In addition, no opinion is        
expressed as to any federal income tax consequence of the Merger or the other   
transactions contemplated by the Reorganization Agreement except as specifically
set forth herein, and this opinion may not be relied upon except with respect to
the consequences specifically discussed herein. No opinion is expressed as to   
the federal income tax treatment that may be relevant to a particular investor  
in light of personal circumstances or to certain types of investors subject to  
special treatment under the federal income tax laws (for example, life insurance
companies, dealers in securities, taxpayers subject to the alternative minimum  
tax, banks, tax-exempt organizations, non-United States persons, and            
shareholders who acquired their shares of Company capital stock pursuant to the 
exercise of options or otherwise as compensation or who hold their Company      
capital stock as part of a straddle or risk reduction transaction).             

No opinion is expressed as to any transaction other than the Merger as described
in the Reorganization Agreement, or as to any transaction whatsoever, including 
the Merger, if all of the transactions described in the Reorganization Agreement
are not consummated in accordance with the terms of the Reorganization Agreement
and without waiver of any material provision thereof. To the extent that any of 

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the representations, warranties, statements and assumptions material to our     
opinion and upon which we have relied are not accurate and complete in all      
material respects at all relevant times, our opinion would be adversely affected
and should not be relied upon.                                                  

This opinion only represents our best judgment as to the federal income tax     
consequences of the Merger and is not binding on the Internal Revenue Service or
any court of law, tribunal, administrative agency or other governmental body.   
The conclusions are based on the Code, existing judicial decisions,             
administrative regulations and published rulings. No assurance can be given that
future legislative, judicial or administrative changes or interpretations would 
not adversely affect the accuracy of the conclusions stated herein.             
Nevertheless, by rendering this opinion, we undertake no responsibility to      
advise you of any new developments in the application or interpretation of the  
federal income tax laws.                                                        

This opinion is being delivered pursuant to the Reorganization Agreement. It is 
intended solely for the benefit of the Company and may not be relied upon or    
utilized for any other purpose or by any other person and may not be made       
available to any other person without our prior written consent.                

Sincerely,                                                                      

Bosso, Williams, Sachs, Book, Atack &                                           
Gallagher, A Professional Corporation                                           

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                                                                         ANNEX B

================================================================================

 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION

 by and between:

 ORGANIC FOOD PRODUCTS, INC.
 a California corporation; and

SPECTRUM NATURALS, INC.,
a California corporation

 ---------------------------

May 14, 1999
 ---------------------------

================================================================================

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TABLE OF CONTENTS 

                                                                      PAGE

SECTION 1. DESCRIPTION OF TRANSACTION......................................1    

     1.1      Merger of the Company into OFPI..........................1

     1.2      Effect of the Merger.....................................1

     1.3      Closing; Effective Time..................................1

1.4      Articles of Incorporation and Bylaws;                
              Directors and Officers...................................2

     1.5      Conversion of Shares.....................................2

     1.6      Closing of the Company's Transfer Books..................4

     1.7      Exchange of Certificates.................................4

     1.8      Dissenting Shares........................................5

     1.9      Tax Consequences.........................................5

     1.10     Accounting Treatment.....................................5

     1.11     Further Action...........................................6

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPAN....................6    

     2.1      Due Organization; No Subsidiaries; Etc...................6

     2.2      Articles of Incorporation and Bylaws; Records............6

     2.3      Capitalization...........................................6

     2.4      Financial Statements.....................................7

     2.5      Absence of Changes.......................................7

     2.6      Title to Assets..........................................9

     2.7      Accounts Receivable; Loans and Advances.................10

     2.8      Inventory...............................................10

     2.9      Equipment; Leasehold....................................10

     2.10     Proprietary Assets......................................11

     2.11     Contracts...............................................12

     2.12     No Undisclosed Liabilities..............................13

     2.13     Compliance with Legal Requirements......................14

     2.14     Governmental Authorizations.............................14

     2.15     Tax Matters.............................................14

     2.16     Employee and Labor Matters; Benefit Plans...............14

     2.17     Environmental Matters...................................17

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                                                                    PAGE

     2.18     Sale of Products; Performance of Services...............17

     2.19     Insurance...............................................18

     2.20     Related Party Transactions..............................18

     2.21     Legal Proceedings; Orders...............................19

     2.22     Authority; Binding Nature of Agreement..................19

     2.23     Non-Contravention; Consents.............................20

     2.24     Vote Required...........................................20

     2.25     Company Action..........................................21

     2.26     Full Disclosure.........................................21

     2.27     Finder's Fee............................................21

SECTION 3. REPRESENTATIONS AND WARRANTIES OF OFPI.........................21    

     3.1      Due Organization, Etc...................................22

     3.2      Articles of Incorporation and Bylaws; Records...........22

     3.3      Capitalization, Etc.....................................22

     3.4      SEC Filings; Financial Statements.......................23

     3.5      Absence of Changes......................................24

     3.6      Title to Assets.........................................26

     3.7      Accounts Receivable; Loans and Advances.................26

     3.8      Inventory...............................................26

     3.9      Equipment; Leasehold....................................27

     3.10     Proprietary Assets......................................27

     3.11     Contracts...............................................28

     3.12     No Undisclosed Liabilities..............................30

     3.13     Compliance with Legal Requirements......................30

     3.14     Governmental Authorizations.............................30

     3.15     Tax Matters.............................................30

     3.16     Employee and Labor Matters; Benefit Plans...............31

     3.17     Environmental Matters...................................33

     3.18     Sale of Products; Performance of Services...............34

     3.19     Insurance...............................................34

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     3.20     Related Party Transactions..............................35

     3.21     Legal Proceedings; Orders...............................35

     3.22     Authority; Binding Nature of Agreement..................35

     3.23     Non-Contravention; Consents.............................36

     3.24     Vote Required...........................................36

     3.25     OFPI Action.............................................37

     3.26     Full Disclosure.........................................37

     3.27     Finder's Fee............................................37

SECTION 4. ERTAIN COVENANTS OF THE COMPANY................................37    

     4.1      Access and Investigation................................37

     4.2      Operation of the Company's Business.....................38

     4.3      Notification; Updates to Company Disclosure Schedule....39

     4.4      No Solicitation.........................................40

     4.5      Company Shareholders' Meeting...........................41

     4.6      Tax Representation Letters..............................42

SECTION 5. CERTAIN COVENANTS OF OFPI......................................42    

     5.1      Access and Investigation................................42

     5.2      Operation of OFPI's Business............................42

     5.3      Notification; Updates to OFPI Disclosure Schedule.......44

     5.4      No Solicitation.........................................45

     5.5      OFPI Shareholders' Meeting..............................46

     5.6      Tax Representation Letters..............................47

SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES............................47    

     6.1      Filings and Consents....................................47

     6.2      Public Announcements....................................47

     6.3      Reasonable Efforts......................................47

     6.4      Registration Statement..................................47

     6.5      Additional Agreements...................................48

     6.6      Regulatory Approvals....................................49

     6.7      Indemnification.........................................49

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                                                                      PAGE

SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OFPI....................50    

     7.1      Accuracy of Representations.............................50

     7.2      Performance of Covenants................................50

     7.3      Effectiveness of Registration Statement.................50

     7.4      Compliance Certificate..................................50

     7.5      Shareholder Approval....................................50

     7.6      Consents................................................50

     7.7      Legal Opinion...........................................50

     7.8      Tax Opinion.............................................50

     7.9      No Restraints...........................................51

     7.10     HSR Act.................................................51

     7.11     Acquisition of Spectrum Commodities, Inc................51

     7.12     Satisfactory Completion of Pre-Merger Review............51

SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.............51    

     8.1      Satisfactory Completion of Pre-Merger Review............51

     8.2      Accuracy of Representations.............................51

     8.3      Performance of Covenants................................51

     8.4      Effectiveness of Registration Statement.................51

     8.5      Compliance Certificate..................................52

     8.6      Shareholder Approval....................................52

     8.7      Consents................................................52

     8.8      Legal Opinion...........................................52

     8.9      Tax Opinion.............................................52

     8.10     No Restraints...........................................52

     8.11     HSR Act.................................................52

     8.12     Resignations of Certain Directors.......................52

     8.13     Acquisition of Organic Ingredients, Inc.................52

     8.14     Shareholder Lock-up Agreements..........................52

     8.15     Employment Agreements...................................53

     8.16     Refinancing of Existing Debt............................53

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     8.17     Dissenters' Rights......................................53

SECTION 9. TERMINATION AND INDEMNIFICATION................................53    

     9.1      Termination.............................................53

     9.2      Effect of Termination...................................54

     9.3      Fees and Expenses; Termination Fees.....................54

     9.4      Indemnification by OFPI.................................55

     9.5      Indemnification by the Company..........................56

     9.6      Threshold...............................................56

     9.7      Maximum Liability.......................................57

     9.8      Calculation of Indemnification Payments.................57

SECTION 10. MISCELLANEOUS PROVISIONS......................................57    

     10.1     Survival of Representations and Warranties..............57

     10.2     Further Assurances......................................57

     10.3     Attorneys' Fees.........................................57

     10.4     Notices.................................................58

     10.5     Time of the Essence.....................................58

     10.6     Governing Law; Venue....................................59

     10.7     Successors and Assigns..................................59

     10.8     Remedies Cumulative; Specific Performance...............59

     10.9     Waiver..................................................59

     10.10    Amendments..............................................59

     10.11    Severability............................................59

     10.12    Parties in Interest.....................................59

     10.13    Disclosure Schedules....................................60

     10.14    Entire Agreement........................................60

     10.15    Construction............................................60

     10.16    Headings................................................60

     10.17    Counterparts............................................60

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EXHIBITS

Exhibit A            -         Certain Definitions                          

Exhibit B            -         Restated Articles                            

Exhibit C            -         Directors and Officers of OFPI               

Exhibit D            -         Bylaws of OFPI                               

Exhibit E            -         Certain OFPI Shareholders                    

Exhibit F            -         Company Tax Representation Letter            

Exhibit G            -         OFPI Tax Representation Letter               

Exhibit H            -         Form of Cooley Godward LLP Legal Opinion     

Exhibit I            -         Form of Cooley Godward LLP Tax Opinion       

Exhibit J            -         Form of Carr, McClellan Legal Opinion        

Exhibit K            -         Form of Carr, McClellan Tax Opinion          

Exhibit L            -         Resignations of Certain Directors            

  Exhibit M            -         Certain Persons Subject to Lock-Up Restrictions

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AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION

     THIS AGREEMENT AND PLAN OF MERGER AND REORGANIZATION  ("Agreement") is made
and entered into as of May 14, 1999, by and between ORGANIC FOOD PRODUCTS, INC.,
a California  corporation  ("OFPI"),  and SPECTRUM NATURALS,  INC., a California
corporation (the "Company").  Certain  capitalized  terms used in this Agreement
are defined in the attached Exhibit A.                                          

RECITALS

     A. OFPI and the Company  intend to effect a merger of the Company  with and
into OFPI (the  "Merger") in accordance  with this  Agreement and the California
General  Corporation  Law (the "CGCL").  Upon  consummation  of the Merger,  the
Company  will  cease  to  exist,   and  OFPI  will  continue  as  the  surviving
corporation.                                                                    

     B. It is  intended  that the Merger  qualify  as a tax-free  reorganization
within the meaning of Section  368(a) of the Internal  Revenue Code of 1986,  as
amended (the "Code"). For accounting purposes, it is intended that the Merger be
treated as a purchase by the Company of OFPI.                                   

     C. This Agreement has been adopted and approved by the respective boards of
directors of OFPI and the Company.                                              

 AGREEMENT

     The parties to this  Agreement,  intending  to be legally  bound,  agree as
follows:                                                                        

SECTION 1. DESCRIPTION OF TRANSACTION.                                          

     1.1  Merger of the  Company  into OFPI.  Upon the terms and  subject to the
conditions  set forth in this  Agreement,  at the Effective  Time (as defined in
Section 1.3),  the Company shall be merged with and into OFPI,  and the separate
existence  of the Company  shall  cease.  OFPI will  continue  as the  surviving
corporation in the Merger (the "Surviving Corporation").                        

     1.2 Effect of the  Merger.  The Merger  shall have the effects set forth in
this Agreement and in the applicable provisions of the CGCL.                    

     1.3  Closing;   Effective  Time.  The   consummation  of  the  transactions
contemplated by this Agreement (the  "Closing")  shall take place at the offices
of Cooley Godward LLP, One Maritime Plaza, 20th Floor, San Francisco, California
94111 at a time and on a date which shall be promptly (but not more than two (2)
days  following)  the  satisfaction  or  waiver of the  conditions  set forth in
Sections 7 and 8 (the "Closing Date").  Contemporaneously with or as promptly as
practicable after the Closing,  a properly executed  agreement or certificate of
merger  conforming to the requirements of the CGCL (the "Certificate of Merger")
shall be filed  with the  Secretary  of State of the  State of  California.  The
Merger shall take effect at the time the Certificate of Merger is filed with and
accepted by the  Secretary of State of the State of California  (the  "Effective
Time").                                                                         

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     1.4 Articles of Incorporation  and Bylaws;  Directors and Officers.  Unless
otherwise determined by the Company prior to the Effective Time:                

          (a)  effective on or promptly  following  the  Effective  Time, by the
filing of Amended and Restated  Articles of Incorporation  with the Secretary of
State of the State of  California  or as otherwise  permitted by the CGCL,  OFPI
shall (i) amend its Articles of  Incorporation  to change its name from "Organic
Food Products,  Inc." to "Spectrum  Organic  Products,  Inc." and (ii) make such
other changes as set forth in the Amended and Restated Articles of Incorporation
attached hereto as Exhibit B (the "Restated Articles");                         

          (b) the directors and officers of OFPI immediately after the Effective
Time shall be the individuals identified on the attached Exhibit C; and         

          (c) the Bylaws of OFPI  shall be as set forth in the  Bylaws  attached
hereto as Exhibit D.                                                            

1.5 Conversion of Shares.                                             

          (a) Subject to Section 1.7(b) and Section 1.8, at the Effective  Time,
by virtue of the Merger and without any further  action on the part of OFPI, the
Company or any  shareholder  of the Company,  each share of Company Common Stock
(as defined in Section 2.3) outstanding  immediately prior to the Effective Time
shall be converted into the Applicable Multiple (as defined below) of fully paid
and  non-assessable  shares (the  "Shares")  of OFPI Common Stock (as defined in
Section 3.3).                                                                   

(b) For purposes of this Agreement:                         

               (i) the term  "Applicable  Multiple"  shall mean a  fraction  the
numerator of which is the number of Merger Shares and the  denominator  of which
is the number of Company Shares;                                                

               (ii) the term  "Company  Shares"  shall  mean (A) the  number  of
shares of Company Common Stock  outstanding  immediately  prior to the Effective
Time plus (B) the maximum  number of shares of Company  Common Stock  underlying
instruments  convertible  into or exchangeable for Company Common Stock (without
regard to vesting or similar restrictions)  outstanding immediately prior to the
Effective Time; and                                                             

               (iii) the term  "Merger  Shares"  shall  mean the  shares of OFPI
Common Stock to be issued to the Company Shareholders in the Merger and shall be
equal to the sum of:                                                            

     (1)  the product of (A) three (3) multiplied by (B) the number of shares of
          OFPI Common Stock outstanding  immediately prior to the Effective Time
          (including  shares of OFPI  Common  Stock  issued  pursuant to the "OI
          Acquisition,"  as that term is defined in Section 8.13,  and including
          adjustments  for  shares  of OFPI  Common  Stock  that  are  cancelled
          pursuant to OFPI's  transaction  with Sunny Farms  Corp.),  reduced by
450,000 shares of OFPI Common Stock; plus                   

2.

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     (2)  three (3) shares  for each  share of OFPI  Common  Stock  issued  upon
          exercise,  in accordance  with their terms, of any and all warrants or
          options to purchase  OFPI Common Stock  outstanding  as of the Closing
Date; plus                                                  

  (3)  any "Additional Shares," as that term is defined in Section 1.5(e).

     (c) At the Effective  Time, all rights with respect to Company Common Stock
under  Company  Options that are then  outstanding  shall be converted  into and
become  rights with  respect to OFPI Common  Stock,  and OFPI shall  assume each
Company Option in accordance with the terms (as in effect as of the date hereof)
of the  stock  option  plan  under  which it was  issued  and the  stock  option
agreement by which it is evidenced.  From and after the Effective Time, (i) each
Company Option assumed by OFPI may be exercised solely for shares of OFPI Common
Stock,  (ii) the number of shares of OFPI Common  Stock  subject to each Company
Option shall be equal to the number of shares of Company Common Stock subject to
such Company Option  immediately  prior to the Effective Time  multiplied by the
Applicable  Multiple,  rounding down to the nearest  whole share,  (iii) the per
share  exercise  price  under each such  Company  Option  shall be  adjusted  by
dividing  the per share  exercise  price under each such  Company  Option by the
Applicable Multiple and rounding up to the nearest cent and (iv) any restriction
on the exercise of any Company  Option  shall  continue in full force and effect
and the term,  exercisability,  vesting  schedule and other  provisions  of such
Company Option shall otherwise remain unchanged;  provided,  however,  that each
such Company Option shall,  in accordance  with its terms, be subject to further
adjustment  as  appropriate  to  reflect  any  stock  split,   stock   dividend,
subdivision,  reclassification,  reorganization,  stock  split,  combination  or
similar transaction subsequent to the Effective Time. The Company shall take all
action that may be necessary  (under the stock  option plan or other  agreements
pursuant to which Company Options are  outstanding) to effectuate the provisions
of this Section  1.5(c) and to ensure that,  from and after the Effective  Time,
holders of Company  Options have no rights with respect thereto other than those
specifically  provided herein.  OFPI shall file with the SEC, no later than five
(5) business days after  Effective  Time, a  registration  statement on Form S-8
relating to the shares of OFPI Common Stock issuable with respect to the Company
Options  assumed by OFPI in accordance  with this Section  1.5(c).  This Section
1.5(c) will survive the  consummation  of the Merger and the Effective  Time, is
intended to benefit and may be enforced by each of the persons who hold  Company
Options  and will be  binding  on all  successors  and  assigns  of OFPI and the
Surviving Corporation.                                                          

     (d) If any shares of Company Common Stock outstanding  immediately prior to
the Effective Time are unvested or are subject to a repurchase  option,  risk of
forfeiture or other  condition  under any applicable  restricted  stock purchase
agreement  or other  agreement  with the Company,  then  (unless such  condition
terminates  by  virtue  of the  Merger  pursuant  to the  express  terms of such
agreement) the shares of OFPI Common Stock issued in exchange for such shares of
Company  Common Stock will also be unvested  and subject to the same  repurchase
option, risk of forfeiture or other condition, and the certificates representing
such  shares of OFPI Common  Stock may  accordingly  be marked with  appropriate
legends. The Company shall take all action that may be necessary to ensure that,
from and after  the  Effective  Time,  OFPI is  entitled  to  exercise  any such
repurchase option or other right set forth in any such restricted stock purchase
agreement or other agreement.                                                   

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     (e) The  number of Merger  Shares  determined  in Section  1.5(b)  shall be
adjusted  such that OFPI  shall  issue to the  Company  Shareholders  additional
shares of OFPI Common Stock, subject to Section 1.7(b), as determined as follows
(collectively, the "Additional Shares"):                                        

               in the event  that the  Applicable  Price (as  defined in Section
1.10, and as may later be adjusted by the parties)  exceeds $0.75 per share (the
"Baseline Price"),  then for each $0.01 per share above the Baseline Price, OFPI
shall  issue  189,000  additional  shares of OFPI  Common  Stock to the  Company
Shareholders;  provided  that any such  Additional  Shares issued to the Company
Shareholders,  together  with the Merger Shares  calculated  pursuant to Section
1.5(b)(iii),  shall not exceed eighty percent (80%) of the  outstanding  capital
stock of OFPI following the  consummation  of the  transactions  contemplated in
this Agreement,  including all outstanding options,  warrants or other rights to
acquire capital stock of OCLI.                                                  

     1.6 Closing of the Company's Transfer Books. At the Effective Time, (a) all
certificates representing shares of Company Common Stock outstanding immediately
prior to the  Effective  Time shall  automatically  be canceled  and retired and
shall cease to exist,  and all holders of  certificates  representing  shares of
Company Common Stock that were  outstanding  immediately  prior to the Effective
Time shall cease to have any rights as shareholders of the Company,  and (b) the
stock  transfer  books of the Company shall be closed with respect to all shares
of such Company  Common Stock  outstanding  immediately  prior to the  Effective
Time.  No further  transfer of any such shares of Company  Common Stock shall be
made on such stock  transfer  books  after the  Effective  Time.  If,  after the
Effective Time, a valid certificate  previously  representing any of such shares
of Company  Common Stock (a "Company Stock  Certificate")  is presented to OFPI,
such  Company  Stock  Certificate  shall be canceled  and shall be  exchanged as
provided in Section 1.7.                                                        

1.7 Exchange of Certificates.                                         

          (a)  Exchange  Procedures.  At or as soon  as  practicable  after  the
Closing, the holders of Company Common Stock shall surrender their Company Stock
Certificates  in exchange  for  certificates  representing  OFPI  Common  Stock,
pursuant to this Agreement.  Subject to Section 1.7(b), upon such surrender of a
Company Stock  Certificate  for  exchange,  (1) the holder of such Company Stock
Certificate  shall be  entitled to receive in  exchange  therefor a  certificate
representing  the number of shares of OFPI Common Stock that such holder has the
right to  receive  pursuant  to Section  1.5(a)(i),  and (2) the  Company  Stock
Certificate so surrendered shall be canceled.  Until surrendered as contemplated
by this Section 1.7(a), each Company Stock Certificate shall be deemed, from and
after the Effective  Time, to represent only the right to receive shares of OFPI
Common Stock (and cash in lieu of any  fractional  share of OFPI Common Stock as
contemplated  by Section  1.7(b)),  pursuant to this  Agreement.  If any Company
Stock Certificate shall have been lost, stolen or destroyed,  OFPI shall issue a
certificate  representing OFPI Common Stock with respect to such lost, stolen or
destroyed  Company Stock  Certificate  in accordance  with this  Agreement  upon
delivery  by  the  owner  of  such  lost,  stolen  or  destroyed  Company  Stock
Certificate to OFPI of an appropriate  affidavit as indemnity  against any claim
that may be made against OFPI with respect to such Company Stock Certificate.   

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          (b) Fractional Shares. No fractional shares of OFPI Common Stock shall
be  issued in  connection  with the  Merger,  and no  certificates  for any such
fractional shares shall be issued. In lieu of such fractional shares, any holder
of Company Common Stock who would otherwise be entitled to receive a fraction of
a share of OFPI Common Stock (after  aggregating  all fractional  shares of OFPI
Common Stock  issuable to such holder)  shall,  upon  surrender of such holder's
Company Stock Certificate(s),  be paid in cash the dollar amount (rounded to the
nearest whole cent),  without interest,  determined by multiplying such fraction
by the Designated OFPI Stock Price.  The "Designated  OFPI Stock Price" shall be
the closing  sales  price of one share of OFPI  Common  Stock as reported on the
Nasdaq Small Cap Market on the Closing Date, or if not so reported,  as reported
on the electronic bulletin board as of such date.                               

          (c) No  Liability.  OFPI  shall not be liable to any  holder or former
holder of Company Common Stock for any shares of OFPI Common Stock (or dividends
or distributions  with respect thereto),  or for any cash amounts,  delivered to
any public official pursuant to any applicable  abandoned  property,  escheat or
similar law.                                                                    

     1.8 Dissenting Shares.  Notwithstanding  anything to the contrary contained
in this Agreement,  any shares of Company Common Stock  outstanding  immediately
prior to the  Effective  Time that were not voted in favor of the Merger and are
held by shareholders who have complied with the applicable provisions of Chapter
13 of the  CGCL  (the  "Dissenting  Shares")  shall  not be  converted  into  or
represent  the right to receive OFPI Common Stock in  accordance  with  Sections
1.5(a)(i)  and  1.5(a)(ii),  as the case  may be (or cash in lieu of  fractional
shares in accordance with Section 1.7(b)),  and each holder of Dissenting Shares
shall be entitled  only to such  rights as may be granted to such  holder  under
Chapter  13 of the  CGCL.  From and  after  the  Effective  Time,  a  holder  of
Dissenting  Shares  shall not have and shall not be entitled to exercise  any of
the voting  rights or other rights of a  shareholder  of OFPI.  If any holder of
Dissenting  Shares  shall fail to assert or perfect,  or shall  waive,  rescind,
withdraw or otherwise  lose,  such holder's  right to dissent and obtain payment
under Chapter 13 of the CGCL, then such shares shall  automatically be converted
into and shall  represent  only the right to  receive  (upon  the  surrender  of
Company Stock  Certificate(s)  previously  representing such shares) OFPI Common
Stock in accordance  with Section  1.5(a)(i) (and cash in lieu of any fractional
share in accordance with Section 1.7(b)).                                       

     1.9 Tax  Consequences.  For  federal  income  tax  purposes,  the Merger is
intended to constitute a reorganization  within the meaning of Section 368(a) of
the Code. The parties to this  Agreement  hereby adopt this Agreement as a "plan
of reorganization"  within the meaning of Sections  1.368-2(g) and 1.368-3(a) of
the United States Treasury Regulations.                                         

     1.10 Accounting Treatment.  For accounting purposes, the Merger is intended
to be treated as a purchase. For purposes of determining the purchase price, the
price per share  shall be  $0.7083,  which is the  average of the  closing  sale
prices per share of OFPI's Common Stock as traded on the Nasdaq Small Cap Market
on the three (3) trading days immediately  preceding February 19, 1999, the date
the terms of the  transaction  were first publicly  announced  (the  "Applicable
Price").                                                                        

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     1.11 Further Action.  If, at any time after the Effective Time, any further
action is  determined  by OFPI to be necessary to carry out the purposes of this
Agreement or to vest OFPI with full right,  title and  possession  of and to all
rights and property of the Company,  the officers and directors of OFPI shall be
fully authorized, in the name of the Company and otherwise) to take such action.

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.                       

          The Company  represents and warrants to OFPI that, except as set forth
in the  disclosure  schedule  prepared  by the  Company in  accordance  with the
requirements of Section 10.13 and that has been delivered by the Company to OFPI
on the date of this Agreement (the "Company Disclosure Schedule"):              

2.1 Due Organization; No Subsidiaries; Etc.                           

          (a)  Each of the  Company  and  each  subsidiary  of the  Company  are
corporations  duly  organized,  validly  existing and in good standing under the
laws of their  respective  jurisdictions  of  incorporation  with full corporate
power and  authority:  (i) to conduct  its  business  in the manner in which its
business  is  currently  being  conducted  (ii) to own and use its assets in the
manner in which its assets are currently owned and used and (iii) to perform its
obligations  under all  Contracts  by which is its  bound.  The  Company  has no
subsidiaries  other than the  subsidiaries  disclosed in Part 2.1 of the Company
Disclosure  Schedule,  which,  for the purposes of this Section 2, shall include
"SCI" (as defined in Section 7.11) (collectively, the "Company Subsidiaries").  

          (b) The Company and the Company  Subsidiaries  maintain  facilities or
employees  in  each  state  listed  in Part  2.1(b)  of the  Company  Disclosure
Schedule.  The Company  and each  Company  Subsidiary  is duly  qualified  to do
business  corporation and is in good standing in each  jurisdiction in which the
failure to be so qualified  would have a Material  Adverse Effect on the Company
or on the ability of the Company to  consummate  the  transactions  contemplated
hereby.                                                                         

     2.2  Articles  of  Incorporation  and  Bylaws;  Records.  The  Company  has
delivered  or made  available to OFPI  accurate and complete  copies of: (1) the
Company's articles of incorporation and bylaws as currently in effect, including
all  amendments  thereto;  (2) the stock  records  of the  Company;  and (3) the
minutes and other records of the meetings and other  proceedings  (including any
actions  taken by  written  consent  or  otherwise  without  a  meeting)  of the
shareholders  of the  Company,  the Board of  Directors  of the  Company and all
committees  of the Board of  Directors  of the  Company.  The  Company is not in
violation of any of the provisions of its articles of  incorporation  or bylaws.
The books of  account,  stock  records,  minute  books and other  records of the
Company are  accurate  and  complete  in all  material  respects,  and have been
maintained in accordance with prudent business practices.                       

     2.3  Capitalization.  The authorized  capital stock of the Company consists
of:  100,000  shares of Common Stock,  no par value per share  ("Company  Common
Stock"),  of which 5,000 shares have been issued and are  outstanding  as of the
date hereof.  Part 2.3 of the Company Disclosure  Schedule sets forth, as of the
date hereof, the names of the Company's shareholders and the number of shares of

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Company  Common Stock owned of record by each of such  shareholders.  All of the
outstanding shares of Company Common Stock have been duly authorized and validly
issued,  and are  fully  paid and  non-assessable,  and none of such  shares  is
subject  to  any  repurchase  option  or  restriction  on  transfer  other  than
restrictions  imposed  by  federal  or  state  securities  laws and  other  than
repurchase  options  exercisable by the Company upon  termination of employment.
Part  2.3 of  the  Company  Disclosure  Schedule,  sets  forth  all  outstanding
subscriptions,  options,  calls,  warrants  or  other  rights  (whether  or  not
currently  exercisable)  to  acquire  any shares of the  capital  stock or other
securities of the Company.  All outstanding  shares of Company Common Stock have
been  issued  in  compliance  with all  applicable  securities  laws  and  other
applicable  Legal  Requirements.  Except as set forth in Part 2.3 of the Company
Disclosure  Schedule,  the Company has never repurchased,  redeemed or otherwise
reacquired any shares of its capital stock or other  securities.  Other than the
irrevocable  proxies set forth in Part 2.3 of the Company  Disclosure  Schedule,
there are no preemptive or similar rights with respect to the Company's  capital
stock. There is no Company Contract (or, to the Company's  knowledge,  any other
agreement or  arrangement  to which the Company is not a party)  relating to the
voting or registration of, or restricting any Person from  purchasing,  selling,
pledging or otherwise disposing of (or granting any option or similar right with
respect to), any shares of Company Common Stock.  There is no shareholder rights
plan (or similar plan commonly referred to as a "poison pill") or Contract under
which Company is or may become  obligated to sell or otherwise  issue any shares
of its capital stock or any other securities.                                   

2.4 Financial Statements.                                             

          (a)  The  Company  has  delivered  to  OFPI  the  following  financial
statements and notes  (collectively,  the "Company Financial  Statements"):  the
audited balance sheets of the Company as of December 31, 1998, December 31, 1997
and December 31, 1996, and the related audited statements of income,  statements
of  shareholders'  equity and  statements  of cash flows of the  Company for the
years then ended,  together with the notes thereto and the unqualified report of
an independent auditor relating thereto; and                                    

          (b) The Company  Financial  Statements  present  fairly the  financial
position of the Company as of the  respective  dates  thereof and the results of
operations and cash flows of the Company for the periods  covered  thereby.  The
Company  Financial  Statements  have been prepared in accordance  with generally
accepted  accounting  principles  applied on a consistent  basis  throughout the
periods covered.                                                                

     2.5  Absence of  Changes.  Except as  described  in Part 2.5 of the Company
Disclosure Schedule, since December 31, 1998 through the date of this Agreement:

          (a) there has not been any material  adverse  change in the  business,
condition,  assets,  liabilities,  operations  or financial  performance  of the
Company  or  any of the  Company  Subsidiaries,  and,  to the  knowledge  of the
Company,  no event has  occurred  that could  reasonably  be  expected to have a
Material Adverse Effect on the Company and its subsidiaries taken as a whole;   

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          (b) there has not been any loss,  damage or  destruction to any of the
assets of the Company or any of the Company Subsidiaries (whether or not covered
by  insurance)  that could  reasonably  be expected  to have a Material  Adverse
Effect on the Company;                                                          

          (c)  neither the Company  nor any  Company  Subsidiary  has  declared,
accrued,  set  aside  or  paid  any  dividend,   stock  split,   combination  or
reclassification  or made any other  distribution  in  respect  of any shares of
capital stock nor has repurchased,  redeemed or otherwise  reacquired any shares
of capital stock or other securities;                                           

          (d) neither the Company nor any Company Subsidiary has sold, issued or
authorized the issuance of (i) any capital stock or other  security  (except for
Company Common Stock issued upon the exercise of outstanding  Company  Options),
(ii) any option,  call,  warrant or right to acquire,  or otherwise relating to,
any capital stock or any other security (except for Company Options described in
Part  2.3  of  the  Company  Disclosure  Schedule),   or  (iii)  any  instrument
convertible into or exchangeable for any capital stock or other security;       

          (e) there has been no  amendment to the  articles of  organization  or
bylaws of the Company or any Company Subsidiary, and neither the Company nor any
Company  Subsidiary  has  effected  or been a party to any  Company  Acquisition
Transaction, recapitalization,  reclassification of shares, stock split, reverse
stock split or similar transaction;                                             

          (f) neither the  Company  nor any  Company  Subsidiary  has amended or
waived any of its rights under,  or permitted the  acceleration of vesting under
(i) any provision of any agreement evidencing any outstanding Company Option, or
(ii) any restricted stock purchase agreement;                                   

          (g) neither the  Company  nor any  Company  Subsidiary  has formed any
subsidiary or acquired any equity interest in any other Entity;                 

          (h)  neither  the  Company  nor any  Company  Subsidiary  has made any
capital  expenditure  which,  when added to all other capital  expenditures made
since December 31, 1998, exceeds $25,000 in the aggregate;                      

          (i) neither the  Company  nor any Company  Subsidiary  has (i) entered
into any  Material  Company  Contract (as defined in Section  2.11(a)),  or (ii)
amended or prematurely terminated, or waived any material right or remedy under,
any  Material  Company  Contract to which it is or was a party or under which it
has or had any material rights or obligations;                                  

          (j) neither the Company nor any Company  Subsidiary  has (i) acquired,
leased or licensed any right or other asset from any other Person,  (ii) sold or
otherwise  disposed of, or leased or  licensed,  any right or other asset to any
other Person, or (iii) waived or relinquished any right, except for purchases of
inventory  and sales of products in the  ordinary  course of business and except
for immaterial rights or other immaterial assets acquired,  leased,  licensed or
disposed of in the ordinary course of business and consistent with the Company's
past practices;                                                                 

          (k) neither the Company nor any Company  Subsidiary has written off as
uncollectible,  or established  any  extraordinary  reserve with respect to, any
account  receivable or other  indebtedness  in excess of $5,000  individually or
$25,000 in the aggregate;                                                       

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          (l) neither the Company nor any Company Subsidiary has made any pledge
of any of its assets or otherwise  permitted any of its assets to become subject
to any  Encumbrance,  except for  pledges  of assets  valued at $25,000 or less,
individually  or in the aggregate,  made in the ordinary  course of business and
consistent with the Company's past practices;                                   

          (m) neither the Company nor any Company  Subsidiary has (i) lent money
to any Person,  or (ii) incurred or  guaranteed  any  indebtedness  for borrowed
money;                                                                          

          (n)  neither  the   Company  nor  any  Company   Subsidiary   has  (i)
established,  adopted or amended any Employee  Benefit Plan, (ii) paid any bonus
or made any profit-sharing or similar payment to, or increased the amount of the
wages,   salary,   commissions,   fringe  benefits  or  other   compensation  or
remuneration  payable to, any of its  directors,  officers or  employees,  (iii)
hired any new employee, in either case except in the ordinary course of business
and  consistent  with past  practices  or (iv)  entered  into any  severance  or
employment agreement with any person;                                           

          (o) neither the Company nor any Company  Subsidiary has changed any of
its methods of accounting or accounting practices in any material respect;      

          (p) neither the  Company nor any Company  Subsidiary  has made any Tax
election;                                                                       

          (q) neither the Company nor any Company  Subsidiary  has  commenced or
settled any Legal Proceeding;                                                   

          (r) neither the Company nor any Company  Subsidiary  has entered  into
any material transaction or taken any other material action outside the ordinary
course of business or inconsistent with its past practices;                     

          (s)  neither  the  Company  nor any  Company  Subsidiary  has made any
material write-down of inventory; and                                           

          (t)  neither the  Company  nor any  Company  Subsidiary  has agreed or
committed to take any of the actions  referred to in clauses "(c)" through "(s)"
above.                                                                          

2.6 Title to Assets.                                                  

          (a) The Company and each  Company  Subsidiary  owns,  and has good and
valid  title to all assets  purported  to be owned by it,  including  all of the
assets  reflected  in the  Company  Financial  Statements  and all other  assets
reflected  in the  Company's  books and records as being  owned by the  Company.
Except as set forth in Part 2.6(a) of the Company  Disclosure  Schedule,  all of
said assets are owned by the Company and each Company  Subsidiary free and clear
of any liens or other  Encumbrances,  except for (i) any lien for current  taxes
not yet due and  payable,  and (ii) minor liens that have arisen in the ordinary
course of business and that would not (in any case or in the  aggregate)  have a
Material Adverse Effect on the Company.                                         

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          (b) Part  2.6(b) of the Company  Disclosure  Schedule  identifies  all
assets  that are being  leased  or  licensed  to the  Company  and each  Company
Subsidiary  that involve  obligations  of the Company in excess of $25,000 on an
individual basis.                                                               

2.7 Accounts Receivable; Loans and Advances.                          

          (a) All accounts receivable of the Company and each Company Subsidiary
that are  reflected in the Company  Financial  Statements  or in the  accounting
records  of the  Company  as of the  date  hereof  (collectively,  the  "Company
Accounts  Receivable")  represent valid obligations  arising from sales actually
made or services  actually  performed  in the ordinary  course of business.  The
Company  Accounts  Receivable are current and  collectible net of any respective
reserves shown in the Company Financial  Statements or on the accounting records
of the Company as of the date hereof (which reserves are adequate and calculated
consistent with past practice). There is no contest, claim, or right of set-off,
other than returns in the ordinary  course of business,  under any Contract with
any  obligor  of any  Company  Accounts  Receivable  relating  to the  amount or
validity of such Company Accounts Receivable.                                   

          (b) Part 2.7(b) of Company  Disclosure  Schedule  contains an accurate
and complete  list of all loans and advances  made by the Company or any Company
Subsidiary (and pursuant to which amounts are outstanding as of the date of this
Agreement) to any employee,  director,  consultant or independent  contractor of
Company or any Company  Subsidiary,  other than routine travel  advances made to
employees in the ordinary course of business.                                   

     2.8  Inventory.  Part 2.8 of the Company  Disclosure  Schedule  provides an
accurate and complete breakdown of all inventory (including raw materials,  work
in process and finished  goods) of the Company as of December  31, 1998.  All of
the Company's existing  inventory  (including all inventory that is reflected on
the  audited  balance  sheet  referenced  in  Section  2.4 and that has not been
disposed of by the Company since December 31, 1998):                            

          (a) is of such  quality and  quantity as to be usable and  saleable by
the Company in the ordinary course of business and consistent with the Company's
past practices;                                                                 

          (b) has been  priced at the lower of cost or  market  value  using the
"first-in, first-out" method; and                                               

(c) is free of any defect or deficiency.                    

The inventory levels maintained by the Company (i) are not excessive in light of
the Company's normal operating  requirements,  (ii) are adequate for the conduct
of the Company's  operations in the ordinary  course of business and  consistent
with past practices, and (iii) are comparable to the inventory levels maintained
by Company Comparable Entities.                                                 

     2.9 Equipment;  Leasehold.  The real property  leased by and other tangible
assets leased or owned by the Company and each Company  Subsidiary  are adequate
for the uses to which  they are being  put,  are in good  condition  and  repair
(ordinary  wear and tear  excepted)  and are  adequate  for the  conduct  of the
Company's  business in the manner in which such business is now being conducted.
Neither the Company nor any  Company  Subsidiary  owns any real  property or any
material interest in real property.  Part 2.9 of the Company Disclosure Schedule
describes  all leases of real  property  held by the  Company  and each  Company
Subsidiary.                                                                     

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2.10 Proprietary Assets.                                              

          (a)  Except  as set  forth  in  Part  2.10 of the  Company  Disclosure
Schedule,  there is no  Proprietary  Asset that is owned by or  licensed  to the
Company or that is otherwise  used or useful in  connection  with the  Company's
business.  The Company Proprietary Assets identified in Part 2.10 of the Company
Disclosure Schedule constitute all of the Proprietary Assets necessary to enable
the  Company to conduct  its  business  in the manner in which its  business  is
currently being conducted and in the manner in which its business is proposed to
be conducted.                                                                   

          (b) To the  Knowledge of the  Company,  the Company has good and valid
title to all  Company  Proprietary  Assets free and clear of all liens and other
Encumbrances,  and has a valid right to use all Proprietary Assets.  Neither the
Company  nor any  Company  Subsidiary  is  obligated  to make any payment to any
Person for the use of any Company  Proprietary  Asset.  To the  Knowledge of the
Company,  the Company and each Company Subsidiary is free to use, modify,  copy,
distribute,  sell, license or otherwise exploit each of the Company  Proprietary
Assets on an exclusive basis (except for any Proprietary  Asset that is licensed
to the Company on a non-exclusive  basis under any third party software  license
generally available to the public at a cost of less than $2,500).               

          (c) The  Company  and each  Company  Subsidiary  has taken  reasonable
measures and precautions  necessary to protect and maintain the  confidentiality
and secrecy of all Company Proprietary Assets (except Company Proprietary Assets
whose value would be unimpaired by public  disclosure) and otherwise to maintain
and protect the value of all Company Proprietary Assets. Neither the Company nor
any Company  Subsidiary  has disclosed or delivered or permitted to be disclosed
or delivered to any Person, and no Person (other than the Company) has access to
or has any rights with respect to any Company  Proprietary Asset, in either case
except pursuant to a valid non-disclosure agreement.                            

          (d) To the Knowledge of the Company,  none of the Company  Proprietary
Assets  infringes or conflicts with any  Proprietary  Asset owned or used by any
other  Person.  To the  Knowledge  of the  Company,  neither the Company nor any
Company  Subsidiary is infringing,  misappropriating  or making any unlawful use
of, and the Company has not at any time infringed,  misappropriated  or made any
unlawful  use of, or received any notice or other  communication  of any actual,
alleged,  possible or potential  infringement,  misappropriation or unlawful use
of, any Proprietary Asset owned or used by any other Person. To the Knowledge of
the  Company,  no other  Person is  infringing,  misappropriating  or making any
unlawful  use of, and no  Proprietary  Asset  owned or used by any other  Person
infringes or conflicts with, any Company Proprietary Asset.                     

          (e) The Company  Proprietary  Assets  constitute  all the  Proprietary
Assets  necessary to enable the Company to conduct its business in the manner in
which such  business  has been  conducted.  Neither  the Company nor any Company
Subsidiary has licensed any of the Company  Proprietary  Assets to any Person on
an  exclusive  basis,  and neither the  Company nor any Company  Subsidiary  has
entered  into any  covenant  not to compete or Contract  limiting its ability to
exploit  fully any of its  Proprietary  Assets or to  transact  business  in any
market or geographical area or with any Person.                                 

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          (f) No  shareholder,  officer or  director of the Company has title to
any Company  Proprietary Asset which would be necessary to enable the Company to
conduct its  business in the manner in which such  business is  currently  being
conducted.                                                                      

2.11 Contracts.                                                       

          (a) Part 2.11(a) (and Part 2.9 regarding  leases of real  property) of
the  Company   Disclosure   Schedule   identifies  each  Company  Contract  that
constitutes a "Material  Company  Contract." For purposes of this  Agreement,  a
"Material Company Contract" shall be deemed to be any Company Contract:         

               (i)  relating  to  the   employment  or  engagement  of,  or  the
performance of services by, any employee,  consultant or independent  contractor
which  involves a potential  commitment  of the Company in excess of $25,000 per
year,   including  any  Company  Contract   involving   severance   payments  or
acceleration benefits upon a Company Acquisition Transaction;                   

               (ii) relating to the  acquisition,  transfer,  use,  development,
sharing or license of any  Company  Proprietary  Asset  (except in the  ordinary
course of business and except for any Company Proprietary Asset that is licensed
to the  Company  under any third  party  software  license  agreement  generally
available to the public at a cost of less than $25,000);                        

               (iii)  imposing any material  restriction on the Company's or any
Company  Subsidiary's right or ability (A) to compete with any other Person, (B)
to acquire any product or other asset or any services from any other Person,  to
sell any product or other asset to or perform any  services for any other Person
or to transact  business or deal in any other manner with any other  Person,  or
(C) to develop or distribute any Company Proprietary Asset;                     

               (iv) creating or involving any agency relationship,  distribution
arrangement or franchise  relationship involving payments to or from the Company
or obligations in excess of $25,000 per year;                                   

               (v)  relating  to the  acquisition,  issuance  or transfer of any
securities of the Company or any Company  Subsidiary under which the Company has
any current rights or obligations;                                              

               (vi) creating or relating to the creation of any Encumbrance with
respect  to any asset  owned or used by the  Company or any  Company  Subsidiary
having a value in excess of $25,000;                                            

               (vii) involving or incorporating  any guaranty,  any pledge,  any
performance or completion bond, any indemnity,  any right of contribution or any
surety arrangement in excess of $25,000 per year;                               

               (viii)  creating or relating to any  partnership or joint venture
or any material sharing of revenues, profits, losses, costs or liabilities;     

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               (ix)  relating  to the  purchase  or sale of any product or other
asset by or to, or the  performance of any services by or for, any Related Party
(as defined in Section 2.20);                                                   

       (x) entered into outside the ordinary course of business;

               (xi) that may not be  terminated  by the  Company or any  Company
Subsidiary (without penalty) within 120 days after the delivery of a termination
notice by the Company or any Company  Subsidiary and which involves  payments or
commitments of $5,000 or more;                                                  

               (xii)  contemplating  or involving (A) the payment or delivery of
cash or other  consideration in an amount or having a value in excess of $25,000
in the aggregate, or (B) the performance of services having a value in excess of
$25,000 in the aggregate; and                                                   

(xiii) which is a lease of real property.         

          (b) The Company has delivered to OFPI accurate and complete  copies of
all  Material  Company  Contracts  identified  in Part  2.11(a)  of the  Company
Disclosure  Schedule,  including all amendments  thereto.  Each Material Company
Contract  identified in Part 2.11(a) of the Company Disclosure Schedule is valid
and in full force and effect,  and is  enforceable  by the Company in accordance
with  its  terms,  subject  to (i)  laws  of  general  application  relating  to
bankruptcy,  insolvency  and the  relief  of  debtors,  and  (ii)  rules  of law
governing specific performance, injunctive relief and other equitable remedies. 

          (c)  Neither  the  Company  nor any  Company  Subsidiary  nor,  to the
Company's  knowledge,  any other party, has materially violated or breached,  or
committed any material default under, any Material Company Contract;            

               (i) to the knowledge of the Company,  no event has occurred,  and
no  circumstance or condition  exists,  that (with or without notice or lapse of
time) will,  or could  reasonably  be expected  to, (A) result in a violation or
breach of any of the provisions of any Material Company  Contract,  (B) give any
Person the right to declare a default or exercise  any remedy under any Material
Company  Contract,  (C) give any Person the right to accelerate  the maturity or
performance of any Material Company  Contract,  or (D) give any Person the right
to cancel, terminate or modify any Material Company Contract;                   

               (ii) since December 31, 1998, neither the Company nor any Company
Subsidiary  has received  any notice or other  communication  regarding  (i) any
actual or  possible  violation  or breach of, or  default  under,  any  Material
Company  Contract,  or (ii) any actual or possible  termination  of any Material
Company Contract; and                                                           

               (iii) neither the Company nor any Company  Subsidiary  has waived
any of its material rights under any Material Company Contract.                 

     2.12  No  Undisclosed  Liabilities.  Except  as set  forth  in the  Company
Financial Statements and except for current liabilities incurred in the ordinary
course of business since December 31, 1998,  neither the Company nor any Company
Subsidiary has accrued,  contingent or other  liabilities of any nature,  either
matured or unmatured.                                                           

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     2.13  Compliance  with Legal  Requirements.  The Company  and each  Company
Subsidiary  is, and has at all times been,  in  compliance  with all  applicable
Legal  Requirements,  except  where  the  failure  to  comply  with  such  Legal
Requirements  has not had and will not have a  Material  Adverse  Effect  on the
Company.  Neither the Company nor any Company Subsidiary has received any notice
or other  communication  from any  Governmental  Body  regarding  any  actual or
possible  violation  of, or  failure  to  comply  with,  any Legal  Requirement;
provided,  however,  that this  representation  shall  not apply to the  matters
covered by the representations contained in Sections 2.15, 2.16 and 2.17.       

     2.14 Governmental  Authorizations.  The Company and each Company Subsidiary
has all  Governmental  Authorizations  necessary  to enable the Company and such
Company  Subsidiary  to conduct its business in the manner in which its business
is currently being conducted, except for Governmental Authorizations the failure
of which to obtain would not have a Material Adverse Effect on the Company.  The
Company and each Company Subsidiary is, and at all times has been, in compliance
with the material terms and  requirements of such  Governmental  Authorizations,
except for any  noncompliance  which would not have a Material Adverse Effect on
the  Company.  Neither the Company nor any Company  Subsidiary  has received any
notice or other  communication  from any  Governmental  Body  regarding  (a) any
actual  or  possible  violation  of or  failure  to  comply  with  any  term  or
requirement  of any  Governmental  Authorization,  or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental Authorization.                                                 

2.15 Tax Matters.                                                     

          (a) All Material  Tax Returns  required to be filed by or on behalf of
the Company with any Governmental Body with respect to any transaction occurring
or any  taxable  period  ending  on or  before  the date  hereof  (the  "Company
Returns")  (i) have been  filed  when due,  and (ii)  have been  accurately  and
completely  prepared in compliance with all applicable Legal  Requirements.  The
Company  and  each  Company  Subsidiary  has,  within  the time  (including  any
extensions  of applicable  due dates) and in the manner  prescribed by law, paid
all Taxes that are due and payable,  except Taxes that,  individually and in the
aggregate,  are not material.  The Company Financial Statements fully accrue all
actual and contingent  liabilities for Taxes with respect to all periods through
the dates thereof in accordance with generally accepted accounting principles.  

          (b) No claim or Legal  Proceeding  is pending  or has been  threatened
against or with respect to the Company or any Company  Subsidiary  in respect of
any Tax. There are no unsatisfied  liabilities for Taxes (including  liabilities
for interest,  additions to tax and penalties thereon and related expenses) with
respect to any notice of deficiency or similar document  received by the Company
or any Company  Subsidiary.  There are no liens for Taxes upon any of the assets
of the Company or any Company Subsidiary, except liens for current Taxes not yet
due and payable.                                                                

2.16 Employee and Labor Matters; Benefit Plans.                       

          (a) Part 2.16(a) of the Company Disclosure Schedule contains a list of
all  salaried  employees of the Company as of the date of this  Agreement  whose
annual salaries are greater than $30,000, and correctly reflects their salaries,

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any other compensation payable to them (including  compensation payable pursuant
to bonus,  deferred  compensation  or commission  arrangements),  their dates of
employment and their positions.  Neither the Company nor any Company  Subsidiary
is a party to any collective  bargaining contract or other Contract with a labor
union involving any of its employees.                                           

          (b) Part 2.16(b) of the Company  Disclosure  Schedule  identifies each
salary, bonus, deferred compensation,  incentive  compensation,  stock purchase,
stock  option,   severance  pay,  termination  pay,   hospitalization,   health,
insurance,  supplemental  unemployment  benefits,  profit-sharing,   pension  or
retirement plan,  program or agreement  (individually  referred to as a "Company
Plan"  and  collectively   referred  to  as  the  "Company  Plans")   sponsored,
maintained,  contributed  to or required to be  contributed to by the Company or
any Company  Subsidiary for the benefit of any current or former employee of the
Company or any Company Subsidiary.                                              

          (c) Neither the Company nor any Company Subsidiary maintains, sponsors
or contributes to, and, to the knowledge of the Company, neither the Company nor
any Company  Subsidiary  has at any time in the past  maintained,  sponsored  or
contributed to, any employee pension benefit plan (as defined in Section 3(2) of
the Employee  Retirement  Income  Security Act of 1974,  as amended  ("ERISA")),
subject to Title IV of ERISA for the benefit of employees or former employees of
the Company (a " Company Defined Benefit Plan").                                

          (d) Neither the Company nor any Company Subsidiary maintains, sponsors
or contributes to any employee  welfare benefit plan (as defined in Section 3(1)
of ERISA,  whether or not excluded from coverage under specific Titles or Merger
Subtitles  of ERISA) for the benefit of  employees  or former  employees  of the
Company or any Company Subsidiary.                                              

          (e) With respect to each Company Plan,  the Company has made available
to OFPI:                                                                        

               (i) an accurate and complete copy of such Company Plan (including
all amendments thereto);                                                        

               (ii) an  accurate  and  complete  copy of the  annual  report (if
required  under  ERISA)  with  respect to such  Company  Plan for the three most
recent plan years;                                                              

               (iii)  an  accurate  and  complete  copy of (A) the  most  recent
summary plan description,  together with each summary of material  modifications
thereto (if required  under ERISA) with  respect to such Company  Plan,  and (B)
each material employee communication relating to such Company Plan;             

               (iv) if such Company Plan is funded  through a trust or any third
party  funding  vehicle,  an accurate  and  complete  copy of the trust or other
funding agreement  (including all amendments  thereto) and accurate and complete
copies the most recent financial statements thereof;                            

               (v)  accurate and complete  copies of all  Contracts  relating to
such Company Plan, including service provider  agreements,  insurance contracts,
minimum  premium  contracts,   stop-loss   agreements,   investment   management
agreements,   subscription  and   participation   agreements  and  recordkeeping
agreements; and                                                                 

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               (vi)  an  accurate   and   complete   copy  of  the  most  recent
determination,  notification,  advisory  and/or opinion letter received from the
Internal Revenue Service with respect to such Company Plan (if such Company Plan
is intended to be qualified under Section 401(a) of the Code).                  

          (f) Neither the Company nor any Company  Subsidiary is required to be,
and, to the knowledge of the Company, the Company has never been required to be,
treated as a single  employer with any other Person under Section  4001(b)(1) of
ERISA or Section  414(b),  (c), (m) or (o) of the Code.  Neither the Company nor
any Company  Subsidiary has ever been a member of an "affiliated  service group"
within the meaning of Section 414(m) of the Code. To the of the knowledge of the
Company, neither the Company nor any Company Subsidiary has ever made a complete
or partial  withdrawal from a "multiemployer  plan" (as defined in Section 3(37)
of ERISA)  resulting in  "withdrawal  liability"  (as defined in Section 4201 of
ERISA), without regard to subsequent reduction or waiver of such liability under
either Section 4207 or 4208 of ERISA.                                           

          (g) Neither the  Company  nor any Company  Subsidiary  has any plan or
commitment to create any  additional  Company  employee  benefit plan within the
meaning  of ERISA,  or to modify or change any such plan  (other  than to comply
with applicable law).                                                           

          (h) No Company Welfare Plan provides death, medical or health benefits
(whether or not insured)  with respect to any current or former  employee of the
Company after any such employee's termination of service (other than (i) benefit
coverage  mandated by applicable law,  including  coverage  provided pursuant to
Section  4980B of the Code,  (ii)  deferred  compensation  benefits  accrued  as
liabilities  on the balance sheet as of December 31, 1998, or (iii) benefits the
full cost of which are borne by current or former  employees  of the  Company or
any Company Subsidiary (or their beneficiaries)).                               

          (i) With  respect to each of the Company  Plans  constituting  a group
health  plan  within  the  meaning  of  Section  4980B(g)(2)  of the  Code,  the
provisions of the  Consolidated  Omnibus Budget  Reconciliation  Act of 1985, as
amended ("COBRA") have been complied with in all material respects.             

          (j) Each of the Company  Plans has been operated and  administered  in
all  material  respects  in  accordance  with  applicable  Legal   Requirements,
including ERISA and the Code.                                                   

          (k) Each of the Company Plans  intended to be qualified  under Section
401(a) of the Code has  received a  favorable  determination  from the  Internal
Revenue  Service,  and the  Company  is not  aware  of any  reason  why any such
determination letter should be revoked.                                         

          (l) Neither the execution,  delivery or performance of this Agreement,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement,  will result in any bonus payment,  golden parachute payment,
severance payment or other payment to any current or former employee or director
of the  Company or any  Company  Subsidiary  (whether  or not under any  Company

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Plan),  or materially  increase the benefits  payable under any Company Plan, or
result  in any  acceleration  of the  time of  payment  or  vesting  of any such
benefits.                                                                       

          (m) The Company and each Company  Subsidiary  is in  compliance in all
material respects with all applicable Legal  Requirements and Contracts relating
to employment,  employment practices, employee compensation,  wages, bonuses and
terms and conditions of employment.                                             

     2.17 Environmental  Matters. The Company and each Company Subsidiary is and
has at all  times  been  in  compliance,  in all  material  respects,  with  all
applicable Environmental Laws. The Company and each Company Subsidiary possesses
all permits and other  Governmental  Authorizations  required  under  applicable
Environmental  Laws,  and the Company and each Company  Subsidiary is and has at
all  times  been in  compliance  with the  terms  and  requirements  of all such
Governmental   Authorizations,   except   where  the  failure  to  possess  such
Governmental  Authorizations  or  failure to be in  compliance  would not have a
Material  Adverse  Effect on the  Company.  Neither  the Company nor any Company
Subsidiary  has  received  any  notice or other  communication  (whether  from a
Governmental Body, citizens group,  employee or otherwise) that alleges that the
Company  or any  Company  Subsidiary  is not or was not in  compliance  with any
Environmental Law. To the knowledge of the Company, no current or prior owner of
any  property  leased or owned by the  Company  or any  Company  Subsidiary  has
received any notice or other  communication  (whether from a Governmental  Body,
citizens  group,  employee or otherwise) that alleges that such current or prior
owner or the Company is not or was not in compliance with any Environmental Law.
(For purposes of this Section 2.17 and Section  3.17:  (i)  "Environmental  Law"
means any  federal,  state,  local or  foreign  Legal  Requirement  relating  to
pollution or protection of human health or the  environment  (including  ambient
air, surface water, ground water, land surface or subsurface strata),  including
any law or regulation relating to emissions,  discharges, releases or threatened
releases of Materials of  Environmental  Concern,  or otherwise  relating to the
manufacture,   processing,  distribution,  use,  treatment,  storage,  disposal,
transport or handling of Materials of Environmental Concern; and (ii) "Materials
of Environmental Concern" include chemicals, pollutants,  contaminants,  wastes,
toxic substances,  petroleum and petroleum products and any other substance that
is now or in the future regulated by any  Environmental Law or that is otherwise
a danger to health,  reproduction or the  environment.)  To the Knowledge of the
Company, no Materials of Environmental Concern have been released or are located
on or  under  any  property  leased  or  owned  by the  Company  or any  Company
Subsidiary.  Neither the Company nor any Company  Subsidiary  has  received  any
notice or other communication (whether from a Governmental Body, citizens group,
employee or otherwise) regarding a release of, or the existence of, Materials of
environmental  concern at,  under or about any  property  leased or owned by the
Company or any Company Subsidiary.                                              

2.18 Sale of Products; Performance of Services.                       

     (a) Each product that has been sold by the Company to any Person:

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               (i)  conformed  and complied in all  respects  with the terms and
requirements  of  any  applicable  warranty  or  other  Contract  and  with  all
applicable Legal Requirements; and                                              

               (ii) was free of any  design  defects,  construction  defects  or
other defects or deficiencies at the time of sale.                              

All services that have been performed by the Company were performed properly and
in full conformity with the terms and requirements of all applicable  warranties
and other Contracts and with all applicable Legal Requirements.                 

          (b) To the  Knowledge  of the  Company,  the Company will not incur or
otherwise  become subject to any Liability  arising  directly or indirectly from
any product  manufactured  or sold,  or any repair  services  or other  services
performed by, the Company on or at any time prior to the Closing Date.          

          (c) To the Knowledge of the Company,  no product  manufactured or sold
by the Company has been the subject of any recall or other similar  action;  and
no event has occurred, and no condition or circumstance exists, that might (with
or without notice or lapse of time) directly or indirectly give rise to or serve
as a basis for any such  recall or other  similar  action  relating  to any such
product.                                                                        

          (d)  Except  as set  forth  in  Part  2.18 of the  Company  Disclosure
Schedule,  no customer or other Person has ever asserted or threatened to assert
any claim  against the Company (i) under or based upon any warranty  provided by
or on behalf of the  Company,  or (ii)  under or based  upon any other  warranty
relating to any product  sold by the Company or any  services  performed  by the
Company.  To the  Knowledge  of the  Company,  no  event  has  occurred,  and no
condition or circumstance exists, that might (with or without notice or lapse of
time) directly or indirectly  give rise to or serve as a basis for the assertion
of any such claim.                                                              

          (e) The  Company  has in place an  adequate  and  appropriate  quality
control  system that is at least as  comprehensive  and effective as the quality
control systems customarily maintained by Company Comparable Entities.          

     2.19 Insurance. The business and properties of the Company and each Company
Subsidiary  are  insured  for  the  benefit  of the  Company  and  each  Company
Subsidiary in amounts deemed adequate by the Company's  management against risks
usually insured against by persons operating  businesses similar to those of the
Company in the localities  where such  properties  are located.  The Company has
received no notice of  cancellation  or refusal of coverage and copies of all of
such insurance policies have been delivered to OFPI.                            

     2.20 Related  Party  Transactions.  Except as set forth in Part 2.20 of the
Company Disclosure Schedule,  (a) no Related Party has, and no Related Party has
at any time since December 31, 1995 had, any direct or indirect  interest in any
material  asset used in or otherwise  relating to the business of the Company or
any Company  Subsidiary in a manner that would be required to be disclosed under
Item 404 of Regulation  S-K  promulgated by the SEC; (b) no Related Party is, or
has at any time since  December  31,  1995 been,  indebted to the Company or any
Company Subsidiary in a manner that would be required to be disclosed under Item
404 of Regulation  S-K  promulgated  by the SEC; (c) since December 31, 1995, no

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Related  Party has entered  into,  or has had any direct or  indirect  financial
interest in, any Material  Company  Contract,  transaction  or business  dealing
involving  the  Company  or any  Company  Subsidiary  in a manner  that would be
required to be disclosed  under Item 404 of Regulation  S-K  promulgated  by the
SEC; (d) no Related  Party is competing,  or has at any time since  December 31,
1995  competed,  directly or  indirectly,  with the Company;  and (e) no Related
Party has any claim or right  against  the  Company  or any  Company  Subsidiary
(other than rights to receive compensation for services performed as an employee
of the Company or any Company  Subsidiary).  (For purposes of this Section 2.20,
each of the  following  shall  be  deemed  to be a  "Related  Party":  (i)  each
individual  who is, or who has at any time since  December  31,  1995  been,  an
officer  or  director  of the  Company  or any  Company  Subsidiary;  (ii)  each
individual  who is, or who at any time since December 31, 1995 been, a member of
the  immediate  family of any of the  individuals  referred  to in clause  "(i)"
above; (iii) any shareholder of the Company or any Company Subsidiary, provided,
however,  that  with  respect  to  shareholders  who  hold  less  than 5% of the
outstanding Common Stock of the Company or any Company Subsidiary  determined on
an as-if-converte  basis, such representations are made only to the knowledge of
the Company or any Company Subsidiary, and (iv) any trust or other Entity (other
than the Company or any Company  Subsidiary) in which any one of the individuals
referred to in clauses  "(i),"  "(ii)" and "(iii)" above holds (or in which more
than one of such individuals  collectively hold),  beneficially or otherwise,  a
material voting, proprietary or equity interest.)                               

     2.21 Legal Proceedings;  Orders. There is no pending Legal Proceeding, and,
to the knowledge of the Company,  no Person has threatened to commence any Legal
Proceeding  that:  (i) may have a Material  Adverse  Effect on the Company,  any
Company Subsidiaries or their respective businesses; or (ii) challenges, or that
may have the  effect  of  preventing,  delaying,  making  illegal  or  otherwise
interfering  with, the Merger or any of the other  transactions  contemplated by
this Agreement.  To the knowledge of the Company, no event has occurred,  and no
claim,  dispute or other condition or circumstance  exists that could reasonably
be expected to give rise to or serve as a basis for the commencement of any such
Legal Proceeding.  There is no order,  writ,  injunction,  judgment or decree to
which the Company or any Company Subsidiary,  or any of the assets owned or used
by the Company or any Company  Subsidiary,  is subject.  To the knowledge of the
Company,  no officer or other employee of the Company or any Company  Subsidiary
is subject to any order,  writ,  injunction,  judgment or decree that  prohibits
such  officer or other  employee  from  engaging in or  continuing  any conduct,
activity or practice  relating to the  Company's  or such  Company  Subsidiary's
business.  There is no action, suit,  proceeding or investigation by the Company
currently  pending or which the  Company or any  Company  Subsidiary  intends to
initiate.                                                                       

     2.22 Authority;  Binding Nature of Agreement.  The Company has the absolute
and  unrestricted  right,  power and  authority to enter into and to perform its
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary  action
on the part of the Company,  its Board of Directors and its  shareholders.  This
Agreement  constitutes the legal,  valid and binding  obligation of the Company,
enforceable  against  the  Company  in  accordance  with its  terms,  except  as
enforcement thereof may be limited by (i) laws of general  application  relating
to bankruptcy,  insolvency,  moratorium,  reorganization  or other similar laws,

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both state and  federal,  affecting  the  enforcement  of  creditors'  rights or
remedies  in  general,  and (ii) rules of law  governing  specific  performance,
injunctive relief and other equitable remedies.                                 

     2.23 Non-Contravention;  Consents.  Except as set forth in Part 2.23 of the
Company Disclosure Schedule, neither (1) the execution,  delivery or performance
of this Agreement or any of the other agreements  referred to in this Agreement,
nor  (2)  the  consummation  of the  Merger  or any  of the  other  transactions
contemplated  by this  Agreement,  will directly or indirectly  (with or without
notice or lapse of time):                                                       

          (a)  contravene,  conflict with or result in a violation of any of the
provisions of the Company's or any Company Subsidiary's articles of organization
or bylaws;                                                                      

          (b) with respect to the Company or any Company Subsidiary, contravene,
conflict  with or result in a  violation  of, or give any  Governmental  Body or
other Person the right to challenge any of the transactions contemplated by this
Agreement  or to  exercise  any  remedy or obtain any  relief  under,  any Legal
Requirement  or any order,  writ,  injunction,  judgment  or decree to which the
Company or any  Company  Subsidiary,  or any of the assets  owned or used by the
Company or any Company Subsidiary, is subject;                                  

          (c) with respect to the Company or any Company Subsidiary, contravene,
conflict with or result in a violation of any of the terms or  requirements  of,
or give any Governmental Body the right to revoke,  withdraw,  suspend,  cancel,
terminate or modify, any Governmental  Authorization that is held by the Company
or any Company  Subsidiary  or that  otherwise  relates to the  Company's or any
Company  Subsidiary's  business  or to any of the  assets  owned  or used by the
Company or any Company Subsidiary;                                              

          (d)  contravene,  conflict with or result in a violation or breach of,
or result in a default under, any provision of any Material Company Contract, or
give any Person the right to (i) declare a default or exercise  any remedy under
any Material  Company  Contract,  (ii) accelerate the maturity or performance of
any Material Company Contract, or (iii) cancel, terminate or modify any Material
Company Contract; or                                                            

          (e)  result  in the  imposition  or  creation  of any  lien  or  other
Encumbrance  upon or with  respect to any asset  owned or used by the Company or
any Company  Subsidiary (except for minor liens that will not, in any case or in
the aggregate,  materially  detract from the value of the assets subject thereto
or have a Material Adverse Effect on the Company).                              

Except as may be required by the CGCL and state securities or blue sky laws, and
except as set forth in Part 2.23 of the Company Disclosure Schedule, the Company
is not and will not be  required  to make any filing with or give any notice to,
or to obtain any Consent from, any Person in connection  with (x) the execution,
delivery  or  performance  of  this  Agreement  or any of the  other  agreements
referred to in this Agreement,  or (y) the  consummation of the Merger or any of
the other transactions contemplated by this Agreement.                          

     2.24 Vote Required.  The  affirmative  vote of the holders of a majority of
the  outstanding  shares of Common  Stock of the Company  outstanding  as of the
record date of the Company  Shareholders'  Meeting (as defined below), voting as
separate classes (the "Requisite Company Vote"), is the only vote of the holders
of any class or series of Company's capital stock necessary to adopt and approve
this Agreement, the Merger and the transactions contemplated thereby.           

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     2.25 Company  Action.  The Board of Directors of Company (at a meeting duly
called and held) has (a) unanimously determined that the Merger is advisable and
fair and in the best interests of Company and its shareholders,  (b) unanimously
approved  this  Agreement  and the  Merger  in  accordance  with the  applicable
provisions  of the  CGCL,  and (c)  unanimously  recommended  the  adoption  and
approval of this Agreement and the Merger by the holders of Company Common Stock
and directed that this  Agreement and the Merger be submitted for  consideration
by the Company's shareholders at the Company Shareholders' Meeting. With respect
to any action of the Board of Directors of the Company described in this Section
2.25,  any unanimous  determination,  approval or  recommendation  of such Board
shall refer to the unanimous action of the disinterested  members of such Board,
as applicable.  The Company and each of the individuals  identified on Exhibit E
shall have executed those certain voting agreements  (collectively,  the "Voting
Agreements") of even date herewith.                                             

2.26 Full Disclosure.                                                 

          (a) To the Company's knowledge, all documents, contracts, instruments,
certificates,   notices,  consents,  affidavits,  letters,  telegrams,  telexes,
written  statements,  schedules  (including  the Company  Disclosure  Schedule),
exhibits  (including  the  Exhibits  to this  Agreement)  and any  other  papers
whatsoever (excluding in all cases drafts and interim versions marked as such or
apparent as such on their face)  delivered to OFPI by the Company in  connection
with this  Agreement and the  transactions  contemplated  thereby,  are true and
complete  copies  thereof.  The  representations  and  warranties of the Company
contained in this  Agreement,  as modified by the Company  Disclosure  Schedule,
contain no untrue  statements of any material fact or omit to state any material
fact required to be stated therein or necessary to make the statements  therein,
in  light  of the  circumstances  under  which  they  were  made,  not  false or
misleading.                                                                     

          (b) The information supplied by the Company for inclusion in the Joint
Proxy Statement (including the Company Financial Statements) will not, as of the
date of the Joint Proxy  Statement  or as of the date of the OFPI  Shareholders'
Meeting  (as  defined in  Section  5.5),  and in each case,  as of the date such
information  is prepared or presented,  contain any statement that is inaccurate
or  misleading  with  respect to any  material  fact,  or (ii) omit to state any
material  fact  necessary  in  order  to make  such  information  not  false  or
misleading.                                                                     

     2.27 Finder's Fee. Except for Moore Consulting ("Moore"), no broker, finder
or  investment  banker is  entitled to any  brokerage,  finder's or other fee or
commission  in  connection  with the  Merger  or any of the  other  transactions
contemplated  thereby  based  upon  arrangements  made  by or on  behalf  of the
Company.                                                                        

SECTION 3. REPRESENTATIONS AND WARRANTIES OF OFPI.                              

     OFPI  represents  and warrants to the Company that,  except as set forth in
the disclosure  schedule prepared by OFPI in accordance with the requirements of
Section 10.13 and that has been  delivered by OFPI to the Company on the date of
this Agreement (the "OFPI Disclosure Schedule"):                                

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3.1 Due Organization, Etc.                                            

          (a) Each of OFPI and each  subsidiary  of OFPI are  corporations  duly
organized,  validly  existing  and in good  standing  under  the  laws of  their
respective jurisdictions of incorporation,  and each of them have full corporate
power and  authority:  (i) to conduct  its  business  in the manner in which its
business is  currently  being  conducted;  (ii) to own and use its assets in the
manner in which its assets are  currently  owned and used;  and (iii) to perform
its  obligations  under  all  Contracts  by  which  it is  bound.  OFPI  has  no
subsidiaries  other  than  the  subsidiaries  disclosed  in Part 3.1 of the OFPI
Disclosure Schedule (collectively, the "OFPI Subsidiaries").                    

          (b) OFPI and the OFPI Subsidiaries maintain facilities or employees in
each state listed in Part 3.1(b) of the OFPI Disclosure  Schedule.  Each of OFPI
and  each  OFPI  Subsidiary  is duly  qualified  to do  business  and is in good
standing in each jurisdiction in which the failure to be so qualified would have
a Material  Adverse  Effect on OFPI or on the ability of OFPI to consummate  the
transactions contemplated hereby.                                               

     3.2 Articles of Incorporation  and Bylaws;  Records.  OFPI has delivered or
made available to Company  accurate and complete  copies of: (1) OFPI's articles
of  incorporation  and bylaws as currently in effect,  including all  amendments
thereto; (2) the stock records of OFPI; and (3) the minutes and other records of
the  meetings  and other  proceedings  (including  any actions  taken by written
consent or otherwise  without a meeting) of the  shareholders of OFPI, the Board
of Directors of OFPI and all committees of the Board of Directors of OFPI.  OFPI
is not in violation of any of the provisions of its articles of incorporation or
bylaws. The books of account,  stock records,  minute books and other records of
OFPI  are  accurate  and  complete  in all  material  respects,  and  have  been
maintained in accordance with prudent business practices.                       

     3.3 Capitalization,  Etc. The authorized capital stock of OFPI consists of:
(i)  20,000,000  shares of Common  Stock,  no par value per share ("OFPI  Common
Stock"),  of which  7,559,002  shares have been issued and are outstanding as of
the date hereof;  and (ii) 5,000,000 shares of preferred stock, no par value per
share, none of which are outstanding.  All of the outstanding shares of OFPI and
each OFPI Subsidiary capital stock have been duly authorized and validly issued,
and are fully paid and non-assessable, and none of such shares is subject to any
repurchase option or restriction on transfer other than restrictions  imposed by
federal  and state  securities  laws.  All  outstanding  shares of OFPI and OFPI
Subsidiaries  capital stock have been issued in compliance  with all  applicable
securities laws and other  applicable Legal  Requirements.  Part 3.3 of the OFPI
Disclosure  Schedule  sets forth,  as of the date hereof,  (i) the names of each
holder of 5% or more of the  outstanding  voting stock of OFPI together with the
number  of  shares  held  by  each  such  holder,   and  (ii)  all   outstanding
subscriptions,  options,  calls,  warrants  or  other  rights  (whether  or  not
currently  exercisable)  to  acquire  any shares of the  capital  stock or other
securities of OFPI. All of the outstanding  shares of capital stock of each OFPI
Subsidiary are owned  beneficially  and of record by OFPI, free and clear of any
Encumbrances. The Shares, when issued by OFPI to the Company's shareholders will

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be duly  authorized,  validly  issued,  fully paid and  non-assessable,  will be
issued in compliance with applicable  federal and state securities laws and will
be free and clear of all  Encumbrances  as a result of any actions by OFPI. OFPI
has never  repurchased,  redeemed  or  otherwise  reacquired  any  shares of its
capital stock or other securities.  Other than the irrevocable proxies set forth
in Part 3.3 of the OFPI Disclosure Schedule,  there are no preemptive or similar
rights with respect to the OFPI's capital stock.  There is no OFPI Contract (or,
to OFPI's  knowledge,  any other agreement or arrangement to which OFPI is not a
party) relating to the voting or registration of, or restricting any Person from
purchasing,  selling, pledging or otherwise disposing of (or granting any option
or similar right with respect to), any shares of OFPI Common Stock.  There is no
shareholder  rights  plan (or  similar  plan  commonly  referred to as a "poison
pill") or  Contract  under  which  OFPI is or may  become  obligated  to sell or
otherwise issue any shares of its capital stock or any other securities.        

3.4 SEC Filings; Financial Statements.                                

          (a) OFPI has  delivered to the Company  accurate  and complete  copies
(including  unredacted  copies  of  all  exhibits)  of  each  report,  schedule,
registration statement and definitive proxy statement filed by OFPI with the SEC
since August 8, 1997 (the "OFPI SEC  Documents"),  which are all the reports and
documents  required to be filed by OFPI with the SEC since August 8, 1997.  Each
of the OFPI SEC Documents was timely filed by OFPI in accordance  with the rules
and  regulations  of the SEC and the NASD.  As of the time it was filed with the
SEC  (or,  if  amended  or  superseded  by a  filing  prior  to the date of this
Agreement,  then on the date of such filing): (i) each of the OFPI SEC Documents
complied  in all  material  respects  with the  applicable  requirements  of the
Securities  Act or the  Exchange  Act (as the case may be); and (ii) none of the
OFPI SEC Documents  contained any untrue statement of a material fact or omitted
to state a material fact required to be stated  therein or necessary in order to
make the statements  therein, in the light of the circumstances under which they
were made, not misleading.                                                      

          (b) The consolidated  financial statements  (including,  in each case,
any notes related thereto) contained in the OFPI SEC Documents:  (i) complied as
to form in all material respects with the published rules and regulations of the
SEC applicable thereto; (ii) were prepared in accordance with generally accepted
accounting  principles  applied on a  consistent  basis  throughout  the periods
covered  (except as may be indicated in the notes to such  financial  statements
and, in the case of unaudited statements,  as permitted by Form 10-Q of the SEC,
and except that unaudited financial statements may not contain footnotes and are
subject  to  year-end   audit   adjustments);   and  (iii)  fairly  present  the
consolidated  financial  position  of  OFPI  and  its  subsidiaries  as  of  the
respective dates thereof and the consolidated  results of operations of OFPI and
its subsidiaries for the periods covered thereby.                               

          (c) OFPI has  furnished to the Company a complete and accurate copy of
any amendments,  supplements or modifications  that have not yet been filed with
the SEC to agreements,  documents or other instruments that have been previously
filed by OFPI with the SEC pursuant to the  Securities  Act or the Exchange Act,
if any.                                                                         

          (d) OFPI has  furnished the Company the  unaudited  balance  sheets of
OFPI as of January 31, 1999 and the related  unaudited  statements  of income of
OFPI for the seven months then ended.  Such financial  statements fairly present
the  financial  position  of OFPI as of the  respective  dates  thereof  and the

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results of operations  and cash flows of OFPI for the periods  covered  thereby.
Such  financial  statements  have been  prepared in  accordance  with  generally
accepted  accounting  principles  applied on a consistent  basis  throughout the
periods  covered  (except that they do not contain  footnotes and are subject to
normal and recurring year-end  adjustments,  which will not,  individually or in
the aggregate be material in magnitude). The financial statements referred to in
subsection (b) and this subsection (d) are hereinafter  referred to as the "OFPI
Financial Statements."                                                          

     3.5  Absence  of  Changes.  Except  as  described  in Part  3.5 of the OFPI
Disclosure Schedule, since January 31, 1999 through the date of this Agreement: 

          (a) there has not been any material  adverse  change in the  business,
condition,  assets, liabilities,  operations or financial performance of OFPI or
any of the OFPI  Subsidiaries,  and,  to the  knowledge  of OFPI,  no event  has
occurred that could  reasonably be expected to have a Material Adverse Effect on
OFPI and its subsidiaries taken as a whole;                                     

          (b) there has not been any loss,  damage or  destruction to any of the
assets  of OFPI or any of the  OFPI  Subsidiaries  (whether  or not  covered  by
insurance) that could  reasonably be expected to have a Material  Adverse Effect
on OFPI;                                                                        

          (c) neither OFPI nor any OFPI  Subsidiary has declared,  accrued,  set
aside or paid any dividend, stock split, combination or reclassification or made
any  other  distribution  in  respect  of any  shares of  capital  stock nor has
repurchased,  redeemed or otherwise  reacquired  any shares of capital  stock or
other securities;                                                               

          (d)  neither  OFPI  nor  any  OFPI  Subsidiary  has  sold,  issued  or
authorized the issuance of (i) any capital stock or other  security  (except for
OFPI Common Stock issued upon the exercise of  outstanding  OFPI Options or OFPI
Warrants  described in the OFPI  Disclosure  Schedule),  (ii) any option,  call,
warrant or right to acquire,  or otherwise relating to, any capital stock or any
other security (except for OFPI Options and OFPI Warrants  described in the OFPI
Disclosure Schedule),  or (iii) any instrument  convertible into or exchangeable
for any capital stock or other security;                                        

          (e) there has been no  amendment to the  articles of  organization  or
bylaws of OFPI or any OFPI Subsidiary,  and neither OFPI nor any OFPI Subsidiary
has   effected   or  been  a  party   to  any  OFPI   Acquisition   Transaction,
recapitalization,  reclassification of shares,  stock split, reverse stock split
or similar transaction;                                                         

          (f) neither OFPI nor any OFPI  Subsidiary has amended or waived any of
its rights  under,  or  permitted  the  acceleration  of  vesting  under (i) any
provision  of any  agreement  evidencing  any  outstanding  OFPI  Option or OFPI
Warrant, or (ii) any restricted stock purchase agreement;                       

          (g) neither OFPI nor any OFPI  Subsidiary has formed any subsidiary or
acquired any equity interest or other interest in any other Entity;             

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          (h)  neither  OFPI  nor any  OFPI  Subsidiary  has  made  any  capital
expenditure  which,  when  added to all other  capital  expenditures  made since
December 31, 1998, exceeds $25,000 in the aggregate;                            

          (i) neither  OFPI nor any OFPI  Subsidiary  has (i)  entered  into any
Material  OFPI  Contract  (as defined in Section  3.10(a)),  or (ii)  amended or
prematurely  terminated,  or waived  any  material  right or remedy  under,  any
Material  OFPI  Contract  to which it is or was a party or under which it has or
had any material rights or obligations;                                         

          (j) neither OFPI nor any OFPI  Subsidiary has (i) acquired,  leased or
licensed any right or other asset from any other Person,  (ii) sold or otherwise
disposed  of,  or  leased or  licensed,  any  right or other  asset to any other
Person,  or (iii)  waived or  relinquished  any right,  except for  purchases of
inventory and sales of products in the ordinary course and except for immaterial
rights or other immaterial assets acquired,  leased,  licensed or disposed of in
the ordinary course of business and consistent with past practices;             

          (k)  neither  OFPI  nor  any  OFPI   Subsidiary  has  written  off  as
uncollectible,  or established  any  extraordinary  reserve with respect to, any
account  receivable or other  indebtedness  in excess of $5,000  individually or
$25,000 in the aggregate;                                                       

          (l) neither OFPI nor any OFPI Subsidiary has made any pledge of any of
its assets or  otherwise  permitted  any of its assets to become  subject to any
Encumbrance,   except  for  pledges  of  assets   valued  at  $25,000  or  less,
individually  or in the aggregate,  made in the ordinary  course of business and
consistent with past practices;                                                 

          (m)  neither  OFPI nor any OFPI  Subsidiary  has (i) lent money to any
Person, or (ii) incurred or guaranteed any indebtedness for borrowed money;     

          (n) neither OFPI nor any OFPI Subsidiary has (i) established,  adopted
or  amended  any  Employee  Benefit  Plan,  (ii)  paid  any  bonus  or made  any
profit-sharing  or similar  payment  to, or  increased  the amount of the wages,
salary,  commissions,  fringe  benefits or other  compensation  or  remuneration
payable to, any of its  directors,  officers or  employees,  (iii) hired any new
employee,  in  either  case  except  in the  ordinary  course  of  business  and
consistent  with past practices or (iv) entered into any severance or employment
agreement with any Person;                                                      

          (o)  neither  OFPI  nor any OFPI  Subsidiary  has  changed  any of its
methods of accounting or accounting practices in any material respect;          

       (p) neither OFPI nor any OFPI Subsidiary has made any Tax election;

          (q) neither OFPI nor any OFPI  Subsidiary has commenced or settled any
Legal Proceeding;                                                               

          (r) neither OFPI nor any OFPI Subsidiary has entered into any material
transaction  or taken any other material  action outside the ordinary  course of
business or inconsistent with its past practices;                               

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          (s)  neither  OFPI nor any  OFPI  Subsidiary  has  made  any  material
write-down of inventory; and                                                    

          (t) neither  OFPI nor any OFPI  Subsidiary  has agreed or committed to
take any of the actions referred to in clauses "(c)" through "(s)" above.       

3.6 Title to Assets.                                                  

          (a) OFPI and each OFPI  Subsidiary  owns, and has good and valid title
to,  all  assets  purported  to be  owned  by it,  including  all of the  assets
reflected  in the OFPI SEC  Documents  and all other  assets  reflected  in such
entity's  books and records as being owned by OFPI.  Except as set forth in Part
3.6(a) of the OFPI Disclosure Schedule, all of said assets are owned by OFPI and
each OFPI Subsidiary free and clear of any Encumbrances, except for (i) any lien
for current  taxes not yet due and payable and (ii) minor liens that have arisen
in the  ordinary  course of  business  and that would not (in any case or in the
aggregate) have a Material Adverse Effect on OFPI.                              

          (b) Part 3.6(b) of the OFPI Disclosure  Schedule identifies all assets
that are being leased or licensed to OFPI and each OFPI  Subsidiary that involve
obligations in excess of $25,000 on an individual  basis, that are not otherwise
disclosed in the OFPI SEC Documents.                                            

3.7 Accounts Receivable; Loans and Advances.                          

          (a) All accounts  receivable of OFPI and each OFPI Subsidiary that are
reflected in OFPI SEC Documents or in the  accounting  records of OFPI as of the
date hereof  (collectively,  the "OFPI  Accounts  Receivable")  represent  valid
obligations  arising from sales actually made or services actually  performed in
the ordinary  course of business.  The OFPI Accounts  Receivable are current and
collectible net of any respective reserves shown in the OFPI SEC Documents as of
the date hereof (which reserves are adequate and calculated consistent with past
practice).  There is no contest,  claim, or right of set-off, other than returns
in the ordinary  course of business,  under any Contract with any obligor of any
OFPI  Accounts  Receivable  relating  to the  amount  or  validity  of such OFPI
Accounts Receivable.                                                            

          (b) Part 3.7(b) of OFPI Disclosure  Schedule  contains an accurate and
complete list of all loans and advances made by OFPI or any OFPI Subsidiary (and
pursuant to which amounts are  outstanding as of the date of this  Agreement) to
any employee, director, consultant or independent contractor of OFPI or any OFPI
Subsidiary, other than routine travel advances made to employees in the ordinary
course of business.                                                             

     3.8  Inventory.  Part  3.8 of the  OFPI  Disclosure  Schedule  provides  an
accurate and complete breakdown of all inventory (including raw materials,  work
in process and finished  goods) of OFPI and each OFPI  Subsidiary  as of January
31,  1999.  All of the  existing  inventory  of OFPI  and each  OFPI  Subsidiary
(including  all  inventory  that is reflected  on the  unaudited  balance  sheet
referenced  in Section  3.4(d) and that has not been  disposed of by OFPI or any
OFPI Subsidiary since January 31, 1999):                                        

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          (a) is of such  quality and  quantity as to be usable and  saleable by
OFPI or an OFPI  Subsidiary  in the ordinary  course of business and  consistent
with the past practices of OFPI or an OFPI Subsidiary, as the case may be;      

          (b) has been  priced at the lower of cost or  market  value  using the
"first-in, first-out" method; and                                               

(c) is free of any defect or deficiency.                    

The inventory  levels  maintained by OFPI and each OFPI  Subsidiary  (i) are not
excessive  in  light  of  OFPI's  or such  OFPI  Subsidiary's  normal  operating
requirements,  (ii)  are  adequate  for the  conduct  of  OFPI's  or  such  OFPI
Subsidiary's  operations in the ordinary  course of business and consistent with
past practices,  and (iii) are comparable to the inventory levels  maintained by
OFPI Comparable Entities.                                                       

3.9 Equipment; Leasehold.                                             

          (a) The real property  leased by, and other tangible  assets leased or
owned by OFPI and each OFPI  Subsidiary  are adequate for the uses to which they
are  being  put,  are in good  condition  and  repair  (ordinary  wear  and tear
excepted)  and are  adequate  for the conduct of such  entity's  business in the
manner in which such business is now being conducted.                           

          (b) Neither OFPI nor any OFPI Subsidiary owns any real property or any
material  interest  in real  property,  except  as  described  in the  OFPI  SEC
Documents and set forth on Part 3.9(b) of the OFPI Disclosure Schedule.         

3.10 Proprietary Assets.                                              

          (a) Except as set forth in Part 3.10 of the OFPI Disclosure  Schedule,
there is no  Proprietary  Asset that is owned by or  licensed to OFPI or an OFPI
Subsidiary or that is otherwise  used or useful in connection  with the business
of OFPI or any OFPI Subsidiary.  The OFPI Proprietary  Assets identified in Part
3.10 of the OFPI Disclosure  Schedule  constitute all of the Proprietary  Assets
necessary to enable OFPI and any OFPI  Subsidiary to conduct its business in the
manner in which its business is currently  being  conducted and in the manner in
which its business is proposed to be conducted.                                 

          (b) To the Knowledge of OFPI,  OFPI and each OFPI  Subsidiary has good
and  valid  title  to  all  OFPI  Proprietary  Assets  free  and  clear  of  all
Encumbrances,  and has a valid right to use all OFPI Proprietary Assets. Neither
OFPI nor any OFPI  Subsidiary is obligated to make any payment to any Person for
the use of any OFPI  Proprietary  Asset. To the Knowledge of OFPI, OFPI and each
OFPI  Subsidiary is free to use,  modify,  copy,  distribute,  sell,  license or
otherwise  exploit each of the OFPI  Proprietary  Assets on an  exclusive  basis
(except  for any  Proprietary  Asset  that  is  licensed  to  OFPI  or any  OFPI
Subsidiary  on a  non-exclusive  basis  under any third party  software  license
generally available to the public at a cost of less than $2,500).               

          (c) OFPI and each OFPI  Subsidiary has taken  reasonable  measures and
precautions necessary to protect and maintain the confidentiality and secrecy of
all OFPI Proprietary Assets (except OFPI Proprietary Assets whose value would be

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unimpaired by public disclosure) and otherwise to maintain and protect the value
of all  OFPI  Proprietary  Assets.  Neither  OFPI nor any  OFPI  Subsidiary  has
disclosed  or delivered or permitted to be disclosed or delivered to any Person,
and no Person  (other than OFPI or a OFPI  Subsidiary)  has access to or has any
rights  with  respect  to any OFPI  Proprietary  Asset,  in either  case  except
pursuant to a valid non-disclosure agreement.                                   

          (d) To the  Knowledge  of OFPI,  none of the OFPI  Proprietary  Assets
infringes or  conflicts  with any  Proprietary  Asset owned or used by any other
Person.  To the  knowledge  of OFPI,  neither  OFPI nor any OFPI  Subsidiary  is
infringing, misappropriating or making any unlawful use of, and neither OFPI nor
any OFPI  Subsidiary  has at any  time  infringed,  misappropriated  or made any
unlawful  use of, or received any notice or other  communication  of any actual,
alleged,  possible or potential  infringement,  misappropriation or unlawful use
of, any Proprietary Asset owned or used by any other Person. To the Knowledge of
OFPI, no other Person is infringing, misappropriating or making any unlawful use
of, and no  Proprietary  Asset owned or used by any other  Person  infringes  or
conflicts with, any OFPI Proprietary Asset.                                     

          (e) OFPI  Proprietary  Assets  constitute all the  Proprietary  Assets
necessary to enable OFPI and each OFPI Subsidiary to conduct its business in the
manner in which such  business  has been  conducted.  Neither  OFPI nor any OFPI
Subsidiary has licensed any of the OFPI  Proprietary  Assets to any Person on an
exclusive  basis,  and neither OFPI nor any OFPI Subsidiary has entered into any
covenant not to compete or Contract limiting its ability to exploit fully any of
its  Proprietary  Assets or to transact  business in any market or  geographical
area or with any Person.                                                        

          (f) No shareholder,  officer or director of OFPI has title to any OFPI
Proprietary  Asset  which  would be  necessary  to enable  OFPI to  conduct  its
business in the manner in which such business is currently being conducted.     

3.11 Contracts.                                                       

          (a) Part 3.11(a) (and Part 3.9(b)  regarding  leases of real property)
of the OFPI Disclosure Schedule identifies each OFPI Contract that constitutes a
"Material  OFPI  Contract."  For purposes of this  Agreement,  a "Material  OFPI
Contract" shall be deemed to be any OFPI Contract:                              

               (i)  relating  to  the   employment  or  engagement  of,  or  the
performance of services by, any employee,  consultant or independent  contractor
which  involves a  potential  commitment  of OFPI in excess of $25,000 per year,
including  any  OFPI  Contract  involving  severance  payments  or  acceleration
benefits upon a OFPI Acquisition Transaction;                                   

               (ii) relating to the  acquisition,  transfer,  use,  development,
sharing or license of any OFPI Proprietary  Asset (except in the ordinary course
of business and except for any OFPI  Proprietary  Asset that is licensed to OFPI
or any  OFPI  Subsidiary  under  any  third  party  software  license  agreement
generally available to the public at a cost of less than $25,000);              

               (iii)  imposing  any material  restriction  on OFPI's or any OFPI
Subsidiary's  right or ability  (A) to  compete  with any other  Person,  (B) to
acquire any product or other asset or any  services  from any other  Person,  to
sell any product or other asset to or perform any  services for any other Person
or to transact  business or deal in any other manner with any other  Person,  or
(C) to develop or distribute any OFPI Proprietary Asset;                        

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               (iv) creating or involving any agency relationship,  distribution
arrangement  or  franchise  relationship  involving  payments to or from OFPI or
obligations in excess of $25,000 per year;                                      

               (v)  relating  to the  acquisition,  issuance  or transfer of any
securities of OFPI or any OFPI Subsidiary;                                      

               (vi) creating or relating to the creation of any Encumbrance with
respect to any asset owned or used by OFPI or any OFPI Subsidiary having a value
in excess of $25,000;                                                           

               (vii) involving or incorporating  any guaranty,  any pledge,  any
performance or completion bond, any indemnity,  any right of contribution or any
surety arrangement in excess of $25,000 per year;                               

               (viii)  creating or relating to any  partnership or joint venture
or any material sharing of revenues, profits, losses, costs or liabilities;     

               (ix)  relating  to the  purchase  or sale of any product or other
asset by or to, or the  performance of any services by or for, any Related Party
(as defined in Section 3.20);                                                   

       (x) entered into outside the ordinary course of business;

               (xi) that may not be terminated  by OFPI or such OFPI  Subsidiary
(without penalty) within 120 days after the delivery of a termination  notice by
OFPI or such OFPI  Subsidiary  and which  involves  payments or  commitments  of
$5,000 or more;                                                                 

               (xii)  contemplating  or involving (A) the payment or delivery of
cash or other  consideration in an amount or having a value in excess of $25,000
in the aggregate, or (B) the performance of services having a value in excess of
$25,000 in the aggregate; and                                                   

(xiii) which is a lease of real property.         

          (b) OFPI has delivered to the Company  accurate and complete copies of
all OFPI  Material  Contracts  identified  in Part  3.11(a)  of OFPI  Disclosure
Schedule,   including  all  amendments  thereto.  Each  Material  OFPI  Contract
identified in Part 3.11(a) of the OFPI Disclosure  Schedule is valid and in full
force  and  effect,  and is  enforceable  by  OFPI or such  OFPI  Subsidiary  in
accordance with its terms,  subject to (i) laws of general application  relating
to  bankruptcy,  insolvency  and the  relief of  debtors,  and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies. 

               (i)  neither  OFPI  nor  any  OFPI  Subsidiary  (nor,  to  OFPI's
knowledge,  any other party) has materially  violated or breached,  or committed
any material default under, any OFPI Material Contract;                         

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               (ii) to the  knowledge  of OFPI,  no event has  occurred,  and no
circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, (A) result in a violation or breach of
any of the  provisions  of any OFPI Material  Contract,  (B) give any Person the
right to  declare a default  or  exercise  any  remedy  under any OFPI  Material
Contract,  (C)  give  any  Person  the  right  to  accelerate  the  maturity  or
performance of any OFPI Material  Contract,  or (D) give any Person the right to
cancel, terminate or modify any OFPI Material Contract;                         

               (iii)  since  January  31,  1999,   neither  OFPI  nor  any  OFPI
Subsidiary  has received  any notice or other  communication  regarding  (i) any
actual or possible  violation or breach of, or default under,  any OFPI Material
Contract,  or (ii) any  actual  or  possible  termination  of any OFPI  Material
Contract; and                                                                   

               (iv) neither OFPI nor any OFPI  Subsidiary  has waived any of its
material rights under any OFPI Material Contract.                               

     3.12 No  Undisclosed  Liabilities.  Except  as set  forth  in the  OFPI SEC
Documents and except for current liabilities  incurred in the ordinary course of
business  since  January 31,  1999,  neither  OFPI nor any OFPI  Subsidiary  has
accrued,  contingent  or other  liabilities  of any  nature,  either  matured or
unmatured.                                                                      

     3.13 Compliance with Legal Requirements.  OFPI and each OFPI Subsidiary is,
and has at all times been, in compliance with all applicable Legal Requirements,
except where the failure to comply with such Legal  Requirements has not had and
will not have a Material Adverse Effect on OFPI and its Subsidiaries  taken as a
whole.  Neither  OFPI nor any OFPI  Subsidiary  has received any notice or other
communication  from any  Governmental  Body  regarding  any  actual or  possible
violation  of, or  failure  to comply  with,  any Legal  Requirement;  provided,
however,  that this representation shall not apply to the matters covered by the
representations contained in Sections 3.15, 3.16 and 3.17.                      

     3.14  Governmental  Authorizations.  OFPI and each OFPI  Subsidiary has all
Governmental Authorizations necessary to enable OFPI and such OFPI Subsidiary to
conduct its  business in the manner in which its  business  is  currently  being
conducted, except for Governmental Authorizations the failure of which to obtain
would not have a Material  Adverse Effect on OFPI. OFPI and each OFPI Subsidiary
is,  and at all  times has  been,  in  compliance  with the  material  terms and
requirements of such Governmental  Authorizations,  except for any noncompliance
which would not have a Material  Adverse  Effect on OFPI.  Neither  OFPI nor any
OFPI  Subsidiary  has  received  any  notice  or  other  communication  from any
Governmental  Body regarding (a) any actual or possible  violation of or failure
to comply with any term or requirement of any Governmental Authorization, or (b)
any  actual  or  possible  revocation,  withdrawal,  suspension,   cancellation,
termination or modification of any Governmental Authorization.                  

3.15 Tax Matters.                                                     

          (a) All Material  Tax Returns  required to be filed by or on behalf of
OFPI with any Governmental Body with respect to any transaction occurring or any
taxable period ending on or before the date hereof (the "OFPI Returns") (i) have

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been filed when due, and (ii) have been  accurately and  completely  prepared in
compliance with all applicable Legal Requirements. OFPI and each OFPI Subsidiary
has,  within the time  (including any extensions of applicable due dates) and in
the manner  prescribed by law,  paid all Taxes that are due and payable,  except
Taxes  that,   individually  and  in  the  aggregate,   are  not  material.  The
consolidated  financial  statements of OFPI  contained in the OFPI SEC Documents
fully accrue all actual and contingent liabilities for Taxes with respect to all
periods  through  the  dates  thereof  in  accordance  with  generally  accepted
accounting principles.                                                          

          (b) No claim or Legal  Proceeding  is pending  or has been  threatened
against or with  respect to OFPI or any OFPI  Subsidiary  in respect of any Tax.
There are no  unsatisfied  liabilities  for  Taxes  (including  liabilities  for
interest,  additions to tax and  penalties  thereon and related  expenses)  with
respect to any notice of deficiency or similar document  received by OFPI or any
OFPI Subsidiary.  There are no liens for Taxes upon any of the assets of OFPI or
any OFPI Subsidiary, except liens for current Taxes not yet due and payable.    

3.16 Employee and Labor Matters; Benefit Plans.                       

          (a) Part 3.16(a) of the OFPI  Disclosure  Schedule  contains a list of
all salaried  employees of OFPI and each OFPI  Subsidiary as of the date of this
Agreement whose annual salaries are greater than $30,000, and correctly reflects
their salaries,  any other compensation payable to them (including  compensation
payable pursuant to bonus,  deferred  compensation or commission  arrangements),
their  dates  of  employment  and  their  positions.  Neither  OFPI nor any OFPI
Subsidiary is a party to any  collective  bargaining  contract or other Contract
with a labor union involving any of its employees.                              

          (b) Part  3.16(b) of the OFPI  Disclosure  Documents  identifies  each
salary, bonus, deferred compensation,  incentive  compensation,  stock purchase,
stock  option,   severance  pay,  termination  pay,   hospitalization,   health,
insurance,  supplemental  unemployment  benefits,  profit-sharing,   pension  or
retirement plan, program or agreement (individually referred to as a "OFPI Plan"
and  collectively  referred  to as  the  "OFPI  Plans")  sponsored,  maintained,
contributed to or required to be  contributed to by OFPI or any OFPI  Subsidiary
for  the  benefit  of any  current  or  former  employee  of  OFPI  or any  OFPI
Subsidiary.                                                                     

          (c)  Neither  OFPI  nor any OFPI  Subsidiary  maintains,  sponsors  or
contributes  to,  and,  to the  knowledge  of  OFPI,  neither  OFPI nor any OFPI
Subsidiary has at any time in the past maintained,  sponsored or contributed to,
any  employee  pension  benefit plan (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")),  subject to Title
IV of ERISA for the benefit of  employees  or former  employees of OFPI (a "OFPI
Defined Benefit Plan").                                                         

          (d)  Neither  OFPI  or any  OFPI  Subsidiary  maintains,  sponsors  or
contributes to any employee  welfare benefit plan (as defined in Section 3(1) of
ERISA,  whether or not excluded from coverage  under  specific  Titles or Merger
Subtitles of ERISA) for the benefit of employees or former  employees of OFPI or
any OFPI Subsidiary.                                                            

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          (e) With  respect to each OFPI Plan,  OFPI has made  available  to the
Company:                                                                        

               (i) an accurate  and complete  copy of such OFPI Plan  (including
all amendments thereto);                                                        

               (ii) an  accurate  and  complete  copy of the  annual  report (if
required  under  ERISA)  with  respect  to such OFPI Plan for the three (3) most
recent plan years;                                                              

               (iii)  an  accurate  and  complete  copy of (A) the  most  recent
summary plan description,  together with each summary of material  modifications
thereto (if required  under ERISA) with respect to such OFPI Plan,  and (B) each
material employee communication relating to such OFPI Plan;                     

               (iv) if such  OFPI  Plan is  funded  through a trust or any third
party  funding  vehicle,  an accurate  and  complete  copy of the trust or other
funding agreement  (including all amendments  thereto) and accurate and complete
copies the most recent financial statements thereof;                            

               (v)  accurate and complete  copies of all  Contracts  relating to
such OFPI Plan,  including  service provider  agreements,  insurance  contracts,
minimum  premium  contracts,   stop-loss   agreements,   investment   management
agreements,   subscription  and   participation   agreements  and  recordkeeping
agreements; and                                                                 

               (vi)  an  accurate   and   complete   copy  of  the  most  recent
determination,  notification,  advisory  and/or opinion letter received from the
Internal  Revenue  Service  with respect to such OFPI Plan (if such OFPI Plan is
intended to be qualified under Section 401(a) of the Code).                     

          (f) Neither  OFPI nor any OFPI  Subsidiary  is required to be, and, to
the  knowledge  of OFPI,  neither  OFPI nor any OFPI  Subsidiary  has ever  been
required to be, treated as a single employer with any other Person under Section
4001(b)(1) of ERISA or Section 414(b), (c), (m) or (o) of the Code. Neither OFPI
nor any OFPI Subsidiary has ever been a member of an "affiliated  service group"
within the  meaning of Section  414(m) of the Code.  To the  knowledge  of OFPI,
neither  OFPI nor any  OFPI  Subsidiary  has ever  made a  complete  or  partial
withdrawal  from a  "multiemployer  plan" (as defined in Section 3(37) of ERISA)
resulting  in  "withdrawal  liability"  (as  defined in Section  4201 of ERISA),
without regard to subsequent  reduction or waiver of such liability under either
Section 4207 or 4208 of ERISA.                                                  

          (g) Neither OFPI nor any OFPI Subsidiary has any plan or commitment to
create any additional OFPI employee benefit plan within the meaning of ERISA, or
to modify or change any such plan (other than to comply with applicable law).   

          (h) No OFPI Welfare Plan provides  death,  medical or health  benefits
(whether or not insured) with respect to any current or former  employee of OFPI
or any OFPI Subsidiary  after any such employee's  termination of service (other
than (i)  benefit  coverage  mandated  by  applicable  law,  including  coverage
provided  pursuant  to Section  4980B of the Code,  (ii)  deferred  compensation

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benefits  accrued  as  liabilities  on  the  consolidated  financial  statements
included in the OFPI SEC  Documents,  and (iii)  benefits the full cost of which
are borne by  current or former  employees  of OFPI or any OFPI  Subsidiary  (or
their beneficiaries)).                                                          

          (i) With respect to each of OFPI Welfare  Plans  constituting  a group
health  plan  within  the  meaning  of  Section  4980B(g)(2)  of the  Code,  the
provisions of the  Consolidated  Omnibus Budget  Reconciliation  Act of 1985, as
amended ("COBRA") have been complied with in all material respects.             

    (j) Each of the OFPI Plans has been operated and administered in
all  material  respects  in  accordance  with  applicable  Legal   Requirements,
including ERISA and the Code.                                                   

          (k) Each of the OFPI Plans  intended  to be  qualified  under  Section
401(a) of the Code has  received a  favorable  determination  from the  Internal
Revenue Service,  and OFPI is not aware of any reason why any such determination
letter should be revoked.                                                       

          (l) Neither the execution,  delivery or performance of this Agreement,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement,  will result in any bonus payment,  golden parachute payment,
severance payment or other payment to any current or former employee or director
of OFPI or any  OFPI  Subsidiary  (whether  or not  under  any  OFPI  Plan),  or
materially  increase the benefits  payable under any OFPI Plan, or result in any
acceleration of the time of payment or vesting of any such benefits.            

          (m) OFPI and each OFPI  Subsidiary  is in  compliance  in all material
respects  with all  applicable  Legal  Requirements  and  Contracts  relating to
employment,  employment  practices,  employee  compensation,  wages, bonuses and
terms and conditions of employment.                                             

     3.17 Environmental Matters. OFPI and each OFPI Subsidiary is and has at all
times  been  in  compliance,  in all  material  respects,  with  all  applicable
Environmental  Laws.  OFPI and each OFPI  Subsidiary  possesses  all permits and
other Governmental  Authorizations required under applicable Environmental Laws,
and OFPI and each OFPI  Subsidiary  is and has at all times  been in  compliance
with the terms and requirements of all such Governmental  Authorizations  except
where the failure to possess such  Governmental  Authorizations or failure to be
in compliance would not have a Material Adverse Effect on OFPI. Neither OFPI nor
any OFPI Subsidiary has received any notice or other communication (whether from
a Governmental  Body,  citizens group,  employee or otherwise) that alleges that
OFPI or any OFPI Subsidiary is not in compliance with any Environmental  Law. To
the knowledge of OFPI, no current or prior owner of any property leased or owned
by  OFPI  and/or  such  OFPI   Subsidiary  has  received  any  notice  or  other
communication  (whether from a Governmental  Body,  citizens group,  employee or
otherwise)  that  alleges  that such  current or prior owner or OFPI and/or such
OFPI Subsidiary is not or was not in compliance with any  Environmental  Law. To
the Knowledge of OFPI, no Materials of Environmental  Concern have been released
or are  located  on or under  any  property  leased or owned by OFPI or any OFPI
Subsidiary.  Neither  OFPI nor any OFPI  Subsidiary  has  received any notice or
other communication  (whether from a Governmental Body, citizens group, employee
or  otherwise)  regarding  a  release  of, or the  existence  of,  Materials  of
environmental concern at, under or about any property leased or owned by OFPI or
any OFPI Subsidiary.                                                            

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3.18 Sale of Products; Performance of Services.                       

          (a) Each product that has been sold by OFPI or any OFPI  Subsidiary to
any Person:                                                                     

               (i)  conformed  and complied in all  respects  with the terms and
requirements  of  any  applicable  warranty  or  other  Contract  and  with  all
applicable Legal Requirements; and                                              

               (ii) was free of any  design  defects,  construction  defects  or
other defects or deficiencies at the time of sale.                              

All  services  that  have been  performed  by OFPI or any OFPI  Subsidiary  were
performed properly and in full conformity with the terms and requirements of all
applicable  warranties  and  other  Contracts  and  with  all  applicable  Legal
Requirements.                                                                   

          (b) To the  Knowledge of OFPI,  neither  OFPI nor any OFPI  Subsidiary
will incur or otherwise  become  subject to any  Liability  arising  directly or
indirectly  from any product  manufactured  or sold,  or any repair  services or
other services performed by, OFPI or any OFPI Subsidiary on or at any time prior
to the Closing Date.                                                            

          (c) To the Knowledge of OFPI, no product  manufactured or sold by OFPI
or any OFPI  Subsidiary  has been the  subject  of any  recall or other  similar
action; and no event has occurred, and no condition or circumstance exists, that
might (with or without notice or lapse of time) directly or indirectly give rise
to or serve as a basis for any such recall or other similar  action  relating to
any such product.                                                               

          (d) Except as set forth in Part 3.18 of the OFPI Disclosure  Schedule,
no customer or other Person has ever  asserted or threatened to assert any claim
against  OFPI or any  OFPI  Subsidiary  (i)  under or  based  upon any  warranty
provided  by or on behalf of the OFPI or any OFPI  Subsidiary,  or (ii) under or
based upon any other  warranty  relating to any product sold by OFPI or any OFPI
Subsidiary  or any  services  performed by OFPI or any OFPI  Subsidiary.  To the
Knowledge of OFPI,  no event has  occurred,  and no  condition  or  circumstance
exists,  that  might  (with or  without  notice  or lapse of time)  directly  or
indirectly give rise to or serve as a basis for the assertion of any such claim.

          (e) OFPI and  each  OFPI  Subsidiary  has in  place  an  adequate  and
appropriate  quality  control  system  that is at  least  as  comprehensive  and
effective  as  the  quality  control  systems  customarily  maintained  by  OFPI
Comparable Entities.                                                            

     3.19  Insurance.  The  business  and  properties  of  OFPI  and  each  OFPI
Subsidiary  are  insured  for the  benefit  of OFPI or such OFPI  Subsidiary  in
amounts  deemed  adequate by OFPI's  management  against risks  usually  insured
against by persons  operating  businesses  similar to those of OFPI or such OFPI
Subsidiary  in the  localities  where  such  properties  are  located.  OFPI has
received no notice of  cancellation  or refusal of coverage and copies of all of
such insurance policies have been delivered to the Company.                     

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     3.20  Related  Party  Transactions.  Except  as set  forth  in the OFPI SEC
Documents:  (a) no Related Party has, and no Related Party has at any time since
June 30, 1995 had, any direct or indirect interest in any material asset used in
or  otherwise  relating to the business of OFPI or any OFPI  Subsidiary;  (b) no
Related Party is, or has at any time since June 30, 1995 been,  indebted to OFPI
or any OFPI  Subsidiary;  (c) since June 30, 1995,  no Related Party has entered
into, or has had any direct or indirect financial interest in, any Material OFPI
Contract, transaction or business dealing involving OFPI or any OFPI Subsidiary;
(d) no  Related  Party is  competing,  or has at any time  since  June 30,  1995
competed,  directly or indirectly,  with OFPI or any OFPI Subsidiary; and (e) no
Related Party has any claim or right against OFPI or any OFPI Subsidiary  (other
than rights to receive  compensation  for  services  performed as an employee of
OFPI or any OFPI  Subsidiary).  (For purposes of this Section 3.20,  each of the
following shall be deemed to be a "Related  Party":  (i) each individual who is,
or who has at any time since June 30, 1995 been,  an officer or director of OFPI
or any OFPI  Subsidiary;  (ii) each  individual who is, or who at any time since
June 30, 1995 been, a member of the immediate  family of any of the  individuals
referred to in clause "(i)" above;  (iii) any 5%  shareholder  of the OFPI;  and
(iv) any trust or other Entity (other than OFPI or a OFPI  Subsidiary)  in which
any one of the  individuals  referred  to in clauses  "(i),"  "(ii)" and "(iii)"
above holds (or in which more than one of such individuals  collectively  hold),
beneficially or otherwise, a material voting, proprietary or equity interest.)  

     3.21 Legal Proceedings;  Orders. There is no pending Legal Proceeding, and,
to the  knowledge  of OFPI,  no Person  has  threatened  to  commence  any Legal
Proceeding  that:  (i) may have a  Material  Adverse  Effect  on OFPI,  any OFPI
Subsidiary or their respective businesses;  or (ii) challenges, or that may have
the effect of  preventing,  delaying,  making  illegal or otherwise  interfering
with,  the  Merger  or  any of  the  other  transactions  contemplated  by  this
Agreement.  To the  knowledge  of OFPI,  no event  has  occurred,  and no claim,
dispute or other  condition or  circumstance  exists,  that could  reasonably be
expected  to give rise to or serve as a basis for the  commencement  of any such
Legal Proceeding.  There is no order,  writ,  injunction,  judgment or decree to
which OFPI or any OFPI Subsidiary, or any of the assets owned or used by OFPI or
any OFPI Subsidiary,  is subject.  To the knowledge of OFPI, no officer or other
employee  of  OFPI  or any  OFPI  Subsidiary  is  subject  to any  order,  writ,
injunction,  judgment or decree that  prohibits  such officer or other  employee
from engaging in or  continuing  any conduct,  activity or practice  relating to
OFPI's or such OFPI Subsidiary's business.  There is no action, suit, proceeding
or investigation by OFPI or any OFPI Subsidiary  currently pending or which OFPI
or any OFPI Subsidiary intends to initiate.                                     

     3.22  Authority;  Binding  Nature of  Agreement.  OFPI has the absolute and
unrestricted  right,  power and authority to perform its obligations  under this
Agreement;  the  execution,  delivery and  performance by OFPI of this Agreement
have been duly  authorized by all  necessary  action on the part of OFPI and its
Board of Directors.  This  Agreement  constitutes  the legal,  valid and binding
obligation  of OFPI,  enforceable  against  OFPI in  accordance  with its terms,
except as enforcement  thereof may be limited by (i) laws of general application
relating to bankruptcy, insolvency, moratorium,  reorganization or other similar
laws, both state and federal,  affecting the enforcement of creditors' rights or
remedies  in  general,  and (ii) rules of law  governing  specific  performance,
injunctive relief and other equitable remedies.                                 

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     3.23 Non-Contravention;  Consents.  Except as set forth in Part 3.23 of the
OFPI Disclosure Schedule, neither (1) the execution,  delivery or performance of
this Agreement or any of the other agreements referred to in this Agreement, nor
(2) the consummation of the Merger or any of the other transactions contemplated
by this Agreement,  will directly or indirectly (with or without notice or lapse
of time):                                                                       

          (a)  contravene,  conflict with or result in a violation of any of the
provisions  of  OFPI's  or  any  OFPI  Subsidiary's  articles  of  organization,
certificate of incorporation or bylaws;                                         

          (b) with respect to OFPI or any OFPI Subsidiary,  contravene, conflict
with or result in a violation of, or give any Governmental  Body or other Person
the right to challenge any of the transactions contemplated by this Agreement or
to exercise any remedy or obtain any relief under, any Legal  Requirement or any
order,  writ,  injunction,  judgment  or  decree  to  which  OFPI  or  any  OFPI
Subsidiary,  or any of the assets owned or used by OFPI or any OFPI  Subsidiary,
is subject;                                                                     

          (c) with respect to OFPI or any OFPI Subsidiary,  contravene, conflict
with or result in a violation  of any of the terms or  requirements  of, or give
any  Governmental  Body  the  right  to  revoke,   withdraw,   any  Governmental
Authorization  that is held by OFPI or any  OFPI  Subsidiary  or that  otherwise
relates  to OFPI's or any OFPI  Subsidiary's  business  or to any of the  assets
owned or used by OFPI or any OFPI Subsidiary;                                   

          (d)  contravene,  conflict with or result in a violation of breach of,
or result in a default under,  any provision of any Material OFPI  Contract,  or
give any Person the right to (i) declare a default or exercise  any remedy under
any Material OFPI Contract,  (ii)  accelerate the maturity or performance of any
Material OFPI Contract,  or (iii) cancel,  terminate or modify any Material OFPI
Contract; or                                                                    

          (e)  result  in the  imposition  or  creation  of any  lien  or  other
Encumbrance  upon or with respect to any asset owned or used by OFPI or any OFPI
Subsidiary  (except  for  minor  liens  that  will  not,  in any  case or in the
aggregate,  materially  detract from the value of the assets subject  thereto or
have a Material Adverse Effect on OFPI).                                        

Except as may be  required  by the  Securities  Act,  the  Exchange  Act,  state
securities or "blue sky" laws,  the CGCL, and the NASD Bylaws (as they relate to
the Joint Proxy Statement),  neither OFPI nor any OFPI Subsidiary is nor will be
required to make any filing with or give any notice to, or to obtain any Consent
from, any Person in connection  with (x) the execution,  delivery or performance
of this Agreement or any other agreement  referred to in this Agreement,  or (y)
or the consummation of the Merger.                                              

     3.24 Vote  Required.  The  affirmative  vote of a majority of the shares of
OFPI Common Stock (the  "Requisite  OFPI Vote") present in person or by proxy at
the OFPI Shareholders'  Meeting at which a quorum is present is the only vote of
the holders of any class or series of OFPI's capital stock  necessary to approve
the issuance of the Merger Shares and to adopt and approve this  Agreement,  the
Merger and the transactions  contemplated thereby,  including but not limited to
the Restated Articles.                                                          

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     3.25 OFPI Action.  The Board of Directors of OFPI (at a meeting duly called
and held) has (a)  unanimously  determined that the Merger is advisable and fair
and in the best interests of OFPI and its shareholders, (b) unanimously approved
this  Agreement,  the Merger and the Restated  Articles in  accordance  with the
applicable provisions of the CGCL, and (c) unanimously  recommended the adoption
and  approval of this  Agreement,  the Merger and the  Restated  Articles by the
holders of OFPI Common Stock and directed  that this  Agreement,  the Merger and
the Restated Articles be submitted for consideration by the OFPI's  shareholders
at the OFPI  Shareholders'  Meeting.  With respect to any action of the Board of
Directors of OFPI described in this Section 3.25,  any unanimous  determination,
approval or  recommendation of such Board shall refer to the unanimous action of
the disinterested members of such Board, as applicable.                         

3.26 Full Disclosure.                                                 

          (a)  To  OFPI's  knowledge,  all  documents,  contracts,  instruments,
certificates,   notices,  consents,  affidavits,  letters,  telegrams,  telexes,
written statements, schedules (including the OFPI Disclosure Schedule), exhibits
(including  the  Exhibits to this  Agreement)  and any other  papers  whatsoever
(excluding in all cases drafts and interim  versions  marked as such or apparent
as such on their face)  delivered to the Company by OFPI in connection with this
Agreement  and the  transactions  contemplated  thereby,  are true and  complete
copies  thereof.  The  representations  and warranties of OFPI contained in this
Agreement,  as  modified  by the OFPI  Disclosure  Schedule,  contain  no untrue
statements  of any material  fact or omit to state any material fact required to
be stated therein or necessary to make the statements  therein,  in light of the
circumstances under which they were made, not false or misleading.              

          (b) The information  supplied by OFPI for inclusion in the Joint Proxy
Statement (including the OFPI Financial  Statements) will not, as of the date of
the Joint Proxy  Statement or as of the date of the OFPI  Shareholders'  Meeting
(as defined in Section 5.5),  and in each case, as of the date such  information
is prepared or presented, contain any statement that is inaccurate or misleading
with  respect to any  material  fact,  or (ii) omit to state any  material  fact
necessary in order to make such information not false or misleading.            

     3.27  Finder's Fee. No broker,  finder or investment  banker is entitled to
any brokerage, finder's or other fee or commission in connection with the Merger
or any of the other  transactions  contemplated  thereby based upon arrangements
made by or on behalf of OFPI or any of its subsidiaries.                        

SECTION 4. CERTAIN COVENANTS OF THE COMPANY.                                    

     4.1 Access  and  Investigation.  During  the  period  from the date of this
Agreement  through the Effective Time (the  "Pre-Closing  Period"),  the Company
shall,  and shall  cause its  Representatives  to: (a)  provide  OFPI and OFPI's
Representatives  with  reasonable  access  to  the  Company's   Representatives,
personnel  and assets and to all existing  books,  records,  Tax  Returns,  work
papers and other  documents  and  information  relating  to the Company and each
Company  Subsidiary  and (b) provide OFPI and OFPI s  Representatives  with such
copies of the  existing  books,  records,  Tax  Returns,  work  papers and other
documents and information  relating to the Company and each Company  Subsidiary,
and with such  additional  financial,  operating and other data and  information
regarding  the  Company  and each  Company  Subsidiary,  as OFPI may  reasonably
request.                                                                        

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     4.2 Operation of the Company's Business.  Except as agreed to in writing by
OFPI,  during the Pre-Closing  Period,  the Company shall,  and shall cause each
Company Subsidiary to:                                                          

          (a) conduct its business and operations in the ordinary  course and in
substantially  the  same  manner  as such  business  and  operations  have  been
conducted prior to the date of this Agreement;                                  

          (b) use  reasonable  efforts to preserve  intact its current  business
organization,  keep available the services of its current officers and employees
and  maintain  its  relations  and  goodwill  with  all  suppliers,   customers,
landlords,  creditors, employees and other Persons having business relationships
with the Company or any Company Subsidiary;                                     

          (c) keep in full force all insurance policies in effect as of the date
of this Agreement;                                                              

 (d) cause its officers to report regularly to OFPI concerning
the status of the Company's and the Company Subsidiaries' businesses;           

          (e) not  declare,  accrue,  set aside or pay any  dividend or make any
other  distribution  in respect of any  shares of capital  stock,  and shall not
repurchase,  redeem or otherwise  reacquire any shares of capital stock or other
securities  (other than  repurchases  of unvested  shares  from  employees  upon
termination of employment);                                                     

          (f) not sell, issue or authorize the issuance of (i) any capital stock
or other  security,  (ii) any  option,  call,  warrant or right to  acquire,  or
relating  to,  any  capital  stock or other  security,  or (iii) any  instrument
convertible into or exchangeable for any capital stock or other security (except
that the Company  shall be  permitted  to issue  Company  Common  Stock upon the
exercise  of  outstanding  Company  Options or upon  conversion  of  convertible
securities outstanding on the date hereof) and the Company may continue to grant
stock options in the ordinary course and consistent with past practice, provided
that any such  options  shall  be  subject  to the  Company's  standard  vesting
schedule (but such options  shall not vest more than 25% per year  following the
grant  thereof)  and in no event shall any such options  contain any  provisions
pursuant to which the vesting of such options may or would be accelerated in any
respect  upon  any  change  in  control  transaction  or any  other  transaction
(including without limitation the Merger) or any similar provision;             

          (g) not  amend  or  waive  any of its  rights  under,  or  permit  the
acceleration  of vesting  under any provision of any  agreement  evidencing  any
outstanding Company Option;                                                     

          (h) not amend or permit the adoption of any amendment to the Company's
articles  of  incorporation  or bylaws,  or effect or permit the  Company or any
Company  Subsidiary  to become a party to any Company  Acquisition  Transaction,
recapitalization,  reclassification of shares,  stock split, reverse stock split
or similar transaction;                                                         

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          (i) not form any  subsidiary  or acquire any equity  interest or other
interest in any other Entity;                                                   

          (j) not make any capital expenditure,  except for capital expenditures
that,  when added to all other capital  expenditures  made by the Company or any
Company Subsidiary during the Pre-Closing  Period, do not exceed $100,000 in the
aggregate;                                                                      

          (k) not (i) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any Material  Company Contract except in
the ordinary  course of business,  or (ii) amend or  prematurely  terminate,  or
waive any material right or remedy under, any Material Company Contract;        

          (l) not (i)  acquire,  lease or license  any  material  right or other
material  asset from any other  Person,  (ii) sell or  otherwise  dispose of, or
lease or  license,  any  material  right or other  material  asset to any  other
Person,  or (iii) waive or  relinquish  any  material  right,  other than in the
ordinary course of business and except for immaterial  assets acquired,  leased,
licensed  or  disposed of by the  Company  pursuant  to  Contracts  that are not
Material Company Contracts;                                                     

          (m) not (i) lend money to any Person,  or (ii) incur or guarantee  any
indebtedness,  except for  routine  advances of  expenses  to  employees  in the
ordinary  course of  business  and  except  that the  Company  and each  Company
Subsidiary may make routine  borrowings in the ordinary course of business under
its existing bank lines of credit;                                              

          (n) not (i) pay any  bonus  or  make  any  profit-sharing  or  similar
payment to, or increase  the amount of the wages,  salary,  commissions,  fringe
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees,  other than in the ordinary course of business and solely
with respect to non-officers and non-directors or (ii) establish, adopt or amend
any Employee Benefit Plan;                                                      

          (o)  not  change  any of  its  methods  of  accounting  or  accounting
practices in any respect;                                                       

(p) not make any Tax election;                              

          (q) not commence or settle any Legal  Proceeding  not disclosed in the
Company Disclosure Schedule;                                                    

          (r) not enter into any material transaction or take any other material
action  outside the ordinary  course of business or  inconsistent  with its past
practices; and                                                                  

          (s) not  agree or  commit  to take  any of the  actions  described  in
clauses "(e)" through "(r)" of this Section 4.2.                                

4.3 Notification; Updates to Company Disclosure Schedule.             

          (a) During the Pre-Closing  Period,  the Company shall promptly notify
OFPI in writing of:                                                             

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               (i) the discovery by the Company of any event, condition, fact or
circumstance  that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes an inaccuracy in or breach of any  representation
or warranty made by the Company in this Agreement;                              

               (ii) any event,  condition,  fact or  circumstance  that  occurs,
arises  or exists  after  the date of this  Agreement  and that  would  cause or
constitute an inaccuracy in or breach of any  representation or warranty made by
the Company in this  Agreement if (A) such  representation  or warranty had been
made as of the time of the  occurrence,  existence  or  discovery of such event,
condition,  fact  or  circumstance,  or  (B)  such  event,  condition,  fact  or
circumstance  had  occurred,  arisen or  existed on or prior to the date of this
Agreement;                                                                      

               (iii) any breach of any  covenant  or  obligation  of the Company
hereunder; and                                                                  

               (iv) any event,  condition,  fact or circumstance that would make
the  timely  satisfaction  of any of the  conditions  set forth in  Section 7 or
Section 8 impossible or unlikely.                                               

          (b) If any event, condition,  fact or circumstance that is required to
be  disclosed  pursuant  to Section  4.3(a)  requires  any change in the Company
Disclosure Schedule, or if any such event, condition, fact or circumstance would
require such a change assuming the Company Disclosure  Schedule were dated as of
the date of the  occurrence,  existence or  discovery of such event,  condition,
fact or circumstance,  then the Company shall promptly deliver to OFPI an update
to the Company Disclosure  Schedule specifying such change. No such update shall
be deemed to supplement or amend the Company Disclosure Schedule for the purpose
of (i)  determining  the accuracy of any of the  representations  and warranties
made by the Company in this Agreement,  or (ii)  determining  whether any of the
conditions set forth in Section 7 has been satisfied.                           

4.4 No Solicitation. During the Pre-Closing Period:                   

(a) Company shall not directly or indirectly, and shall not 
authorize or permit any Company Subsidiary or Representative of Company directly
or  indirectly  to, (i)  solicit,  initiate,  encourage  or induce  the  making,
submission  or  announcement  of any  Acquisition  Proposal  or take any  action
(excluding any press releases issued in connection with the  announcement of the
execution of this  Agreement)  that could  reasonably  be expected to lead to an
Acquisition  Proposal,  (ii) furnish any  information  regarding  Company or any
Company  Subsidiary  to any  Person  in  connection  with or in  response  to an
Acquisition  Proposal,  (iii) continue or engage in discussions  with any Person
with respect to any Acquisition Proposal, (iv) approve, endorse or recommend any
Acquisition  Proposal or (v) enter into any letter of intent or similar document
or any Contract  contemplating or otherwise relating to any Company  Acquisition
Transaction;  provided,  however,  that this  Section  4.4(a) shall not prohibit
Company  from  furnishing  information  regarding  the  Company  or any  Company
Subsidiary  to, or entering into  discussions  with, any Person in response to a
Superior Company Proposal if (1) the Board of Directors of Company  concludes in
good faith,  based upon the written  advice of its outside legal  counsel,  that
such action is required in order for the Board of Directors of Company to comply

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with its fiduciary  obligations to Company's  shareholders under applicable law,
(2) prior to furnishing any such  information  to, or entering into  discussions
with,  such Person,  Company  gives OFPI written  notice of the identity of such
Person  and of  Company's  intention  to furnish  information  to, or enter into
discussions with, such Person, and Company receives from such Person an executed
confidentiality  agreement  containing  customary  limitations  on the  use  and
disclosure of all written and oral information furnished to such Person by or on
behalf of Company,  (3) prior to furnishing any such information to such Person,
Company  furnishes such  information to OFPI (to the extent such information has
not been  previously  furnished  by Company to OFPI) and (4) neither the Company
nor  any   Representative  of  the  Company  shall  have  violated  any  of  the
restrictions  set forth in this Section 4.4.  Without limiting the generality of
the foregoing,  Company acknowledges and agrees that any violation of any of the
restrictions  set  forth in the  preceding  sentence  by any  Representative  of
Company  or any  Company  Subsidiary,  whether  or not  such  Representative  is
purporting  to act on behalf of  Company  or any  Company  Subsidiary,  shall be
deemed to constitute a breach of this Section 4.4 by Company.                   

          (b) The Company  shall  promptly  advise OFPI orally and in writing of
any  Acquisition  Proposal  (including  the  identity  of the  Person  making or
submitting  such  Acquisition  Proposal  and the term  thereof)  that is made or
submitted by any Person during the  Pre-Closing  Period.  The Company shall keep
OFPI fully informed with respect to the status of any such Acquisition  Proposal
and any modifications or proposed modifications thereto.                        

          (c) The Company shall immediately cease and cause to be terminated any
existing discussions with any Person that relate to any Acquisition Proposal.   

4.5 Company Shareholders' Meeting.                                    

          (a) The Company shall take all action  necessary  under all applicable
Legal  Requirements  to call, give notice of, convene and duly hold a meeting of
the holders of Company  Common Stock (the  "Company  Shareholders'  Meeting") to
consider, act upon and vote upon the adoption and approval of this Agreement and
approval  of the  Merger.  The  Company  Shareholders'  Meeting  will be held as
promptly  as  practicable  and in  any  event  within  45  days  after  the  S-4
Registration  Statement  (as  defined  below) is  declared  effective  under the
Securities Act (which 45-day period shall be extended on a day-for-day  basis if
and for so long as any stop order or other similar  action is in place,  pending
or threatened by the SEC).  The  Company's  obligation to call,  give notice of,
convene  and hold the  Company  Shareholders'  Meeting in  accordance  with this
Section 4.5(a) shall not be limited or otherwise  affected by the  commencement,
disclosure,  announcement  or submission of any Superior  Company Offer or other
Company Acquisition Transaction, or by any withdrawal, amendment or modification
of the  recommendation  of the Board of Directors of the Company with respect to
the Merger.                                                                     

          (b)  Subject  to Section  4.5(c):  (i) the Board of  Directors  of the
Company shall  unanimously  recommend  that the Company's  shareholders  vote in
favor of and adopt and  approve  this  Agreement  and  approve the Merger at the
Company  Shareholders'  Meeting;  (ii) the Joint Proxy Statement shall include a
statement  to the  effect  that  the  Board  of  Directors  of the  Company  has
unanimously  recommended  that the Company's  shareholders  vote in favor of and
adopt  and  approve  this  Agreement  and  approve  the  Merger  at the  Company
Shareholders'  Meeting;  and (iii) neither the Board of Directors of the Company

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nor any committee thereof shall withdraw, amend or modify, or propose or resolve
to  withdraw,  amend or  modify,  in a manner  adverse  to OFPI,  the  unanimous
recommendation  of the Board of  Directors  of the  Company  that the  Company's
shareholders  vote in favor of the adoption and approval this  Agreement and the
approval of the Merger. For purposes of this Agreement,  said  recommendation of
the Board of Directors shall be deemed to have been modified in a manner adverse
to OFPI if said recommendation shall no longer be unanimous.                    

          (c) Nothing in Section  4.5(b) shall prevent the Board of Directors of
the Company from withdrawing, amending or modifying its unanimous recommendation
in favor of the Merger if (i) a Superior Company Proposal is made to the Company
and is not  withdrawn,  (ii) neither the Company nor any of its  Representatives
shall have violated any of the  restrictions set forth in Section 4.4, and (iii)
the Board of  Directors of the Company  concludes in good faith,  based upon the
written  advice  of its  outside  counsel,  that the  withdrawal,  amendment  or
modification  of such  recommendation  is  required  in order  for the  Board of
Directors  of the  Company  to  comply  with its  fiduciary  obligations  to the
Company's  shareholders  under applicable law. Nothing contained in this Section
4.5 shall limit the Company's  obligation to call,  give notice of,  convene and
hold the Company  Shareholders'  Meeting  (regardless  of whether the  unanimous
recommendation  of the  Board  of  Directors  of the  Company  shall  have  been
withdrawn, amended or modified).                                                

     4.6 Tax Representation  Letters. As soon as practicable after the execution
of this  Agreement,  the Company shall  deliver to Cooley  Godward LLP and Carr,
McClellan,   Ingersoll,   Thompson  &  Horn,  P.C.  ("Carr,   McClellan"),   tax
representation  letters  substantially  in the form of the  attached  Exhibit  F
(which will be used and relied upon by such firms in  connection  with the legal
opinions contemplated by Section 7.8 and Section 8.9).                          

SECTION 5. CERTAIN COVENANTS OF OFPI.                                           

     5.1 Access and Investigation.  During the Pre-Closing  Period,  OFPI shall,
and shall  cause  its  Representatives  to:  (a)  provide  the  Company  and the
Company's  Representatives  with  reasonable  access to OFPI's  Representatives,
personnel  and assets and to all existing  books,  records,  Tax  Returns,  work
papers  and  other  documents  and  information  relating  to OFPI and each OFPI
Subsidiary;  and (b) provide the Company and the Company's  Representatives with
such copies of the existing books,  records, Tax Returns,  work papers and other
documents and information  relating to OFPI and each OFPI  Subsidiary,  and with
such additional  financial,  operating and other data and information  regarding
OFPI and each OFPI Subsidiary, as the Company may reasonably request.           

     5.2  Operation  of OFPI's  Business.  Except as agreed to in writing by the
Company,  during the Pre-Closing  Period,  OFPI shall, and shall cause each OFPI
Subsidiary to:                                                                  

          (a) conduct its business and operations in the ordinary  course and in
substantially  the  same  manner  as such  business  and  operations  have  been
conducted prior to the date of this Agreement;                                  

          (b) use  reasonable  efforts to preserve  intact its current  business
organization,  keep available the services of its current officers and employees
and  maintain  its  relations  and  goodwill  with  all  suppliers,   customers,

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landlords,  creditors, employees and other Persons having business relationships
with OFPI or any OFPI Subsidiary;                                               

          (c) keep in full force all insurance  policies in place as of the date
of this Agreement;                                                              

          (d) cause its officers to report  regularly to the Company  concerning
the status of OFPI's and the OFPI Subsidiaries' businesses, taken as a whole;   

          (e) not  declare,  accrue,  set aside or pay any  dividend or make any
other  distribution  in respect of any  shares of capital  stock,  and shall not
repurchase,  redeem or otherwise  reacquire any shares of capital stock or other
securities;                                                                     

          (f) not,  without the written consent of the Company,  sell,  issue or
authorize  the  issuance of (i) any capital  stock or other  security,  (ii) any
option,  call, warrant or right to acquire, or relating to, any capital stock or
other security, or (iii) any instrument convertible into or exchangeable for any
capital  stock or other  security  (except  that OFPI shall be  permitted to (A)
issue OFPI Common Stock upon the exercise of OFPI Options  outstanding as of the
date hereof, and (B) issu shares of OFPI Common Stock in the OI Acquisition);   

          (g) not amend or waive any of its rights under, or (except pursuant to
the express terms of OFPI Options  outstanding  on the date hereof and listed on
Part  3.3  of  the  OFPI   Disclosure   Schedule  which  provide  for  automatic
acceleration upon consummation of the Merger) permit the acceleration of vesting
under,  (i) any  provision  of its OFPI Stock Plans,  (ii) any  provision of any
agreement  evidencing any outstanding OFPI Option or OFPI Warrant,  or (iii) any
provision of any restricted stock purchase agreement;                           

          (h) not amend or permit the adoption of any  amendment to its articles
of incorporation  or bylaws,  or effect or permit OFPI or any OFPI Subsidiary to
become   a   party   to   any   Acquisition    Transaction,    recapitalization,
reclassification  of  shares,  stock  split,  reverse  stock  split  or  similar
transaction  (except for the OI Acquisition and for any reverse stock split that
the OFPI Board of Directors  shall deem  appropriate to maintain  listing on the
NASDAQ Small Cap Market);                                                       

          (i) not form any  subsidiary  or acquire any equity  interest or other
interest in any other Entity;                                                   

          (j) not make any capital expenditure,  except for capital expenditures
that,  when  added to all other  capital  expenditures  made by OFPI or any OFPI
Subsidiary  during  the  Pre-Closing  Period,  do  not  exceed  $50,000  in  the
aggregate;                                                                      

          (k) not (i) enter into or become bound by, or permit any of the assets
owned or used by it to become bound by, any Material OFPI Contract except in the
ordinary course of business,  or (ii) amend or prematurely  terminate,  or waive
any material right or remedy under, any Material OFPI Contract;                 

          (l) not (i)  acquire,  lease or license  any  material  right or other
material  asset from any other  Person,  (ii) sell or  otherwise  dispose of, or

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lease or  license,  any  material  right or other  material  asset to any  other
Person,  or (iii) waive or  relinquish  any  material  right,  other than in the
ordinary course of business and except for immaterial  assets acquired,  leased,
licensed or disposed of by OFPI pursuant to Contracts that are not Material OFPI
Contracts;                                                                      

          (m) not (i) lend money to any Person,  or (ii) incur or guarantee  any
indebtedness,  except for  routine  advances of  expenses  to  employees  in the
ordinary  course of business and except that OFPI and each OFPI  Subsidiary  may
make routine  borrowings in the ordinary  course of business  under its existing
bank lines of credit disclosed in the OFPI SEC Documents;                       

          (n) not (i) pay any  bonus  or  make  any  profit-sharing  or  similar
payment to, or increase  the amount of the wages,  salary,  commissions,  fringe
benefits or other compensation or remuneration payable to, any of its directors,
officers or employees  other than in the ordinary  course of business and solely
with respect to non-officers  and  non-directors,  or (ii)  establish,  adopt or
amend any Employee Benefit Plan;                                                

          (o)  not  change  any of  its  methods  of  accounting  or  accounting
practices in any respect;                                                       

(p) not make any Tax election;                              

(q) not commence or settle any Legal Proceeding;            

          (r) not enter into any material transaction or take any other material
action  outside the ordinary  course of business or  inconsistent  with its past
practices; and                                                                  

          (s) not  agree or  commit  to take  any of the  actions  described  in
clauses "(e)" through "(r)" of this Section 5.2.                                

5.3 Notification; Updates to OFPI Disclosure Schedule.                

          (a) During the  Pre-Closing  Period,  OFPI shall  promptly  notify the
Company in writing of:                                                          

               (i)  the  discovery  by  OFPI of any  event,  condition,  fact or
circumstance  that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes an inaccuracy in or breach of any  representation
or warranty  made by OFPI in this  Agreement  or an  inaccuracy  in the OFPI SEC
Documents;                                                                      

               (ii) any event,  condition,  fact or  circumstance  that  occurs,
arises  or exists  after  the date of this  Agreement  and that  would  cause or
constitute an inaccuracy in or breach of any  representation or warranty made by
OFPI in this  Agreement or  inaccuracy  in the OFPI SEC  Documents;  if (A) such
representation  or  warranty  had been  made as of the  time of the  occurrence,
existence or discovery of such event,  condition,  fact or circumstance,  or (B)
such event, condition,  fact or circumstance had occurred,  arisen or existed on
or prior to the date of this Agreement;                                         

               (iii) any breach of any covenant or obligation of OFPI hereunder;
and                                                                             

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               (iv) any event,  condition,  fact or circumstance that would make
the  timely  satisfaction  of any of the  conditions  set forth in  Section 7 or
Section 8 impossible or unlikely.                                               

          (b) If any event, condition,  fact or circumstance that is required to
be  disclosed  pursuant  to  Section  5.3(a)  requires  any  change  in the OFPI
Disclosure Schedule, or if any such event, condition, fact or circumstance would
require such a change assuming the OFPI Disclosure Schedule were dated as of the
date of the occurrence, existence or discovery of such event, condition, fact or
circumstance,  then OFPI shall promptly  deliver to the Company an update to the
OFPI Disclosure  Schedule specifying such change. No such update shall be deemed
to  supplement  or amend the OFPI  Disclosure  Schedule  for the  purpose of (i)
determining  the accuracy of any of the  representations  and warranties made by
OFPI in this Agreement,  or (ii)  determining  whether any of the conditions set
forth in Section 8 has been satisfied.                                          

5.4 No Solicitation. During the Pre-Closing Period:                   

          (a) OFPI shall not directly or indirectly,  and shall not authorize or
permit any OFPI Subsidiary or any  Representative of OFPI directly or indirectly
to, (i)  solicit,  initiate,  encourage  or induce  the  making,  submission  or
announcement of any Acquisition Proposal or take any action (excluding any press
releases  issued in connection with the execution of this Agreement or action in
compliance with OFPI's required  disclosure  obligations under the Exchange Act)
that could  reasonably  be expected  to lead to an  Acquisition  Proposal,  (ii)
furnish any  information  regarding OFPI or any OFPI Subsidiary to any Person in
connection  with or in response to an  Acquisition  Proposal,  (iii) continue or
engage in discussions with any Person with respect to any Acquisition  Proposal,
(iv) approve,  endorse or recommend any  Acquisition  Proposal or (v) enter into
any  letter of intent or  similar  document  or any  Contract  contemplating  or
otherwise relating to any OFPI Acquisition Transaction;  provided, howeve , that
this  Section  5.4(a)  shall  not  prohibit  OFPI  from  furnishing  information
regarding OFPI or any OFPI Subsidiary to, or entering into discussions with, any
Person in response to a Superior  OFPI Proposal if (1) the Board of Directors of
OFPI concludes in good faith, based upon the written advice of its outside legal
counsel,  that such action is required  in order for the Board of  Directors  of
OFPI to comply  with its  fiduciary  obligations  to OFPI's  shareholders  under
applicable  law, (2) prior to furnishing  any such  information  to, or entering
into discussions with, such Person, OFPI gives the Company written notice of the
identity of such Person and of OFPI's  intention to furnish  information  to, or
enter into discussions with, such Person,  and OFPI receives from such Person an
executed  confidentiality  agreement containing customary limitations on the use
and disclosure of all written and oral  information  furnished to such Person by
or on  behalf of OFPI,  (3) prior to  furnishing  any such  information  to such
Person,  OFPI  furnishes  such  information  to the  Company (to the extent such
information  has not been  previously  furnished by OFPI to the Company) and (4)
neither  OFPI nor any  Representative  of OFPI  shall have  violated  any of the
restrictions  set forth in this Section 5.4.  Without limiting the generality of
the  foregoing,  OFPI  acknowledges  and agrees that any violation of any of the
restrictions set forth in the preceding  sentence by any Representative of OFPI,
whether or not such Representative is purporting to act on behalf of OFPI, shall
be deemed to constitute a breach of this Section 5.4 by OFPI.                   

          (b) OFPI shall  promptly  advise the Company  orally and in writing of
any  Acquisition  Proposal  (including  the  identity  of the  Person  making or

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submitting  such  Acquisition  Proposal  and the term  thereof)  that is made or
submitted  by any Person  during  the  Pre-Closing  Period.  OFPI shall keep the
Company  fully  informed  with  respect  to the  status of any such  Acquisition
Proposal and any modifications or proposed modifications thereto.               

          (c) OFPI  shall  immediately  cease  and  cause to be  terminated  any
existing discussions with any Person that relate to any Acquisition Proposal.   

5.5 OFPI Shareholders' Meeting.                                       

          (a) OFPI shall take all action  necessary  under all applicable  Legal
Requirements  to call,  give  notice of,  convene and duly hold a meeting of the
holders of OFPI Common Stock (the "OFPI Shareholders' Meeting") to consider, act
upon and vote upon the  approval  of the  issuance  of the  Merger  Shares,  the
adoption and approval of this Agreement,  the Merger and the Restated  Articles.
The OFPI  Shareholders'  Meeting will be held as promptly as practicable  and in
any  event  within 45 days  after the S-4  Registration  Statement  is  declared
effective  under the  Securities Act (which 45-day period shall be extended on a
day-for-day  basis if and for so long as any stop order or other similar  action
is in place,  pending or threatened by the SEC). OFPI's obligation to call, give
notice of, convene and hold the OFPI  Shareholders'  Meeting in accordance  with
this  Section  5.5(a)  shall  not  be  limited  or  otherwise  affected  by  the
commencement,  disclosure, announcement or submission of any Superior OFPI Offer
or other  OFPI  Acquisition  Transaction,  or by any  withdrawal,  amendment  or
modification  of the  recommendation  of the  Board of  Directors  of OFPI  with
respect to the Merger.                                                          

          (b)  Subject to Section  5.5(c):  (i) the Board of  Directors  of OFPI
shall  unanimously  recommend  that  OFPI's  Shareholders  vote in  favor of and
approve the issuance of the Merger Shares and adopt and approve this  Agreement,
the Merger and the  Restated  Articles;  (ii) the Joint  Proxy  Statement  shall
include  a  statement  to the  effect  that the Board of  Directors  of OFPI has
unanimously made such  recommendation;  and (iii) neither the Board of Directors
of OFPI nor any committee thereof shall withdraw, amend or modify, or propose or
resolve to withdraw,  amend or modify, in a manner adverse to the Company,  such
unanimous recommendation. For purposes of this Agreement, said recommendation of
the Board of Directors shall be deemed to have been modified in a manner adverse
to the Company if said recommendation shall no longer be unanimous.             

          (c) Nothing in Section  5.5(b) shall prevent the Board of Directors of
OFPI from  withdrawing,  amending or modifying its unanimous  recommendation  in
favor of the Merger if (i) a Superior  OFPI  Proposal is made to OFPI and is not
withdrawn,  (ii) neither OFPI nor any of its Representatives shall have violated
any of the  restrictions  set  forth in  Section  5.4,  and  (iii)  the Board of
Directors of OFPI concludes in good faith,  based upon the written advice of its
outside  counsel,  that  the  withdrawal,  amendment  or  modification  of  such
recommendation is required in order for the Board of Directors of OFPI to comply
with its fiduciary  obligations to OFPI's  Shareholders  under  applicable  law.
Nothing  contained in this Section 5.5 shall limit  OFPI's  obligation  to call,
give notice of, convene and hold the OFPI Shareholders'  Meeting  (regardless of
whether the  unanimous  recommendation  of the Board of  Directors of OFPI shall
have been withdrawn, amended or modified).                                      

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     5.6 Tax Representation  Letters. As soon as practicable after the execution
of this Agreement, OFPI shall deliver to Cooley Godward LLP and Carr, McClellan,
tax representation  letters in the form of the attached Exhibit G (which will be
used and relied  upon in  connection  with the legal  opinions  contemplated  by
Section 7.8 and Section 8.9).                                                   

SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES.                                 

     6.1 Filings and Consents. As promptly as practicable after the execution of
this Agreement, each party to this Agreement (a) shall make all filings (if any)
and give all  notices  (if any)  required  to be made and given by such party in
connection  with the  Merger  and the other  transactions  contemplated  by this
Agreement,  and (b)  shall use his or its  reasonable  efforts  to  obtain  each
Consent (if any)  required  to be obtained  (pursuant  to any  applicable  Legal
Requirement  or Contract,  or otherwise)  by such party in  connection  with the
Merger or any of the other  transactions  contemplated by this  Agreement.  Each
party shall promptly deliver to the other party a copy of each such filing made,
each such notice given and each such Consent obtained by such parties during the
Pre-Closing Period.                                                             

     6.2 Public Announcements.  The parties shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to the Merger and the transactions  contemplated  thereby.  Without limiting the
generality of the foregoing, neither party shall (and neither party shall permit
any of its  Representatives  to)  issue  any press  release  or make any  public
statement  regarding this Agreement or the Merger, or regarding any of the other
transactions  contemplated  by this  Agreement,  without the other party's prior
consent, except that either party shall be permitted, without the consent of the
other  party,  to  make  such  disclosures  as are  required  to be  made  under
applicable law.                                                                 

     6.3 Reasonable  Efforts.  During the  Pre-Closing  Period,  (a) the Company
shall use its reasonable  efforts to cause the conditions set forth in Section 7
to be satisfied on a timely basis, and (b) OFPI shall use its reasonable efforts
to cause the  conditions  set forth in  Section  8 to be  satisfied  on a timely
basis.                                                                          

6.4 Registration Statement.                                           

          (a) As promptly as practicable after the date of this Agreement,  OFPI
shall  prepare  and cause to be filed  with the SEC a  preliminary  Joint  Proxy
Statement to be sent to the  Shareholders  of OFPI and the  shareholders  of the
Company  in  connection  with the OFPI  Shareholders'  Meeting  and the  Company
Shareholders'  Meeting,  respectively.  OFPI  and  the  Company  shall  use  all
reasonable  efforts to cause the Joint Proxy  Statement to comply with the rules
and regulations  promulgated by the SEC, to respond  promptly to any comments of
the SEC or its staff and to have the Joint  Proxy  Statement  cleared by the SEC
for  distribution to the OFPI  Shareholders and the Company  shareholders.  OFPI
shall  prepare and cause to be filed with the SEC a  registration  statement  on
Form S-4 concerning the OFPI Common Stock to be issued upon the Merger (the "S-4
Registration  Statement")  after the Company's  financial  statements for the 12
months ended  December 31, 1998 have been audited by the  Company's  independent
auditors and such auditors' report is available.  The S-4 Registration Statement
shall contain or incorporate by reference the Joint Proxy Statement (which shall
include such Company  December 31, 1997  financial  statements) as a prospectus,

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and any other  documents  required by the  Securities Act or the Exchange Act in
connection with the Merger. The parties acknowledge and agree that the foregoing
arrangements  may be altered  by mutual  consent  of the  parties as  reasonably
necessary to respond to any  comments or requests  received  from the SEC.  OFPI
shall  use all  reasonable  efforts  to  cause  the S-4  Registration  Statement
(including the Joint Proxy  Statement) to comply with the rules and  regulations
promulgated  by the SEC, to respond  promptly to any  comments of the SEC or its
staff and to have the S-4 Registration  Statement  declared  effective under the
Securities Act as promptly as  practicable  after it is filed with the SEC. OFPI
will use all reasonable  efforts to cause the Joint Proxy Statement to be mailed
to OFPI's Shareholders, and the Company will use all reasonable efforts to cause
the  Joint  Proxy  Statement  to be  mailed to the  Company's  shareholders,  as
promptly  as  practicable  after  the S-4  Registration  Statement  is  declared
effective under the Securities  Act. The Company shall promptly  furnish to OFPI
all information  concerning the Company and the Company's  shareholders that may
be required or reasonably  requested in connection with any action  contemplated
by this  Section 6.4  (including,  without  limitation,  the  Company  Financial
Statements).  In  addition,  the  Company  shall  promptly  furnish  to OFPI all
information  concerning  the Company and the  Company  shareholders  that may be
required or reasonably  requested in connection with any pre- or  post-effective
amendment to the S-4 Registration Statement. If the Company becomes aware of any
information  that should be set forth in an amendment or  supplement  to the S-4
Registration  Statement  or the Joint Proxy  Statement,  then the Company  shall
promptly  inform  OFPI  thereof  and shall  cooperate  with OFPI in filing  such
amendment  or  supplement  with the SEC and,  if  appropriate,  in mailing  such
amendment or supplement to the shareholders of the Company.                     

          (b) Prior to the Effective Time, OFPI shall make all required  filings
with state  regulatory  authorities and the NASD, and shall ensure that the OFPI
Common Stock to be issued in the Merger will be qualified  under the  securities
or "blue  sky" law of every  jurisdiction  of the  United  States  in which  any
registered  stockholder  of the  Company  has an address of record on the record
date for determining the  Shareholders  entitled to notice of and to vote on the
Merger  (other than  qualifying to do business in a state in which it is not now
qualified).                                                                     

6.5 Additional Agreements.                                            

          (a)  Subject to Section  6.5(b),  OFPI and the  Company  shall use all
reasonable  efforts to take,  or cause to be taken,  all  actions  necessary  to
consummate the Merger and make effective the other transactions  contemplated by
this Agreement. Without limiting the generality of the foregoing, but subject to
Section 6.5(b), each party to this Agreement shall use all reasonable efforts to
lift any  restraint,  injunction  or other legal bar to the  Merger.  Each party
shall promptly deliver to the other, to the extent material, a copy of each such
filing made, each such notice given and each such Consent obtained by such party
during the Pre-Closing Period.                                                  

          (b)  Notwithstanding  anything  to  the  contrary  contained  in  this
Agreement,  neither OFPI nor the Company  shall have any  obligation  under this
Agreement  to do any of the  following  (or  cause  the  other  to do any of the
following):  (i) to dispose or cause any of its  subsidiaries  to dispose of any
assets;  (ii) to  discontinue  or cause any of its  subsidiaries  to discontinue
offering any product; (iii) to license or otherwise make available, or cause any
of its subsidiaries to license or otherwise make available,  to any Person,  any
technology,  software or other Proprietary Asset; (iv) to hold separate or cause

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any of its subsidiaries to hold separate any assets or operations (either before
or after the Closing Date);  or (v) to make or cause any of its  subsidiaries to
make any commitment (to any Governmental Body or otherwise) regarding its future
operations.                                                                     

     6.6  Regulatory  Approvals.  The Company and OFPI shall use all  reasonable
efforts to file, as soon as practicable  after the date of this  Agreement,  all
notices,  reports and other documents required to be filed with any Governmental
Body with respect to the Merger and the other transactions  contemplated by this
Agreement,  and to submit promptly any additional  information  requested by any
such Governmental  Body.  Without limiting the generality of the foregoing,  the
Company and OFPI shall,  promptly after the date of this Agreement,  prepare and
file the notifications,  if any, required under the Hart-Scott-Rodino  Antitrust
Improvements  Act of 1976, as amended (the "HSR Act"),  in  connection  with the
Merger. The Company and OFPI shall respond as promptly as practicable to (i) any
inquiries  or  requests  received  from  the  Federal  Trade  Commission  or the
Department of Justice for additional  information or documentation  and (ii) any
inquiries  or  requests  received  from  any  state  attorney  general  or other
Governmental  Body in connection with antitrust or related matters.  Each of the
Company  and  OFPI  shall  (1)  give  the  other  party  prompt  notice  of  the
commencement  of any Legal  Proceeding by or before any  Governmental  Body with
respect  to the  Merger or any of the other  transactions  contemplated  by this
Agreement,  (2) keep the  other  party  informed  as to the  status of any Legal
Proceeding,  and (3) promptly inform the other party of any  communication to or
from the  Federal  Trade  Commission,  the  Department  of  Justice or any other
Governmental  Body  regarding the Merger.  The Company and OFPI will consult and
cooperate  with one  another,  and will  consider in good faith the views of one
another, in connection with any analysis, appearance, presentation,  memorandum,
brief,  argument,  opinion or proposal made or submitted in connection  with any
Legal  Proceeding under or relating to the HSR Act of any other federal or state
antitrust or fair trade law. In addition, except as may be prohibited by the HSR
Act of any Governmental Body or by any Legal Requirement, in connection with any
Legal  Proceeding  under or relating to any other federal or state  antitrust or
fair trade law or any other  similar Legal  Proceeding,  each of the Company and
OFPI  agrees  to permit  authorized  Representatives  of the  other  party to be
present at each meeting or conference  relating to any such Legal Proceeding and
to have access to and be consulted in connection  with any document,  opinion or
proposal made or submitted to any Governmental  Body in connection with any such
Legal Proceeding.                                                               

6.7 Indemnification.                                                  

          (a) From and after the  consummation of the Merger,  OFPI will fulfill
and honor in all material  respects the  obligations of the OFPI and the Company
pursuant to (i) each  indemnification  agreement  in effect at such time between
the OFPI and each  person  who is or was a  director  or officer of OFPI and the
Company  at or  prior  to  the  Effective  Time  and  (ii)  any  indemnification
provisions under OFPI's and the Company's  respective  Articles of Incorporation
or  Bylaws,  as  each  is in  effect  on the  date  hereof  (the  persons  to be
indemnified pursuant to this agreement and provisions referred to in clauses (i)
and (ii) of this Section 6.7 shall be referred to individually, the "Indemnified
Party"). The respective Articles of Incorporation and the Bylaws of the OFPI and
the  Company  shall  continue  to  contain  the   provisions   with  respect  to
indemnification and exculpation from liability set forth in such documents as of
the date of this Agreement and such provisions shall not be amended, repealed or

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otherwise  modified  for a period of six years after the  Effective  Time in any
manner that would  adversely  affect the rights  thereunder  of any  Indemnified
Party.                                                                          

          (b) This Section 6.7 shall survive the  consummation  of the Merger at
the  Effective  Time,  is  intended  to be for the  benefit  of the OFPI and the
Company  and each  Indemnified  Party  and such  Indemnified  Party's  heirs and
representatives,  and shall be binding on all successors and assigns of OFPI and
the Surviving Corporation.                                                      

SECTION 7. CONDITIONS PRECEDENT TO OBLIGATIONS OF OFPI.                         

     The  obligations of OFPI to effect the Merger and otherwise  consummate the
transactions contemplated by this Agreement are subject to the satisfaction,  at
or prior to the Closing, of each of the following conditions:                   

     7.1 Accuracy of Representations. Each of the representations and warranties
made by the Company in this  Agreement  shall have been accurate in all respects
as of the date of this  Agreement,  and shall be accurate in all  respects as of
the Closing  Date as if made at the Closing Date  without  giving  effect to any
update of the Company Disclosure Schedule.                                      

     7.2  Performance  of  Covenants.   Each  material  covenant  or  obligation
contained  in this  Agreement  that the Company is required to comply with or to
perform at or prior to the Closing  shall have been  complied with and performed
in all material respects.                                                       

     7.3 Effectiveness of Registration Statement. The S-4 Registration Statement
shall have become  effective in accordance with the provisions of the Securities
Act, and no stop order shall have been issued by the SEC with respect to the S-4
Registration Statement.                                                         

     7.4  Compliance  Certificate.  The Company  shall have  delivered to OFPI a
certificate  (the  "Company  Compliance  Certificate")  of the  Chief  Executive
Officer of the Company  evidencing  compliance  with the conditions set forth in
Sections 7.1 and 7.2.                                                           

     7.5  Shareholder  Approval.   The  issuance  of  the  Merger  Shares,  this
Agreement,  the Merger and the  Restated  Articles  shall have been  adopted and
approved by the Requisite OFPI Vote and this Agreement and the Merger shall have
been adopted and approved by the Requisite Company Vote.                        

     7.6 Consents.  All Consents  listed in Part 2.21 of the Company  Disclosure
Schedule and Part 3.21 of the OFPI Disclosure  Schedule shall have been obtained
and shall be in full force and effect.                                          

     7.7 Legal  Opinion.  OFPI  shall have  received  a legal  opinion of Cooley
Godward LLP, in  substantially  the form of the attached  Exhibit H, dated as of
the Closing Date;                                                               

     7.8 Tax  Opinion.  Company  shall have  received a legal  opinion of Cooley
Godward LLP in substantially the form of the attached Exhibit I, dated as of the
Closing  Date,  to the effect that the Merger will  constitute a  reorganization
within the meaning of Section 368(a) of the Code (it being  understood  that, in
rendering such opinion,  Cooley Godward LLP may rely upon the tax representation
letters and Continuity of Interest Certificates referred to in Section 4.6).    

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     7.9 No Restraints. No temporary restraining order, preliminary or permanent
injunction or other order  preventing the  consummation of the Merger shall have
been issued by any court of  competent  jurisdiction  and remain in effect,  and
there shall not be any Legal  Requirement  enacted or deemed  applicable  to the
Merger that makes consummation of the Merger illegal.                           

     7.10  HSR  Act.  If  applicable,  the  waiting  period  applicable  to  the
consummation  of the  Merger  under  the  HSR Act  shall  have  expired  or been
terminated.                                                                     

     7.11 Acquisition of Spectrum Commodities, Inc. Spectrum Commodities,  Inc.,
a California  corporation ("SCI"), shall have merged with or into the Company or
a Company Subsidiary.                                                           

     7.12  Satisfactory   Completion  of  Pre-Merger  Review.  OFPI  shall  have
satisfactorily   completed  its  pre-Merger  investigation  and  review  of  the
Company's business,  condition,  assets,  liabilities,  operations,  facilities,
financial performance,  net income and prospects and shall be satisfied with the
results of that investigation and review.                                       

SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY.                  

     The  obligations  of  the  Company  to  effect  the  Merger  and  otherwise
consummate the  transactions  contemplated  by this Agreement are subject to the
satisfaction, at or prior to the Closing, of each of the following conditions:  

     8.1 Satisfactory  Completion of Pre-Merger  Review.  The Company shall have
satisfactorily  completed  its  pre-Merger  investigation  and  review of OFPI's
business,  condition,  assets, liabilities,  operations,  facilities,  financial
performance, net income and prospects and shall be satisfied with the results of
that investigation and review.                                                  

     8.2 Accuracy of Representations. Each of the representations and warranties
made by OFPI in this  Agreement  shall have been  accurate in all respects as of
the date of this  Agreement,  and shall be  accurate  in all  respects as of the
Closing Date as if made at the Closing Date without  giving effect to any update
of  the  OFPI  Disclosure  Schedule;  provided  that  such  representations  and
warranties shall give effect to OFPI's acquisition of, or merger with OI.       

     8.3  Performance  of  Covenants.   Each  material  covenant  or  obligation
contained in this  Agreement  that OFPI is required to comply with or to perform
at or prior to the Closing  shall have been  complied  with and performed in all
material respects.                                                              

     8.4 Effectiveness of Registration Statement. The S-4 Registration Statement
shall have become  effective in accordance with the provisions of the Securities
Act, and no stop order shall have been issued by the SEC with respect to the S-4
Registration Statement.                                                         

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     8.5  Compliance  Certificate.  OFPI shall have  delivered  to the Company a
certificate (the "OFPI Compliance  Certificate") of the Chief Executive  Officer
of the OFPI evidencing  compliance with the conditions set forth in Sections 8.2
and 8.3.                                                                        

     8.6  Shareholder  Approval.  The  issuance  of the  Merger  Shares and this
Agreement,  the Merger and the  Restated  Articles  shall have been  adopted and
approved by the Requisite OFPI Vote and this Agreement and the Merger shall have
been adopted and approved by the Requisite Company Vote.                        

     8.7 Consents.  All Consents  listed in Part 2.21 of the Company  Disclosure
Schedule and Part 3.21 of the OFPI Disclosure Schedule) shall have been obtained
and shall be in full force and effect.                                          

     8.8 Legal Opinion. The Company shall have received a legal opinion of Carr,
McClellan,  dated  as of the  Closing  Date,  in  substantially  the form of the
attached Exhibit J;                                                             

     8.9 Tax  Opinion.  OFPI  shall  have  received  a legal  opinion  of  Carr,
McClellan in  substantially  the form of the attached Exhibit K, dated as of the
Closing  Date,  to the effect that the Merger will  constitute a  reorganization
within the meaning of Section 368(a) of the Code (it being  understood  that, in
rendering  such opinion,  Carr,  McClellan may rely upon the tax  representation
letters and Continuity of Interest Certificates referred to in Section 4.6);    

     8.10  No  Restraints.   No  temporary  restraining  order,  preliminary  or
permanent  injunction or other order  preventing the  consummation of the Merger
shall  have been  issued by any court of  competent  jurisdiction  and remain in
effect,  and  there  shall  not be  any  Legal  Requirement  enacted  or  deemed
applicable to the Merger that makes consummation of the Merger illegal.         

     8.11  HSR  Act.  If  applicable,  the  waiting  period  applicable  to  the
consummation  of the  Merger  under  the  HSR Act  shall  have  expired  or been
terminated.                                                                     

     8.12 Resignations of Certain Directors. The Company shall have received the
written  resignations of the directors of OFPI listed on the attached  Exhibit L
hereto, effective as of the Effective Time.                                     

     8.13  Acquisition of Organic  Ingredients,  Inc. OFPI or a OFPI  Subsidiary
shall  have  closed  the  acquisition  (the  "OI  Acquisition")  of  100% of the
outstanding capital stock of Organic Ingredients, Inc., a California corporation
("OI"),  in exchange for shares of OFPI Common  Stock;  provided that OFPI shall
have  delivered  to the Company no later than ten (10) days prior to the Closing
Date a copy of the final OI  Acquisition  merger  agreement,  together  with all
applicable schedules and exhibits.                                              

     8.14  Shareholder  Lock-up  Agreements.  Each of the persons  listed on the
attached  Exhibit M shall have entered into an agreement  with OFPI  prohibiting
such persons from transferring any OFPI Common Stock  beneficially owned by such
persons for a period of one (1) year from the Closing Date.                     

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     8.15  Employment  Agreements.  OFPI  shall  have  entered  into  employment
agreements mutually satisfactory to OFPI and the Company, which agreements shall
include standard covenants not to compete,  with each of Jethren Phillips,  John
Battendieri, Joseph Stern, Richard Bacigalupi and Neil Blomquist.               

     8.16  Refinancing  of Existing  Debt.  The Company,  OFPI and OI shall have
refinanced their existing credit and loan arrangements in a manner  satisfactory
to the Company, to be determined in the Company's sole discretion.              

     8.17  Dissenters'  Rights.  No  greater  than  five  percent  (5%)  of OFPI
Shareholders shall be eligible for dissenters' rights as of the Closing Date.   

SECTION 9. TERMINATION AND INDEMNIFICATION.                                     

     9.1  Termination.  This Agreement may be terminated  prior to the Effective
Time (whether  before or after  approval of the Merger by the Requisite  Company
Vote and/or the Requisite OFPI Vote):                                           

(a) by mutual written consent of OFPI and the Company;      

          (b) by either  OFPI or the  Company if the Merger  shall not have been
consummated  by August 31, 1999 (unless the failure to consummate  the Merger is
attributable  to a failure on the part of the party  seeking to  terminate  this
Agreement  to perform any material  obligation  required to be performed by such
party at or prior to the Effective Time);                                       

          (c) by either OFPI or the Company if a court of competent jurisdiction
or other  Governmental Body shall have issued a final and  nonappealable  order,
decree or ruling,  or shall have  taken any other  action,  having the effect of
permanently restraining, enjoining or otherwise prohibiting the Merger;         

          (d) by  either  OFPI  or the  Company  if (i) the  OFPI  Shareholders'
Meeting (including any adjournments  thereof) shall have been held and completed
and OFPI's  Shareholders  shall have taken a final vote on a proposal to approve
the issuance of the Merger Shares and to approve and adopt this  Agreement,  the
Merger and the  Restated  Articles and (ii) this  Agreement,  the Merger and the
Restated  Articles  shall not have been  adopted and approved at such meeting by
the Requisite OFPI Vote; provided,  however, that OFPI shall not be permitted to
terminate  this  Agreement  pursuant  to this  Section  9.1(d) if the failure of
OFPI's  Shareholders  to approve the issuance of the Merger  Shares and to adopt
and approve this  Agreement,  the Merger and the  Restated  Articles at the OFPI
Shareholders'  Meeting  is  attributable  to a  failure  on the  part of OFPI to
perform any material  obligation  required to have been  performed by OFPI under
this  Agreement;  and  provided,  further,  that OFPI shall not be  permitted to
terminate this Agreement  pursuant to this Section 9.1(d) unless OFPI shall have
paid the fee referred to in Section 9.3(b);                                     

          (e) by either  OFPI or the  Company if (i) the  Company  Shareholders'
Meeting (including any adjournments  thereof) shall have been held and completed
and the  Company's  shareholders  shall have taken a final vote on a proposal to
approve and adopt this  Agreement and the Merger and (ii) this Agreement and the

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Merger shall not have been adopted and approved at such meeting by the Requisite
Company  Vote;  provided,  however,  that  Company  shall  not be  permitted  to
terminate this  Agreement  pursuant to this Section 9.1(e) if the failure of the
Company's shareholders to adopt and approve this Agreement and the Merger at the
Company  Shareholders'  Meeting is  attributable to a failure on the part of the
Company to perform any material  obligation  required to have been  performed by
the Company under this Agreement; and provided,  further, that the Company shall
not be permitted to terminate  this  Agreement  pursuant to this Section  9.1(e)
unless the Company shall have paid the fee referred to in Section 9.3(b);       

          (f) at any time prior to the adoption  and approval of this  Agreement
and the Merger by the Requisite OFPI Vote and the Requisite Company Vote, by the
Company if a OFPI  Triggering  Event shall have occurred or by OFPI if a Company
Triggering Event shall have occurred; or                                        

          (g) by either party if any of the other party's covenants contained in
this  Agreement  shall have been  breached in any  material  respect;  provided,
however,  that if a breach of a covenant by a party is curable by such party and
such party is continuing to exercise all reasonable efforts to cure such breach,
then the other party may not terminate this Agreement  under this Section 9.1(g)
on account of such breach and provided,  further, that a party may not terminate
this  Agreement  pursuant  to this  Section  9.1(g) if it shall have  materially
breached this Agreement.                                                        

     9.2  Effect  of  Termination.  In the  event  of the  termination  of  this
Agreement  as provided in Section  9.1,  this  Agreement  shall be of no further
force or effect;  provided,  however,  that (i) this Section  9.2,  Section 9.3,
Section 6.2 and Section 10 shall survive the  termination  of this Agreement and
shall  remain  in full  force  and  effect,  and  (ii) the  termination  of this
Agreement  shall not relieve any party from any liability for any breach of this
Agreement.                                                                      

9.3 Fees and Expenses; Termination Fees.                              

          (a)  Except  as set  forth in this  Section  9.3,  each  party to this
Agreement shall bear and pay all fees, costs and expenses  (including legal fees
and accounting  fees) that have been incurred or that are incurred in the future
by  such  party  in  connection  with  the  transactions  contemplated  by  this
Agreement,  including  all fees,  costs and  expenses  incurred by such party in
connection with or by virtue of (a) the  investigation  and review  conducted by
such party (or its  Representatives)  with respect to the other party's business
(and the furnishing of information to the other party and its Representatives in
connection with such investigation and review), (b) the negotiation, preparation
and review of this  Agreement  and all  agreements,  certificates,  opinions and
other instruments and documents  delivered or to be delivered in connection with
the  transactions  contemplated  by  this  Agreement,  (c) the  preparation  and
submission  of any filing or notice  required to be made or given in  connection
with any of the transactions  contemplated by this Agreement,  and the obtaining
of all  Consents  and  Governmental  Authorizations  required  to be obtained in
connection with any of such transactions, and (d) the consummation of the Merger
("Out of Pocket Costs").                                                        

          (b) If this Agreement is terminated by OFPI or the Company pursuant to
Section  9.1(d),  or if this Agreement is terminated by the Company  pursuant to
Section 9.1(f), OFPI shall pay to the Company, in cash (at the time specified in
Section  9.3(c)),  the  Company's  Out of Pocket Costs  through the date of such
termination.                                                                    

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          (c) In the case of  termination  of this Agreement by OFPI pursuant to
Section  9.1(d),  the fee  referred to in Section  9.3(b)  shall be paid by OFPI
prior to such  termination,  and in the case of termination of this Agreement by
the Company pursuant to Section 9.1(d) or Section 9.1(f), the fee referred to in
Section  9.3(b) shall be paid by OFPI within three (3) business  days after such
termination.                                                                    

9.4 Indemnification by OFPI.                                          

          (a) OFPI and each OFPI Subsidiary,  jointly and severally,  shall hold
harmless and indemnify  each of the Company  Indemnitees  from and against,  and
shall compensate and reimburse each of the Company  Indemnitees for, any Damages
which are  directly  or  indirectly  suffered  or incurred by any of the Company
Indemnitees  or to which any of the Company  Indemnitees  may  otherwise  become
subject at any time  (regardless  of whether or not such  Damages  relate to any
third-party claim) and which arise directly or indirectly from or as a direct or
indirect result of, or are directly or indirectly connected with:               

               (i) any breach of any  representation or warranty made by OFPI or
any OFPI  Subsidiary in this Agreement  (without  giving effect to any update to
the OFPI Disclosure Schedule) or in the OFPI Compliance Certificate;            

               (ii)  any  breach  of any  representation,  warranty,  statement,
information  or provision  contained in the OFPI  Disclosure  Schedule or in any
other  document  delivered or otherwise  made available to the Company or any of
its  Representatives  by or on behalf  of OFPI,  any OFPI  Subsidiary  or any of
OFPI's Representatives;                                                         

               (iii) any breach of any  covenant  or  obligation  of OFPI or any
OFPI Subsidiary;                                                                

               (iv) any  Liability  to which  the  Company  or any of the  other
Company  Indemnitees  may become subject and that arises  directly or indirectly
from or relates directly or indirectly to (A) any product  manufactured or sold,
or any service  performed,  by or on behalf of OFPI or any OFPI Subsidiary on or
at any  time  prior to the  Closing  Date,  (B) the  presence  of any  Hazardous
Material at any site owned,  leased,  occupied or controlled by OFPI or any OFPI
Subsidiary on or at any time prior to the Closing  Date, or (C) the  generation,
manufacture,   production,   transportation,    importation,   use,   treatment,
refinement, processing, handling, storage, discharge, release or disposal of any
Hazardous  Material  (whether lawfully or unlawfully) by or on behalf of OFPI or
any OFPI Subsidiary on or at any time prior to the Closing Date;                

               (v) any matter identified or referred to in Part 3.21 of the OFPI
Disclosure  Schedule to the extent that it exceeds the reserve for such  matters
contained in the January 31, 1999 balance sheet;                                

            (vi) the failure to collect in full the receivable from Global
Natural Brands; or                                                              

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               (vii) any Legal Proceeding relating directly or indirectly to any
Breach,  alleged  Breach,  Liability or matter of the type referred to in clause
"(i)," "(ii),"  "(iii),"  "(iv)," or "(v)" above (including any Legal Proceeding
commenced  by any Company  Indemnitee  for the purpose of  enforcing  any of its
rights under this Section 9).                                                   

9.5 Indemnification by the Company.                                   

          (a) The Company and each Company  Subsidiary,  jointly and  severally,
shall hold harmless and indemnify each of the OFPI Indemnitees from and against,
and shall compensate and reimburse each of the OFPI Indemnitees for, any Damages
which  are  directly  or  indirectly  suffered  or  incurred  by any of the OFPI
Indemnitees or to which any of the OFPI Indemnitees may otherwise become subject
at any time (regardless of whether or not such Damages relate to any third-party
claim) and which arise  directly or  indirectly  from or as a direct or indirect
result of, or are directly or indirectly connected with:                        

               (i) any  breach of any  representation  or  warranty  made by the
Company or any Company  Subsidiary in this Agreement  (without  giving effect to
any update to the Company  Disclosure  Schedule)  or in the  Company  Compliance
Certificate;                                                                    

               (ii)  any  breach  of any  representation,  warranty,  statement,
information or provision  contained in the Company Disclosure Schedule or in any
other  document  delivered  or  otherwise  made  available to OFPI or any of its
Representatives  by or on  behalf  of  the  Company  or  any  of  the  Company's
Representatives;                                                                
               (iii) any breach of any covenant or  obligation of the Company or
any Company Subsidiary;                                                         

               (iv)  any  Liability  to  which  OFPI  or any of the  other  OFPI
Indemnitees  may become subject and that arises  directly or indirectly  from or
relates  directly or indirectly to (A) any product  manufactured or sold, or any
service performed, by or on behalf of the Company on or at any time prior to the
Closing  Date,  (B) the  presence of any  Hazardous  Material at any site owned,
leased,  occupied  or  controlled  by the Company on or at any time prior to the
Closing Date, or (C) the generation,  manufacture,  production,  transportation,
importation,  use,  treatment,   refinement,   processing,   handling,  storage,
discharge,  release or disposal of any Hazardous  Material  (whether lawfully or
unlawfully)  by or on  behalf  of the  Company  on or at any  time  prior to the
Closing Date;                                                                   

               (v) any  matter  identified  or  referred  to in Part 2.21 of the
Company Disclosure Schedule; or                                                 

               (vi) any Legal Proceeding  relating directly or indirectly to any
Breach,  alleged  breach,  Liability or matter of the type referred to in clause
"(i)," "(ii),"  "(iii),"  "(iv)," or "(v)" above (including any Legal Proceeding
commenced by any OFPI  Indemnitee for the purpose of enforcing any of its rights
under this Section 9).                                                          

     9.6  Threshold.  Neither OFPI nor the Company shall be required to make any
indemnification  payment pursuant to Sections 9.4 and 9.5,  respectively,  until
such time as the total amount of all Damages (including the Damages arising from
such Breach and all other  Damages  arising from any other Breach or  Liability)
that have been directly or indirectly suffered or incurred by any one or more of
the Company Indemnitees or OFPI Indemnitees, as the case may be, or to which any
one or more of the Company Indemnitees or OFPI Indemnities,  as the case may be,
has or have otherwise become subject, exceeds $100,000 in the aggregate. At such
time as the total amount of such Damages exceeds $100,000 in the aggregate,  the
Indemnitees shall be entitled to be indemnified  against the full amount of such
Damages (and not merely the portion of such Damages exceeding $100,000).        

     9.7 Maximum  Liability.  The total amount of the  payments  that either the
Company or OFPI can be required to make under or in connection with Sections 9.4
and 9.5 shall be  limited  in the  aggregate  to a maximum  of  $2,000,000,  and
neither the Company's nor OFPI's  respective  cumulative  liability shall exceed
such amount.                                                                    

     9.8 Calculation of Indemnification  Payments. In the event that either OFPI
or the  Company is  required  to make any  indemnification  payment  pursuant to
Sections 9.4 or 9.5, respectively,  each as limited by Sections 9.6 and 9.7, the
number  of shares  of OFPI  Common  Stock  issued  to the  Company  Shareholders
pursuant to Section 1.5(b)(iii) shall be adjusted as follows:                   

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          (a) If the Company is required to make an  indemnification  payment to
OFPI, then the number of shares of OFPI Common Stock  beneficially  owned by the
Company  Shareholders  equal to the  amount of such  required  payment  shall be
cancelled  by OFPI,  based upon a per share price of the OFPI Common Stock equal
to the average of the per share price of the OFPI Common Stock for the three (3)
trading days prior to the Closing Date; and                                     

          (b) If OFPI is  required  to make an  indemnification  payment  to the
Company,  then the number of shares of OFPI Common  Stock equal to the amount of
such required payment shall be issued by OFPI to the Company  Shareholders based
upon a per share price of the OFPI Common  Stock equal to the average of the per
share price of the OFPI Common Stock for the three (3) trading days prior to the
Closing Date.                                                                   

SECTION 10. MISCELLANEOUS PROVISIONS.                                           

     10.1 Survival of Representations  and Warranties.  The  representations and
warranties  contained in this Agreement or in any instrument  delivered pursuant
to this Agreement shall survive the Merger for a period of two (2) years.       

     10.2 Further  Assurances.  Each party hereto shall  execute and cause to be
delivered to each other party hereto such instruments and other  documents,  and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or  evidencing  any
of the transactions contemplated by this Agreement.                             

     10.3 Attorneys'  Fees.  Subject to Section 9.3(b),  if any action at law or
suit in equity to enforce  this  Agreement  or the rights of any of the  parties
hereunder is brought  against any party hereto,  the  prevailing  party shall be
entitled to recover  reasonable  attorneys'  fees, costs and  disbursements  (in
addition to any other relief to which the prevailing party may be entitled).    

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     10.4 Notices. Any notice or other communication required or permitted to be
delivered  to any party  under this  Agreement  shall be in writing and shall be
deemed  properly  delivered,  given and received  when  delivered  (by hand,  by
registered  mail, by courier or express delivery service or by facsimile) to the
address or facsimile  telephone  number set forth beneath the name of such party
below (or to such other  address  or  facsimile  telephone  number as such party
shall have specified in a written notice given to the other parties hereto):    

if to OFPI:                                                   

ORGANIC FOOD PRODUCTS, INC.                 
550 Monterey Road, Suite B                  
Morgan Hill, CA  95037                      
Attention: Chief Executive Officer          
Facsimile: (408) 782-1143                   

with a copy to (which shall not constitute notice):           

     Carr, McClellan, Ingersoll, Thompson & Horn, P.C.
216 Park Road                               
P.O. Box 513                                
Burlingame, CA  94011                       
Attention: James F. Blood, Esq.             
Facsimile: (650) 342-7685                   

if to the Company:                                            

SPECTRUM NATURALS, INC.                     
133 Copeland Street                         
Petaluma, CA  94951                         
Attention: Chief Executive Officer          
Facsimile: (707) 765-1026                   

with a copy to (which shall not constitute notice):           

COOLEY GODWARD LLP                          
One Maritime Plaza, 20th Floor              
San Francisco, CA  94111                    
Attention: Susan Cooper Philpot, Esq.       
Facsimile: (415) 951-3699                   

     All such  notices  and  other  communications  shall be deemed to have been
received (a) in the case of personal delivery, on the date of such delivery, (b)
in the case of a telecopy,  when the party  receiving  such telecopy  shall have
confirmed receipt of the communication or when a confirming copy is delivered to
the  recipient  pursuant to this  Section  10.4,  (c) in the case of delivery by
nationally recognized, overnight courier, on the business day following dispatch
and (d) in the  case of  mailing,  on the  fifth  business  day  following  such
mailing.                                                                        

10.5 Time of the Essence. Time is of the essence of this Agreement.   

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     10.6 Governing Law; Venue.  This Agreement shall be construed in accordance
with,  and  governed  in all  respects  by,  the  internal  laws of the State of
California (without giving effect to principles of conflicts of laws).          

     10.7  Successors  and  Assigns.  Except as provided in Section  10.8,  this
Agreement  shall be binding upon and shall be enforceable by and inure solely to
the benefit of, the parties hereto and their  successors and assigns;  provided,
however,  that this  Agreement  may not be  assigned  by any party  without  the
written consent of the other parties,  and any attempted assignment without such
consent shall be void and of no effect.                                         

     10.8 Remedies Cumulative;  Specific Performance. The rights and remedies of
the parties  hereto shall be cumulative  (and not  alternative).  The parties to
this  Agreement  agree that, in the event of any breach or threatened  breach by
any party to this Agreement of any covenant,  obligation or other  provision set
forth in this  Agreement  for the benefit of any other party to this  Agreement,
such other party shall be entitled  (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the  observance and  performance  of such covenant,  obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.  

10.9 Waiver.                                                          

          (a) No failure on the part of any Person to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any Person
in exercising any power, right, privilege or remedy under this Agreement,  shall
operate as a waiver of such power, right,  privilege or remedy; and no single or
partial  exercise of any such power,  right,  privilege or remedy shall preclude
any other or further exercise thereof or of any other power, right, privilege or
remedy.                                                                         

          (b) No Person shall be deemed to have waived any claim  arising out of
this Agreement,  or any power, right,  privilege or remedy under this Agreement,
unless the waiver of such claim, power, right,  privilege or remedy is expressly
set forth in a written  instrument duly executed and delivered on behalf of such
Person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.                                     

     10.10 Amendments.  This Agreement may not be amended,  modified, altered or
supplemented  other  than by means of a written  instrument  duly  executed  and
delivered on behalf of all of the parties hereto.                               

   10.11 Severability. In the event that any provision of this Agreement, or
the  application  of any such  provision to any Person or set of  circumstances,
shall be  determined  to be  invalid,  unlawful,  void or  unenforceable  to any
extent,  the remainder of this Agreement,  and the application of such provision
to Persons or circumstances  other than those as to which it is determined to be
invalid,  unlawful,  void or  unenforceable,  shall not be impaired or otherwise
affected and shall  continue to be valid and  enforceable  to the fullest extent
permitted by law.                                                               

     10.12  Parties in Interest.  None of the  provisions  of this  Agreement is
intended to provide any rights or remedies to any Person  other than the parties
hereto and their respective successors and assigns (if any); provided,  however,
that the  provisions of Section  1.5(c) shall inure to the benefit of and may be
enforced by holders of Company Options,  and the provisions of Section 6.7 shall
inure to the benefit of and may be enforced by the Indemnified Parties.         

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     10.13 Disclosure  Schedules.  The disclosure schedules shall be arranged in
separate parts  corresponding to the numbered and lettered sections contained in
Section 2 or in Section 3, as the case may be. The information  disclosed in any
numbered or lettered  part shall be deemed to be disclosed and  incorporated  in
any other  numbered or lettered part where the  relevance of such  disclosure to
another  numbered  or  lettered  part  would be  reasonably  apparent  from such
disclosure.                                                                     

     10.14 Entire Agreement. This Agreement and the other agreements referred to
herein set forth the entire  understanding of the parties hereto relating to the
subject matter hereof and supersede all prior and contemporaneous agreements and
understandings  among or between  any of the  parties  relating  to the  subject
matter hereof.                                                                  

10.15 Construction.                                                   

          (a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural,  and vice versa;  the masculine gender
shall include the feminine and neuter genders; the feminine gender shall include
the  masculine  and neuter  genders;  and the neuter  gender  shall  include the
masculine and feminine genders.                                                 

          (b) The  parties  hereto  agree that any rule of  construction  to the
effect that  ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.             

          (c) As used in this Agreement,  the words  "include" and  "including,"
and  variations  thereof,  shall not be deemed  to be terms of  limitation,  but
rather shall be deemed to be followed by the words "without limitation."        

          (d) Except as otherwise indicated, all references in this Agreement to
"Sections"  and  "Exhibits"  are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.                                                 

     10.16 Headings. The bold-faced section headings contained in this Agreement
are for convenience of reference only,  shall not be deemed to be a part of this
Agreement and shall not be referred to in connection  with the  construction  or
interpretation of this Agreement.                                               

     10.17 Counterparts. This Agreement may be executed in several counterparts,
each of  which  shall  constitute  an  original  and all of  which,  when  taken
together, shall constitute one and the same instrument.                         

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     The  parties  hereto  have  caused  this  Agreement  and Plan of Merger and
Reorganization to be executed and delivered as of the date first written above. 

                            ORGANIC FOOD PRODUCTS, INC.,
                        a California corporation

                              By:  /s/ Richard R. Bacigalupi
                                             -----------------------------------
                           Name: Richard R. Bacigalupi

                              Title: Chief Financial Officer

                        SPECTRUM NATURALS, INC.,
                        a California corporation

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

                   Title: CEO/Chairman

 AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
SIGNATURE PAGE

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 EXHIBIT A

 CERTAIN DEFINITIONS

For purposes of the Agreement (including this Exhibit A):             

     Acquisition  Proposal.  "Acquisition  Proposal"  shall  mean  any  offer or
proposal  (other than an offer or proposal by OFPI or the  Company,  as the case
may  be)  contemplating  or  otherwise  relating  to  any  Company   Acquisition
Transaction or OFPI Acquisition Transaction, as the case may be.                

     Agreement.  "Agreement"  shall  mean the  Agreement  and Plan of Merger and
Reorganization  to  which  this  Exhibit  A is  attached  (including  all  other
exhibits), as it may be amended from time to time.                              

     Breach.  There  shall  be  deemed  to be a  "Breach"  of a  representation,
warranty,  covenant,  obligation or other  provision if there is or has been (a)
any  inaccuracy in or breach of, or any failure to comply with or perform,  such
representation,  warranty,  covenant,  obligation or other provision, or (b) any
claim (by any  Person)  or other  circumstance  that is  inconsistent  with such
representation,  warranty, covenant, obligation or other provision; and the term
"Breach" shall be deemed to refer to any such inaccuracy, breach, failure, claim
or circumstance.                                                                

     Company Acquisition  Transaction.  "Company Acquisition  Transaction" shall
mean any transaction involving:                                                 

          (a) any sale,  lease  exchange,  transfer or other  disposition of the
assets of Company or any Company  Subsidiary  constituting  more than 10% of the
consolidated  assets  of  Company  or  accounting  for  more  than  10%  of  the
consolidated  revenues  of  Company  in any one  transaction  or in a series  of
related transactions.                                                           

          (b) any offer to purchase, tender offer, exchange offer or any similar
transaction or series of related  transactions made by any Person involving more
than 10% of the  outstanding  shares of the capital  stock of the Company or any
shares of the capital stock of any Company Subsidiary.                          

          (c) any merger, consolidation,  business combination,  share exchange,
reorganization  or other similar  transaction or series of related  transactions
involving Company or any Company Subsidiary.                                    

          (d) any assignment,  transfer or licensing or other disposition of, in
whole or in part,  the Company  Proprietary  Assets,  other than in the ordinary
course of business.                                                             

     Company  Comparable  Entities.  "Company  Comparable  Entities"  shall mean
Entities (other than the Company) that are engaged in businesses  similar to the
Company's business.                                                             

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     Company Contract.  "Company Contract" shall mean any Contract: (a) to which
the Company is a party;  (b) by which the Company or any of its assets is or may
become  bound or under  which the  Company  has,  or may become  subject to, any
obligation;  or (c) under  which the  Company  has or may  acquire  any right or
interest.                                                                       

     Company Disclosure  Schedule.  "Company Disclosure Schedule" shall mean the
schedule  (dated  as of the  date  of the  Agreement)  delivered  to OFPI by the
Company.                                                                        

     Company  Indemnitees.   "Company  Indemnitees"  shall  mean  the  following
Persons:                                                                        

(a) the Company;                                            

     (b) the Company's current and future affiliates (including OFPI);

          (c) the  respective  Representatives  of the  Persons  referred  to in
clauses "(a)" and "(b)" above; and                                              

          (d) the respective  successors and assigns of the Persons  referred to
in clauses "(a)", "(b)" and "(c)" above;                                        

provided,  however,  that (i)  neither  OFPI nor any  OFPI  Subsidiary  shall be
entitled to exercise  any rights as a Company  Indemnitee  prior to the Closing,
and (ii)  shareholders of OFPI other than the Persons that receive Merger Shares
pursuant to the Merger shall not be deemed to be "Company Indemnitees."         

     Company Option.  "Company Option" shall mean any option to purchase capital
stock of the Company held by any director, officer or employee of, or consultant
to, the Company.                                                                

     Company  Proprietary  Asset.  "Company  Proprietary  Asset"  shall mean any
Proprietary Asset owned by or licensed to the Company or any Company  Subsidiary
or otherwise used by the Company or any Company Subsidiary.                     

     Company  Shareholders.  "Company  Shareholders" shall mean those holders of
Company Common Stock entitled to receive shares of OFPI Common Stock pursuant to
Section 1.5.                                                                    

     Company  Triggering Event. A "Company  Triggering Event" shall be deemed to
have  occurred if: (i) the Board of  Directors  of Company  shall have failed to
recommend,  or shall for any reason  have  withdrawn  or shall  have  amended or
modified in a manner adverse to OFPI its unanimous  recommendation  in favor of,
the Merger or approval or adoption of this  Agreement;  (ii) Company  shall have
failed to include in the Joint Proxy Statement the unanimous  recommendation  of
the Board of  Directors  of Company in favor of  approval  and  adoption of this
Agreement  and the Merger;  (iii) the Board of Directors  of Company  shall have
approved,  endorsed or recommended any Acquisition Proposal;  (iv) Company shall
have  entered  into any letter of intent or  similar  document  or any  Contract
relating to any Acquisition Proposal;  (v) Company shall have failed to hold the
Company Shareholders' Meeting as promptly as practicable and in any event within
45 days after the  definitive  Proxy  Statement  was filed with the SEC;  (vi) a
tender or exchange  offer  relating  to  securities  of Company  shall have been

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commenced  and Company shall not have sent to its  securityholders,  within five
business  days  after the  commencement  of such  tender or  exchange  offer,  a
statement  disclosing  that  Company  recommends  rejection  of such  tender  or
exchange offer; (vii) an Acquisition Proposal is publicly announced, and Company
(A) fails to issue a press release announcing its opposition to such Acquisition
Proposal within five business days after such Acquisition  Proposal is announced
or (B) otherwise fails to actively oppose such Acquisition Proposal; or (viii) a
person or group  (as  defined  in the  Exchange  Act and the  rules  promulgated
thereunder)  shall have  acquired more than fifty percent (50%) of the Company's
voting  securities  (excluding  persons and groups that,  as of the date of this
Agreement, hold more than fifty percent (50%) of the Company's voting securities
or that may be deemed to have acquired  such  percentage  upon  execution of the
Voting Agreements).                                                             

     Consent.  "Consent"  shall  mean  any  approval,   consent,   ratification,
permission, waiver or authorization (including any Governmental Authorization). 

     Contract.  "Contract"  shall  mean any  written,  oral or other  agreement,
contract,  subcontract,   lease,  understanding,   instrument,  note,  warranty,
insurance policy,  benefit plan, or legally binding commitment or undertaking of
any nature.                                                                     

     Damages.  "Damages"  shall  include any loss,  damage,  injury,  decline in
value, lost opportunity,  Liability, claim, demand, settlement, judgment, award,
fine, penalty,  Tax, fee (including any legal fee, expert fee, accounting fee or
advisory fee), charge,  cost (including any cost of investigation) or expense of
any nature.                                                                     

     Employee  Benefit  Plan.  "Employee  Benefit  Plan"  shall have the meaning
specified in Section 3(3) of ERISA.                                             

     Encumbrance.  "Encumbrance"  shall  mean any lien,  pledge,  hypothecation,
charge,  mortgage,   security  interest,   encumbrance,   claim,   infringement,
interference,  option,  right  of first  refusal,  preemptive  right,  community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset,  any restriction on the receipt of any income derived from any asset, any
restriction  on the use of any  asset  and any  restriction  on the  possession,
exercise or transfer of any other attribute of ownership of any asset).         

     Entity.  "Entity"  shall mean any  corporation  (including  any  non-profit
corporation),   general  partnership,  limited  partnership,  limited  liability
partnership,  joint venture,  estate, trust, company, limited liability company,
joint stock company,  firm or other  enterprise,  association,  organization  or
entity.                                                                         

     Exchange  Act.  "Exchange  Act" shall mean the  Securities  Exchange Act of
1934, as amended.                                                               

     Governmental  Authorization.  "Governmental  Authorization" shall mean any:
(a)   permit,   license,   certificate,    franchise,   permission,   clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal  Requirement;  or (b) right under any Contract  with any  Governmental
Body.                                                                           

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     Governmental Body.  "Governmental Body" shall mean any: (a) nation,  state,
commonwealth,  province,  territory,  county,  municipality,  district  or other
jurisdiction of any nature; (b) federal,  state,  local,  municipal,  foreign or
other  government;  or (c) governmental or  quasi-governmental  authority of any
nature (including any governmental  division,  department,  agency,  commission,
instrumentality,  official,  organization, unit, body or Entity and any court or
other tribunal).                                                                

     Joint  Proxy  Statement.  "Joint  Proxy  Statement"  shall  mean that proxy
statement to be prepared by OFPI with the cooperation of the Company to be filed
with the SEC and to be included or  incorporated  by reference into the Form S-4
registration statement to be filed by OFPI with the SEC.                        

     Knowledge.  "Knowledge"  shall mean, as it relates to either the Company or
OFPI with  respect to any matter in  question,  that any of the Chief  Executive
Officer,  Chief Financial Officer or any other executive officers of the Company
or OFPI, as the case may be, has actual knowledge of such matter.               

     Legal  Proceeding.   "Legal  Proceeding"  shall  mean  any  action,   suit,
litigation,    arbitration,   proceeding   (including   any   civil,   criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination  or  investigation  commenced,  brought,  conducted  or  heard by or
before,  or otherwise  involving,  any court or other  Governmental  Body or any
arbitrator or arbitration panel.                                                

     Legal  Requirement.  "Legal  Requirement"  shall mean any  federal,  state,
local,  municipal,  foreign or other law,  statute,  constitution,  principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted,  promulgated,  implemented or otherwise
put into effect by or under the authority of any Governmental Body.             

     Liability.  "Liability" shall mean any debt, obligation,  duty or liability
of  any  nature  (including  any  unknown,  undisclosed,  unmatured,  unaccrued,
unasserted,  contingent, indirect, conditional,  implied, vicarious, derivative,
joint,  several  or  secondary  liability),  regardless  of  whether  such debt,
obligation,  duty or  liability  would be required to be  disclosed on a balance
sheet prepared in accordance with generally accepted  accounting  principles and
regardless of whether such debt,  obligation,  duty or liability is  immediately
due and payable.                                                                

     Material Adverse Effect. A violation or other matter will be deemed to have
a "Material  Adverse Effect" on the Company or OFPI, as the case may be, if such
violation or other matter would have a material  adverse effect on the business,
condition, assets, liabilities,  operations,  financial performance or prospects
of the Company and its subsidiaries or the OFPI and its subsidiaries  taken as a
whole, as the case may be.                                                      

     OFPI Acquisition Transaction. "OFPI Acquisition Transaction" shall mean any
transaction involving:                                                          

          (a) any sale,  lease  exchange,  transfer or other  disposition of the
assets  of  OFPI  or any  OFPI  Subsidiary  constituting  more  than  10% of the
consolidated  assets of OFPI or accounting for more than 10% of the consolidated
revenues of OFPI in any one transaction or in a series of related transactions. 

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          (b) any offer to purchase, tender offer, exchange offer or any similar
transaction or series of related  transactions made by any Person involving more
than 10% of the outstanding shares of the capital stock of OFPI or any shares of
the capital stock of any OFPI Subsidiary.                                       

          (c) any merger, consolidation,  business combination,  share exchange,
reorganization  or other similar  transaction or series of related  transactions
involving OFPI or any OFPI Subsidiary.                                          

          (d) any assignment,  transfer or licensing or other disposition of, in
whole or in part, the OFPI Proprietary Assets, other than in the ordinary course
of business.                                                                    

     OFPI Comparable  Entities.  "OFPI Comparable  Entities" shall mean Entities
(other than OFPI or an OFPI Subsidiary)  that are engaged in businesses  similar
to OFPI's business or the business of any OFPI Subsidiary.                      

     OFPI Contract.  "OFPI Contract" shall mean any Contract:  (a) to which OFPI
is a party;  (b) by which OFPI or any of its  assets is or may  become  bound or
under which OFPI has, or may become  subject  to, any  obligation;  or (c) under
which OFPI has or may acquire any right or interest.                            

     OFPI  Disclosure  Schedule.  "OFPI  Disclosure  Schedule"  shall  mean  the
schedule  (dated as of the date of the  Agreement)  delivered  to the Company by
OFPI.                                                                           

OFPI Indemnitees. "OFPI Indemnitees" shall mean the following Persons:

(a) OFPI;                                         

(b) any OFPI Subsidiary;                          

               (c) the respective  Representatives of the Persons referred to in
clauses "(a)" and "(b)" above; and                                              

               (d) the respective successors and assigns of the Persons referred
to in clauses "(a)", "(b)" and "(c)" above;                                     

provided,  however,  that (i) the Company  shall not be entitled to exercise any
rights as an OFPI  Indemnitee  prior to the  Closing,  and (ii) the Persons that
receive any Merger Shares shall not be deemed to be "OFPI Indemnitees."         

     OFPI Proprietary Asset. "OFPI Proprietary Asset" shall mean any Proprietary
Asset owned by or licensed to OFPI or any OFPI  Subsidiary or otherwise  used by
OFPI or any OFPI Subsidiary.                                                    

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     OFPI Triggering  Event. A "OFPI  Triggering  Event" shall be deemed to have
occurred if: (i) the Board of Directors of OFPI shall have failed to  recommend,
or shall for any reason have  withdrawn  or shall have  amended or modified in a
manner  adverse to the Company  its  unanimous  recommendation  in favor of, the
Merger or approval or adoption of this Agreement; (ii) OFPI shall have failed to
include in the Joint Proxy Statement the unanimous  recommendation  of the Board
of Directors of OFPI in favor of approval and adoption of this Agreement and the
Merger;  (iii) the Board of Directors of OFPI shall have  approved,  endorsed or
recommended  any  Acquisition  Proposal;  (iv) OFPI shall have  entered into any
letter of intent or similar document or any Contract relating to any Acquisition
Proposal;  (v) OFPI shall have failed to hold the OFPI Shareholders'  Meeting as
promptly as  practicable  and in any event  within 45 days after the  definitive
Proxy Statement was filed with the SEC; (vi) a tender or exchange offer relating
to securities of OFPI shall have been  commenced and OFPI shall not have sent to
its  securityholders,  within five business days after the  commencement of such
tender or exchange offer, a statement  disclosing that OFPI recommends rejection
of such  tender or exchange  offer;  (vii) an  Acquisition  Proposal is publicly
announced, and OFPI (A) fails to issue a press release announcing its opposition
to such  Acquisition  Proposal within five business days after such  Acquisition
Proposal is announced or (B) otherwise fails to actively oppose such Acquisition
Proposal;  or (viii) a person or group (as defined in the  Exchange  Act and the
rules promulgated  thereunder) shall have acquired more than fifty percent (50%)
of OFPI's voting securities  (excluding  persons and groups that, as of the date
of this  Agreement,  hold  more  than  fifty  percent  (50%)  of  OFPI's  voting
securities or that may be deemed to have acquired such percentage upon execution
of the Voting Agreements).                                                      

  Person. "Person" shall mean any individual, Entity or Governmental Body.

     Proprietary Asset.  "Proprietary Asset" shall mean any: (a) patent,  patent
application,   trademark   (whether   registered  or  unregistered),   trademark
application,  trade  name,  fictitious  business  name,  service  mark  (whether
registered  or  unregistered),  service  mark  application,  copyright  (whether
registered  or  unregistered),   copyright   application,   maskwork,   maskwork
application,  trade secret, know-how, customer list, franchise, system, computer
software,   source  code,  computer  program,   invention,   design,  blueprint,
engineering drawing, proprietary product, technology, proprietary right or other
intellectual  property right or intangible asset; or (b) right to use or exploit
any of the foregoing.                                                           

     Representatives.   "Representatives"   shall  mean   officers,   directors,
employees, agents, attorneys, accountants, advisors and representatives.        

     SEC. "SEC" shall mean the United States Securities and Exchange Commission.

     Securities Act.  "Securities Act" shall mean the Securities Act of 1933, as
amended.                                                                        

     Superior  Company  Proposal.  "Superior  Company  Proposal"  shall  mean an
unsolicited,  bona fide written  proposed  Acquisition  Proposal  submitted by a
third  party that the Board of  Directors  of the  Company  determines,  in good
faith,  based  upon the  written  advice of its  financial  advisor,  to be more
favorable from a financial point of view to the Company's  shareholders than the
terms of the Merger; provided, however, that any such Acquisition Proposal shall
not be deemed to be a "Superior Company  Proposal" if any financing  required to
consummate the  transaction  contemplated  by such offer is not committed at the
time such Acquisition Proposal is made.                                         

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     Superior OFPI Proposal. "Superior OFPI Proposal" shall mean an unsolicited,
bona fide written proposed  Acquisition Proposal submitted by a third party that
the Board of Directors of OFPI determines, in good faith, based upon the written
advice of its financial advisor,  to be more favorable from a financial point of
view to the OFPI's Shareholders than the terms of the Merger; provided, however,
that any such  Acquisition  Proposal  shall not be deemed to be a "Superior OFPI
Proposal" if any financing  required to consummate the transaction  contemplated
by such offer is not committed at the time such Acquisition Proposal is made.   

     Tax.  "Tax" shall mean any tax  (including  any income tax,  franchise tax,
capital gains tax, gross receipts tax,  value-added tax, surtax,  excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment,  tariff, duty (including
any  customs  duty),  deficiency  or  fee,  and any  related  charge  or  amount
(including any fine, penalty or interest),  imposed, assessed or collected by or
under the authority of any Governmental Body.                                   

     Tax Return.  "Tax Return" shall mean any return  (including any information
return),   report,   statement,   declaration,   estimate,   schedule,   notice,
notification, form, election, certificate or other document or information filed
with or  submitted  to,  or  required  to be filed  with or  submitted  to,  any
Governmental Body in connection with the determination,  assessment,  collection
or payment of any Tax or in connection with the  administration,  implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax. 

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 EXHIBIT B

AMENDED AND RESTATED

 ARTICLES OF INCORPORAITON

OF

 SPECTRUM ORGANIC PRODUCTS, INC.

JOHN BATTENDIERI and RICHARD BACIGALUPI certify that:         

     1. They are the President and Secretary of Organic Food  Products,  Inc., a
California corporation.                                                         

     2. The  Articles  of  Incorporation  of this  corporation  are  amended and
restated to read as follows:                                                    

I.

The name of this corporation is Spectrum Organic Products, Inc.       

 II.

               The purpose of this corporation is to engage in any lawful act or
          activity for which a  corporation  may be organized  under the General
          Corporation  Law of California  other than the banking  business,  the
          trust company business or the practice of a profession permitted to be
incorporated by the California Corporations Code.           

III.

               (A) This  corporation  is  authorized  to issue  two  classes  of
          shares,  to be designated  common and  preferred,  respectively.  This
          corporation is authorized to issue  60,000,000  shares of common stock
and 5,000,000 shares of preferred stock.                    

               (B) The preferred stock may be divided into such number of series
          as the board of  directors  may  determine.  The board of directors is
          authorized to determine and alter the rights, preferences,  privileges
          and restrictions granted to or imposed upon any wholly unissued series
          of preferred  stock,  and to fix the number of shares of any series of
          preferred  stock and the  designation  of any such series of preferred
          stock.  The board of  directors,  within the  limits and  restrictions
          stated in any  resolution  or  resolutions  of the board of  directors
          originally  fixing the number of shares  constituting any series,  may
          increase  or  decrease  (but not  below  the  number of shares of such
          series then outstanding) the number of shares of any series subsequent
to the issue of shares of that series.                      

 IV.

               The  liability of the directors of the  corporation  for monetary
          damages shall be eliminated to the fullest  extent  permissible  under
California law.                                             

V.

               The  corporation  is  authorized  to provide  indemnification  of
          agents (as defined in Section 317 of the California Corporations Code)
          through   bylaws   provisions,   agreements   with  agents,   vote  of
          shareholders or disinterested directors or otherwise, in excess of the
          indemnification  otherwise  permitted by Section 317 of the California
          Corporations  Code, subject only to the applicable limits set forth in
          Section  204 of the  California  Corporations  Code  with  respect  to
       actions for breach of duty to the corporation and its shareholders.

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     3. The foregoing amended and restated  articles of incorporation  have been
duly approved by the board of directors.                                        

     4. The foregoing amended and restated  articles of incorporation  have been
duly approved by the required vote of  shareholders  in accordance  with Section
902 of the  Corporations  Code.  The total number of  outstanding  shares of the
corporation is __________. The number of shares voting in favor of the amendment
equaled or exceeded the vote  required.  The  percentage  vote required was more
than fifty percent (50%).                                                       

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.                                                           

Date: __________________, 1999                                        

                                            ------------------------------------
                                                 , President
                       ---------------

                                            ------------------------------------
                                                 , Secretary
                       ---------------

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 EXHIBIT C

DIRECTORS AND OFFICERS OF PARENT

DIRECTORS:                                                                      

Jethren Phillips                                                                

John Battendieri                                                                

Phillip Moore                                                                   

To be determined                                                                

To be determined                                                                

OFFICERS                                                                        

Jethren Phillips                       Chief Executive Officer                  

Richard Bacigalupi                     Chief Financial Officer and Treasurer    

Neil Blomquist                         Secretary                                

Other executive officers to be determined by OFPI and Company                   

*  Member of Audit Committee                                                    

** Member of Compensation Committee                                             

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 EXHIBIT D

BYLAWS
OF
 SPECTRUM ORGANIC PRODUCTS, INC.

ARTICLE I 

 OFFICES

     SECTION 1. PRINCIPAL OFFICES. The Board of Directors shall fix the location
of the  principal  executive  office of the  corporation  at any place within or
outside the State of California.  If the principal  executive  office is located
outside this state, and the corporation has one or more business offices in this
state,  the Board of  Directors  shall fix and  designate a  principal  business
office in the State of California.                                              

     SECTION 2. OTHER OFFICES.  The Board of Directors may at any time establish
branch or subordinate offices at any place or places.                           

ARTICLE II

MEETINGS OF SHAREHOLDERS

     SECTION 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at any
place  within or  outside  the State of  California  designated  by the Board of
Directors  or by the written  consent of all persons  entitled to vote  thereat,
given  either  before or after the meeting and filed with the  Secretary  of the
corporation.  In the  absence of any such  designation,  shareholders'  meetings
shall be held at the principal executive office of the corporation.             

     SECTION 2. ANNUAL MEETING. The annual meeting of shareholders shall be held
on the 15th day of July in each year at 10:00  a.m.  or such  other date or such
other time as may be fixed by the Board; provided, however, if this day falls on
a Saturday, Sunday, or legal holiday, then the meeting shall be held at the same
time and place on the next  succeeding  full  business day. Any date so fixed by
the Board shall be within sixty (60) days after the date  designated  above.  At
this meeting,  directors shall be elected,  and any other proper business may be
transacted which is within the powers of the shareholders.                      

     SECTION 3. SPECIAL  MEETING.  A special meeting of the  shareholders may be
called at any time by the Board of  Directors,  or by the Chairman of the Board,
or by the  President,  or by one or  more  shareholders  holding  shares  in the
aggregate entitled to cast not fewer than 10% of the votes at that meeting.     

     If a special meeting is called by any person or persons  entitled to call a
special  meeting  of the  shareholders  other than the Board of  Directors,  the
request shall be in writing, specifying the time of such meeting and the general

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nature  of the  business  proposed  to be  transacted,  and  shall be  delivered
personally  or sent by  registered  mail or by  telegraphic  or other  facsimile
transmission to the Chairman of the Board, the President, any Vice President, or
the Secretary of the corporation.  The officer receiving the request shall cause
notice to be promptly given to the shareholders  entitled to vote, in accordance
with the  provisions of Sections 4 and 5 of this Article II, that a meeting will
be held at the time requested by the person or persons calling the meeting,  not
fewer than  thirty-five  (35) nor more than sixty (60) days after the receipt of
the request. If the notice is not given within twenty (20) days after receipt of
the request,  the person or persons  requesting the meeting may give the notice.
Nothing  contained  in this  paragraph  of this  Section 3 shall be construed as
limiting,  fixing or affecting the time when a meeting of shareholders called by
action of the Board of Directors may be held.                                   

     SECTION 4.  NOTICE OF  SHAREHOLDERS'  MEETINGS.  All notices of meetings of
shareholders  shall be sent or otherwise given to each  shareholder  entitled to
vote thereat in accordance  with Section 5 of this Article II not fewer than ten
(10) nor more than sixty (60) days  before the date of the  meeting.  The notice
shall  specify the place,  date and hour of the meeting and (i) in the case of a
special  meeting,  the general  nature of the business to be  transacted  and no
other  business may be  transacted,  or (ii) in the case of the annual  meeting,
those matters  which the Board of  Directors,  at the time of giving the notice,
intends to present for action by the shareholders, but subject to the provisions
of Section 601(f) of the Corporations Code of California,  any proper matter may
be presented at the meeting for such action.  The notice of any meeting at which
directors  are to be elected  shall  include the name of any nominee or nominees
whom, at the time of the notice, management intends to present for election.    

     If action is  proposed  to be taken at any  meeting  for  approval of (i) a
contract or transaction  in which a director has a direct or indirect  financial
interest,  pursuant to Section 310 of the Corporations Code of California,  (ii)
an amendment of the Articles of  Incorporation,  pursuant to Section 902 of that
Code,  (iii) a reorganization  of the  corporation,  pursuant to Section 1201 of
that Code, (iv) a voluntary dissolution of the corporation,  pursuant to Section
1900 of that Code, or (v) a distribution in dissolution other than in accordance
with the rights of  outstanding  preferred  shares,  pursuant to Section 2007 of
that Code, the notice shall also state the general nature of that proposal.     

     SECTION 5.  MANNER OF GIVING  NOTICE;  AFFIDAVIT  OF NOTICE.  Notice of any
meeting of shareholders  shall be given either personally or by first-class mail
or telegraphic or other written communication, charges prepaid, addressed to the
shareholder  at the address of that  shareholder  appearing  on the books of the
corporation or given by the  shareholder to the  corporation  for the purpose of
notice.  If no such  address  appears  on the  corporation's  books or is given,
notice  shall  be  deemed  to have  been  given if sent to that  shareholder  by
first-class   mail  or  telegraphic  or  other  written   communication  to  the
corporation's  principal  executive  office,  or if published at least once in a
newspaper  of general  circulation  in the county  where that office is located.
Notice shall be deemed to have been given at the time when delivered  personally
or  deposited  in the  mail  or sent by  telegram  or  other  means  of  written
communication.                                                                  

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     If any notice addressed to a shareholder at the address of that shareholder
appearing on the books of the  corporation is returned to the corporation by the
United  States Postal  Service  marked to indicate that the United States Postal
Service is unable to deliver the notice to the shareholder at that address,  all
future  notices  or  reports  shall be deemed to have  been duly  given  without
further mailing if these shall be available to the shareholder on written demand
of the  shareholder at the principal  executive  office of the corporation for a
period of one year from the date of the giving of the notice.                   

     An  affidavit  of the  mailing  or other  means of giving any notice of any
shareholders'  meeting shall be executed by the Secretary,  Assistant Secretary,
or any transfer agent of the corporation  giving the notice,  and shall be filed
and maintained in the minute book of the corporation.                           

     SECTION 6.  QUORUM.  The presence in person or by proxy of the holders of a
majority of the shares  entitled to vote at any  meeting of  shareholders  shall
constitute a quorum for the transaction of business. The shareholders present at
a duly called or held  meeting at which a quorum is present  may  continue to do
business   until   adjournment,   notwithstanding   the   withdrawal  of  enough
shareholders  to leave  less than a quorum,  if any  action  taken  (other  than
adjournment)  is  approved  by at least a  majority  of the shares  required  to
constitute a quorum.                                                            

     SECTION 7. ADJOURNED MEETING;  NOTICE THEREOF.  Any shareholders'  meeting,
annual or special,  whether or not a quorum is present,  may be  adjourned  from
time to time by the  vote of the  majority  of the  shares  represented  at that
meeting,  either in person or by proxy, but in the absence of a quorum, no other
business may be transacted  at that meeting,  except as provided in Section 6 of
this Article II.                                                                

     When any meeting of shareholders, either annual or special, is adjourned to
another time or place,  notice need not be given of the adjourned meeting if the
time and place are  announced  at a meeting at which the  adjournment  is taken,
unless a new  record  date for the  adjourned  meeting  is fixed,  or unless the
adjournment  is for more  than  forty-five  (45)  days from the date set for the
original  meeting,  in which case the Board of Directors  shall set a new record
date.  If the  adjournment  is for more than  forty-five  (45) days, or if a new
record  date is  fixed  for the  adjourned  meeting,  then  notice  of any  such
adjourned  meeting shall be given to each shareholder of record entitled to vote
at the adjourned  meeting in accordance  with the provisions of Sections 4 and 5
of this Article II. At any adjourned  meeting the  corporation  may transact any
business which might have been transacted at the original meeting.              

     SECTION 8.  VOTING.  The  shareholders  entitled  to vote at any meeting of
shareholders shall be determined in accordance with the provisions of Section 11
of this Article II, subject to the provisions of Section 702 to 704,  inclusive,
of the  Corporations  Code of  California  (relating to voting  shares held by a
fiduciary,  in  the  name  of  a  corporation,   or  in  joint  ownership).  The
shareholders' vote may be by voice vote or by ballot;  provided,  however,  that
any  election  for  directors  must be by ballot if demanded by any  shareholder
before the voting has begun.  On any matter other than  elections of  directors,
any shareholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal,  but, if the

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shareholder  fails to specify  the  number of shares  which the  shareholder  is
voting  affirmatively,  it will be conclusively  presumed that the shareholder's
approving vote is with respect to all shares that the shareholder is entitled to
vote. If a quorum is present, the affirmative vote of the majority of the shares
represented  at the meeting and  entitled to vote on any matter  (other than the
election of directors) shall be the act of the shareholders,  unless the vote of
a greater  number or  voting  by  classes  is  required  by  California  General
Corporation Law or by the Articles of Incorporation.                            

     At a  shareholders'  meeting  at  which  directors  are to be  elected,  no
shareholder  shall be entitled to cumulate votes (i.e., cast for any one or more
candidates  a number  of votes  greater  than the  number  of the  shareholder's
shares) unless the candidate or candidates' names have been placed in nomination
prior to  commencement of the voting and a shareholder has given notice prior to
commencement of the voting of the shareholder's  intention to cumulate votes. If
any shareholder has given such a notice, then every shareholder entitled to vote
may cumulate  votes for candidates in nomination and give one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which that  shareholder's  shares are entitled,  or  distribute  the
shareholder's votes on the same principle among any or all of the candidates, as
the  shareholder  thinks fit. The  candidates  receiving  the highest  number of
votes, up to the number of directors to be elected, shall be elected.           

     SECTION  9.  WAIVER OF  NOTICE  OR  CONSENT  BY  ABSENT  SHAREHOLDERS.  The
transactions of any meeting of shareholders,  either annual or special,  however
called and noticed, and wherever held, shall be valid as though had at a meeting
duly held after regular call and notice, if a quorum be present either in person
or by proxy, and if, either before or after the meeting, each person entitled to
vote,  who was not  present  in person or by  proxy,  signs a written  waiver of
notice or a consent to a holding of the meeting,  or an approval of the minutes.
The waiver of notice or consent  need not  specify  either  the  business  to be
transacted  or the  purpose of any annual or  special  meeting of  shareholders,
except that if action is taken or  proposed  to be taken for  approval of any of
those matters specified in the second paragraph of Section 4 of this Article II,
the waiver of notice or consent shall state the general  nature of the proposal.
All such  waivers,  consents  or  approvals  shall be filed  with the  corporate
records or made a part of the minutes of the meeting.                           

     Attendance  by a person  at a meeting  shall  also  constitute  a waiver of
notice of that meeting,  except when the person objects, at the beginning of the
meeting,  to the transaction of any business because the meeting is not lawfully
called or convened,  and except that  attendance at a meeting is not a waiver of
any  right to object  to the  consideration  of  matters  required  by law to be
included in the notice of the meeting but not so included if that  objection  is
expressly made at the meeting.                                                  

     SECTION 10.  SHAREHOLDER  ACTION BY WRITTEN CONSENT WITHOUT A MEETING.  Any
action which may be taken at any annual or special meeting of  shareholders  may
be taken without a meeting and without  prior  notice,  if a consent in writing,
setting  forth the  action so taken,  is signed by the  holders  of  outstanding
shares having not fewer than the minimum number of votes that would be necessary

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to  authorize  or take that action at a meeting at which all shares  entitled to
vote on that  action  were  present  and  voted.  In the  case  of  election  of
directors,  such a consent  shall be effective  only if signed by the holders of
all outstanding shares entitled to vote for the election of directors;  provided
however,  that a  director  may be  elected at any time to fill a vacancy on the
Board of Directors,  other than a vacancy created by removal,  that has not been
filled by the directors,  by the written consent of the holders of a majority of
the outstanding shares entitled to vote for the election of directors.  All such
consents  shall be filed  with the  Secretary  of the  corporation  and shall be
maintained in the corporate  records.  Any shareholder giving a written consent,
or the shareholder's  proxy holders, or a transferee of the shares or a personal
representative of the shareholder or their respective proxy holders,  may revoke
the consent by a writing  received  by the  corporation  before  consents of the
number of shares  required to authorize the proposed action have been filed with
the Secretary of the corporation.                                               

     If the  consents  of all  shareholders  entitled  to  vote  have  not  been
solicited  in  writing,  and if  the  unanimous  written  consent  of  all  such
shareholders  shall not have been  received,  the  Secretary  shall give  prompt
notice of the corporate action approved by the  shareholders  without a meeting,
to those shareholders  entitled to vote who have not consented in writing.  This
notice  shall be given in the manner  specified in Section 5 of this Article II.
In the case of approval of (i) contracts or transactions in which a director has
a  direct  or  indirect  financial  interest,  pursuant  to  Section  310 of the
Corporations  Code  of  California,   (ii)  indemnification  of  agents  of  the
corporation, pursuant to Section 317 of that Code, (iii) a reorganization of the
corporation,  pursuant to Section 1201 of that Code, and (iv) a distribution  in
dissolution  other than in accordance  with the rights of outstanding  preferred
shares,  pursuant  to Section  2007 of that Code,  the notice  shall be given at
least ten (10) days before the  consummation  of any action  authorized  by that
approval.                                                                       

     SECTION 11. RECORD DATE FOR SHAREHOLDER NOTICE, VOTING AND GIVING CONSENTS.
For the  purposes  of  determining  the  shareholders  entitled to notice of any
meeting or to vote or entitled to give  consent to  corporate  action  without a
meeting,  the Board of Directors may fix, in advance, a record date, which shall
not be more than sixty (60) days nor fewer than ten (10) days before the date of
any such meeting nor more than sixty (60) days before any such action  without a
meeting,  and in this event only shareholders of record on the date so fixed are
entitled  to  notice  and to vote  or to  give  consents,  as the  case  may be,
notwithstanding any transfer of any shares on the books of the corporation after
the  record  date,  except  as  otherwise  provided  in the  California  General
Corporation Law.                                                                

If the Board of Directors does not so fix a record date:              

          (a) The record date for determining shareholders entitled to notice or
to vote at a meeting of  shareholders  shall be at the close of  business on the
business  day next  preceding  the day on which notice is given or, if notice is
waived,  at the close of business on the business day next  preceding the day on
which the meeting is held.                                                      

          (b) The record  date for  determining  shareholders  entitled  to give
consent  to  corporate  action in writing  without a meeting,  (i) when no prior
action by the board has been taken,  shall be the day on which the first written

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consent is given,  or (ii) when prior action of the board has been taken,  shall
be at the close of business on the day on which the board adopts the  resolution
relating to that action,  or the sixtieth (60) day before the date of such other
action,  whichever is later.                                                    

     SECTION 12. PROXIES.  Every person entitled to vote for directors or on any
matter  shall have the right to do so either in person or by one or more  agents
authorized  by a written proxy signed by the person and filed with the Secretary
of the corporation.  A proxy shall be deemed signed if the shareholder's name is
placed  on the proxy  (whether  by manual  signature,  typewritten,  telegraphic
transmission,  or otherwise) by the shareholder or the shareholder's attorney in
fact. A validly executed proxy which does not state that it is irrevocable shall
continue in full force and effect unless (i) revoked by the person executing it,
before  the  vote  pursuant  to  that  proxy,  by a  writing  delivered  to  the
corporation stating that the proxy is revoked, or by a subsequent proxy executed
by, or attendance  at the meeting and voting in person by, the person  executing
the proxy;  or (ii) written  notice of the death or  incapacity  of the maker of
that proxy is received by the corporation before the vote pursuant to that proxy
is counted; provided, however, that no proxy shall be valid after the expiration
of eleven (11) months from the date of the proxy,  unless otherwise  provided in
the  proxy.  The  revocability  of a proxy  that  states  on its face that it is
irrevocable shall be governed by the provisions of Sections 705(e) and 705(f) of
the Corporation Code of California.                                             

     SECTION 13. INSPECTORS OF ELECTION. Before any meeting of shareholders, the
Board of Directors may appoint any persons other than nominees for office to act
as inspectors of election at the meeting or its adjournment. If no inspectors of
election are so  appointed,  the chairman of the meeting may, and on the request
of any  shareholder  or a  shareholder's  proxy  shall,  appoint  inspectors  of
election at the  meeting.  The number of  inspectors  shall be either one (1) or
three (3). If  inspectors  are  appointed  at a meeting on the request of one or
more  shareholders  or  proxies,  the  holders of a majority  of shares or their
proxies  present at the  meeting  shall  determine  whether one (1) or three (3)
inspectors are to be appointed.  If any person  appointed as inspector  fails to
appear or fails or refuses to act, the chairman of the meeting may, and upon the
request of any shareholder or a shareholder's  proxy,  shall appoint a person to
fill that vacancy.                                                              

These inspectors shall:                                               

          (a) Determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting,  the existence of a quorum, and the
authenticity, validity, and effect of proxies.                                  

(b) Receive votes, ballots, or consents:                    

          (c) Hear and determine all challenges and questions in any way arising
in  connection  with the  right to vote;                                        

(d) Count and tabulate all votes or consents;               

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(e) Determine when the polls shall close;                   

(f) Determine the result; and                               

          (g) Do any other acts that may be proper to conduct  the  election  or
vote with fairness to all shareholders.                                         

         If there  are  three  inspectors  of  election,  the  decision,  act or
certificate  of a majority is effective in all respects as the decision,  act or
certificate of all.                                                             

ARTICLE III 

 DIRECTORS

     SECTION 1. POWERS.  Subject to the  provisions  of the  California  General
Corporation Law and any limitations in the Articles of  Incorporation  and these
bylaws relating to action required to be approved by the  shareholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all  corporate  powers shall be  exercised by or under the  direction of the
Board of Directors.  Without  prejudice to these general powers,  and subject to
the same limitations, the directors shall have the power to:                    

          (a) Select  and remove all  officers,  agents,  and  employees  of the
corporation;  prescribe any powers and duties for them that are consistent  with
law,  with the  Articles  of  Incorporation,  and with these  bylaws;  fix their
compensation; and require from them security for faithful service.              

          (b) Change the principal  executive  office or the principal  business
office  in the State of  California  from one  location  to  another;  cause the
corporation  to be  qualified  to do  business  in any other  state,  territory,
dependency,  or country  and  conduct  business  within or without  the State of
California;  and  designate  any place within or without the State of California
for the holding of any  shareholders'  meeting,  or meetings,  including  annual
meetings.                                                                       

          (c) Adopt,  make,  and use a corporate  seal;  prescribe  the forms of
certificates  of stock;  and alter  the form of the seal and  certificates.     

          (d)  Authorize the issuance of shares of stock of the  corporation  on
any lawful terms and for such  consideration as may be lawful.                  

          (e) Borrow money and incur  indebtedness on behalf of the corporation,
and cause to be executed and delivered for the  corporation's  purposes,  in the
corporate name, promissory notes, bonds, debentures,  deeds of trust, mortgages,
pledges,  hypothecations,  and  other  evidences  of debt  and  securities.     

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          (f)  Conduct,  manage and  control  the  affairs  and  business of the
corporation  and to make such rules and  regulations  therefor not  inconsistent
with law, or with the Articles or these bylaws,  as they may deem best.         

     SECTION 2. NUMBER AND QUALIFICATION OF DIRECTORS.  The authorized number of
directors  shall be five (5) until  changed by a duly  adopted  amendment to the
Articles of  Incorporation  or by an amendment to this bylaw duly adopted by the
shareholders;  provided,  however,  that an  amendment  reducing  the  number of
directors  to a number  fewer  than five (5) cannot be adopted if the votes cast
against its adoption at a meeting,  or the shares not  consenting in the case of
action by written  consent,  are equal to more than  16-2/3% of the  outstanding
shares entitled to vote.                                                        

     SECTION 3.  ELECTION AND TERM OF OFFICE OF  DIRECTORS.  Directors  shall be
elected at each annual meeting of the shareholders to hold office until the next
annual meeting.  Each director,  including a director elected to fill a vacancy,
shall hold office until the  expiration of the terms for which elected and until
a successor has been elected and qualified.                                     

     SECTION  4.  VACANCIES.  Except for a vacancy  created by the  removal of a
director,  vacancies in the Board of Directors  may be filled by approval of the
Board,  or, if the number of directors then in office is less than a quorum,  by
(a) the  unanimous  written  consent of the  directors  then in office,  (b) the
affirmative  vote of a majority of directors  then in office,  at a meeting held
pursuant to notice or waivers of notice,  or (c) a sole  remaining  director.  A
vacancy  created by the removal of a director by the vote or written  consent of
the  shareholders or by court order may be filled only by the vote of a majority
of the shares  entitled to vote  represented  at a duly held  meeting at which a
quorum is present, or by the unanimous written consent of all of the outstanding
shares entitled to vote for the election of directors.  Each director so elected
shall hold office until the next annual meeting of the  shareholders and until a
successor has been elected and qualified.                                       

     A vacancy or vacancies  in the Board of Directors  shall be deemed to exist
in the event of the death,  resignation,  or removal of any director,  or if the
Board of Directors by  resolution  declares  vacant the office of a director who
has been declared of unsound mind by an order of court or convicted of a felony,
or if the authorized  number of directors is increased,  or if the  shareholders
fail,  at any meeting of  shareholders  at which any director or  directors  are
elected, to elect the number of directors to be voted for at that meeting.      

     The  shareholders may elect a director or directors at any time to fill any
vacancy or  vacancies  not filled by the  directors,  but any such  election  by
written  consent  shall  require the  consent of a majority  of the  outstanding
shares entitled to vote.                                                        

     Any director may resign  effective on giving written notice to the Chairman
of the Board, the President,  the Secretary,  or the Board of Directors,  unless
the notice specifies a later time for that resignation to become  effective.  If
the  resignation  of a director  is  effective  at a future  time,  the Board of
Directors  may elect a successor  to take office  when the  resignation  becomes
effective.                                                                      

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     No reduction of the authorized number of directors shall have the effect of
removing any director before that director's term of office expires.            

     SECTION 5. PLACE OF MEETING AND MEETINGS BY TELEPHONE.  Regular meetings of
the Board of  Directors  may be held at any place within or outside the State of
California  that has been  designated  from  time to time by  resolution  of the
board. In the absence of such a designation,  regular  meetings shall be held at
the principal executive office of the corporation. Special meetings of the board
shall be held at any place  within or outside the State of  California  that has
been  designated in the notice of the meeting or, if not stated in the notice or
there is no notice,  at the principal  executive office of the corporation.  Any
meeting,  regular or special,  may be held by conference  telephone,  or similar
communication  equipment,  so long as all directors participating in the meeting
can hear one another,  and all such  directors  shall be deemed to be present in
person at the meeting.                                                          

     SECTION 6. ANNUAL  MEETING.  Immediately  following  each annual meeting of
shareholders,  the  Board of  Directors  shall  hold a regular  meeting  for the
purpose of organization,  any desired election of officers,  and the transaction
of other business. Notice of this meeting shall not be required.                

     SECTION 7. OTHER REGULAR  MEETINGS.  Other regular meetings of the Board of
Directors  shall be held  without call at such time and place as shall from time
to time be fixed by the Board of  Directors.  Such regular  meetings may be held
without notice.                                                                 

     SECTION 8. SPECIAL MEETINGS. Special meetings of the Board of Directors for
any purpose or purposes  may be called at any time by the  Chairman of the Board
or the President or any Vice President or the Secretary or any two directors.   

     Notice  of the  time and  place  of  special  meetings  shall be  delivered
personally  or by  telephone  to each  director or sent by  first-class  mail or
telegrams,  charges  prepaid,  addressed  to each  director  at that  director's
address as it is shown on the records of the corporation.  In case the notice is
mailed,  it shall be deposited in the United  States mail at least four (4) days
before the time of the holding of the  meeting.  In case the notice is delivered
personally or by telephone or telegram,  it shall be delivered  personally or by
telephone or to the telegraph company at least forty-eight (48) hours before the
time of the holding of the  meeting.  Any oral  notice  given  personally  or by
telephone  may be  communicated  either  to the  director  or to a person at the
office of the  director  who the person  giving the notice has reason to believe
will promptly  communicate  it to the director.  The notice need not specify the
purpose  of the  meeting  nor  the  place  if the  meeting  is to be held at the
principal executive office of the corporation.                                  

     SECTION 9. QUORUM.  A majority of the authorized  number of directors shall
constitute  a quorum  for the  transaction  of  business,  except to  adjourn as
provided in Section 11 of this Article III.  Every act or decision  done or made
by a majority of the directors  present at a meeting duly held at which a quorum
is present  shall be regarded as the act of the Board of  Directors,  subject to
the  provisions of Section 310 of the  Corporations  Code of  California  (as to

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approval  of  contracts  or  transactions  in which a  director  has a direct or
indirect  material  financial  interest),  Section  311  of  that  Code  (as  to
appointment   of   committees),   and  Section   317(e)  of  that  Code  (as  to
indemnification of directors).  A meeting at which a quorum is initially present
may continue to transact business  notwithstanding  the withdrawal of directors,
if any action  taken is approved by at least a majority of the  required  quorum
for that meeting.                                                               

     SECTION 10. WAIVER OF NOTICE.  The  transaction of any meeting of the Board
of Directors,  however called and noticed or wherever held, shall be as valid as
though had at a meeting  duly held after  regular call and notice if a quorum is
present and if,  either  before or after the meeting,  each of the directors not
present signs a written waiver of notice, a consent to holding the meeting or an
approval of the  minutes.  The waiver of notice or consent  need not specify the
purpose of the meeting. All such waivers, consents, and approvals shall be filed
with the corporate records or made a part of the minutes of the meeting.  Notice
of a meeting  shall also be deemed given to any director who attends the meeting
without  protesting  before or at its  commencement,  the lack of notice to that
director.                                                                       

     SECTION 11.  ADJOURNMENT.  A majority of the directors present,  whether or
not constituting a quorum, may adjourn any meeting to another time and place.   

SECTION 12.  NOTICE OF  ADJOURNMENT.  Notice of the time and place of holding an
adjourned  meeting need not be given,  unless the meeting is adjourned  for more
than  twenty-four  hours,  in which case  notice of the time and place  shall be
given  before the time of the  adjourned  meeting,  in the manner  specified  in
Section 8 of this Article III, to the directors who were not present at the time
of the adjournment.                                                             

     SECTION 13. ACTION WITHOUT MEETING.  Any action required or permitted to be
taken by the Board of Directors may be taken  without a meeting,  if all members
of the board  shall  individually  or  collectively  consent  in writing to that
action. Such action by written consent shall have the same force and effect as a
unanimous vote of the Board of Directors. Such written consent or consents shall
be filed with the minutes of the proceedings of the board.                      

     SECTION 114. FEES AND  COMPENSATION OF DIRECTORS.  Directors and members of
committees may receive such compensation,  if any, for their services,  and such
reimbursement  of expenses,  as may be fixed or  determined by resolution of the
Board of  Directors.  This  Section 14 shall not be  construed  to preclude  any
director from  servicing the  corporation  in any other  capacity as an officer,
agent,  employee, or otherwise,  and receiving  compensation for those services.

ARTICLE IV

COMMITTEES

     SECTION  1.  COMMITTEES  OF  DIRECTORS.  The  Board of  Directors  may,  by
resolution  adopted  by a  majority  of  the  authorized  number  of  directors,
designate one or more committees,  each consisting of two or more directors,  to
serve  at the  pleasure  of the  board.  The  board  may  designate  one or more
directors  as  alternate  members of any  committee,  who may replace any absent
member at any meeting of the committee. Any committee, to the extent provided in
the resolution of the board,  shall have all the authority of the board,  except
with respect to:                                                                

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          (a) the approval of any action  which,  under the General  Corporation
Law of  California,  also  requires  shareholders'  approval  or approval of the
outstanding shares;                                                             

          (b) the  filling  of  vacancies  on the Board of  Directors  or in any
committee;                                                                      

          (c) the fixing of  compensation  of the  directors  for serving on the
board or on any committee;                                                      

        (d) the amendment or repeal of bylaws or the adoption of new bylaws;

          (e)  the  amendment  or  repeal  of any  resolution  of the  Board  of
Directors which by its express terms is not so amendable or repealable;         

          (f) a distribution to the shareholders of the corporation, except at a
rate or in a periodic amount or within a price range  determined by the Board of
Directors.                                                                      

          (g) the appointment of any other  committees of the Board of Directors
or the members of these committees.                                             

     SECTION  2.  MEETINGS  AND  ACTION OF  COMMITTEES.  Meetings  and action of
committees  shall be governed  by, and held and taken in  accordance  with,  the
provisions  of Article III of these bylaws,  Sections 5 (place of  meetings),  7
(regular meetings),  8 (special meetings and notice), 9 (quorum),  10 (waiver of
notice),  11 (adjournment),  12 (notice of adjournment),  and 13 (action without
meeting),  with such changes in the context of those bylaws as are  necessary to
substitute  the  committee  and its members for the Board of  Directors  and its
members,  except  that  the  time  of  regular  meetings  of  committees  may be
determined  either by  resolution  of the Board of Directors or by resolution of
the committee;  special  meetings of committees may also be called by resolution
of the Board of Directors;  and notice of special  meetings of committees  shall
also be given to all alternate  members,  who shall have the right to attend all
meetings  of the  committee.  The Board of  Directors  may  adopt  rules for the
government  of any  committee  not  inconsistent  with the  provisions  of these
bylaws.                                                                         

ARTICLE V 

OFFICERS

     SECTION 1. OFFICERS.  The officers of the corporation shall be a President,
a Secretary, and a Treasurer (Chief Financial Officer). The corporation may also
have at the discretion of the Board of Directors,  a Chairman of the Board,  one
or  more  Vice  Presidents,  one or  more  Assistant  Secretaries,  one or  more
Assistant Treasurers,  and such other officers as may be appointed in accordance
with  provisions  of Section 3 of this  Article V. Any number of offices  may be
held by the same person.                                                        

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     SECTION 2. ELECTION OF OFFICERS.  The officers of the  corporation,  except
such officers as may be appointed in accordance with the provisions of Section 3
or Section 5 of this Article V, shall be chosen by the Board of  Directors,  and
each shall serve at the pleasure of the board subject to the rights,  if any, of
an officer under any contract of employment.                                    

     SECTION 3. SUBORDINATE  OFFICERS.  The Board of Directors may appoint,  and
may empower the President to appoint, such other officers as the business of the
corporation  may require,  each of whom shall hold office for such period,  have
such  authority  and perform such duties as are provided in the bylaws or as the
Board of Directors may from time to time determine.                             

     SECTION 4. REMOVAL AND RESIGNATION OF OFFICERS.  Subject to the rights,  if
any, of an officer under any contract of employment, any officer may be removed,
either  with or  without  cause,  by the Board of  Directors  at any  regular or
special  meeting  of the board or,  except in case of an  officer  chosen by the
Board of  Directors,  by any  officer  upon whom such  power of  removal  may be
conferred by the Board of Directors.                                            

     Any  officer  may  resign  at any  time by  giving  written  notice  to the
corporation.  Any  resignation  shall take  effect at the date of the receipt of
that notice or at any later time specified in that notice; and, unless otherwise
specified  in that  notice,  the  acceptance  of the  resignation  shall  not be
necessary to make it  effective.  Any  resignation  is without  prejudice to the
rights,  if any, of the corporation under any contract to which the officer is a
party.                                                                          

     SECTION 5. VACANCIES IN OFFICES.  A vacancy in any office because of death,
resignation,  removal,  disqualification,  or any other cause shall be filled in
the manner prescribed in these bylaws for regular appointments to that office.  

     SECTION 6.  CHAIRMAN OF THE BOARD.  The  Chairman of the Board,  if such an
officer be  elected,  shall,  if  present,  preside at  meetings of the Board of
Directors  and  exercise and perform such other powers and duties as may be from
time to time  assigned to him by the Board of  Directors  or  prescribed  by the
bylaws. If there is no President, the Chairman of the Board shall in addition be
the chief  executive  officer of the  corporation  and shall have the powers and
duties prescribed in Section 7 of this Article V.                               

     SECTION 7. PRESIDENT. Subject to such supervisory powers, if any, as may be
given by the Board of Directors  to the Chairman of the Board,  if there be such
an  officer,  the  President  shall  be  the  chief  executive  officer  of  the
corporation  and shall,  subject to the control of the Board of Directors,  have
general supervision,  direction, and control of the business and the officers of
the corporation.  He shall preside at all meetings of the  shareholders  and, in
the absence of the Chairman of the Board,  or if there be none,  at all meetings
of the Board of  Directors.  He shall  have the  general  powers  and  duties of
management  usually vested in the office of the President of a corporation,  and
shall have such other  powers  and duties as may be  prescribed  by the Board of
Directors or the bylaws.                                                        

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     SECTION 8. VICE PRESIDENTS.  In the absence or disability of the President,
the Vice  Presidents,  if any,  in order of their  rank as fixed by the Board of
Directors  or,  if not  ranked,  a Vice  President  designated  by the  Board of
Directors,  shall  perform all the duties of the  President,  and when so acting
shall have all the powers of, and be subject to all the  restrictions  upon, the
President.  The Vice  Presidents  shall have such other  powers and perform such
other duties as from time to time may be prescribed for them respectively by the
Board of  Directors  or the bylaws,  and the  President,  or the Chairman of the
Board.                                                                          

     SECTION 9. SECRETARY.  The Secretary shall keep or cause to be kept, at the
principal  executive  office or such other place as the Board of  Directors  may
direct,  a book of minutes of all meetings and actions of directors,  committees
of  directors,  and  shareholders,  with the time and place of holding,  whether
regular or special, and, if special, how authorized, the notice given, the names
of those present at  directors'  meetings or committee  meetings,  the number of
shares present or represented at shareholders' meetings, and the proceedings.   

     The Secretary  shall keep, or cause to be kept, at the principal  executive
office or at the office of the corporation's transfer agent or registrar, if one
be  appointed,  a  record  of  its  shareholders,   showing  the  names  of  all
shareholders and their addresses, the number and classes of shares held by each,
the number and date of certificates issued for the same, and the number and date
of cancellation of every certificate surrendered for cancellation.              

     The Secretary  shall give, or cause to be given,  notice of all meetings of
the  shareholders  and of the Board of Directors and of any  committees  thereof
required by the bylaws or by law to be given,  and he shall keep the seal of the
corporation,  if one be  adopted,  in safe  custody,  and shall  have such other
powers  and  perform  such  other  duties as may be  prescribed  by the Board of
Directors or by the bylaws.                                                     

     SECTION 10. TREASURER.  The Treasurer is the Chief Financial Officer of the
corporation  and shall keep and  maintain,  or cause to be kept and  maintained,
adequate  and  correct  books and  records of  accounts  of the  properties  and
business  transactions  of the  corporation,  including  accounts of its assets,
liabilities, receipts, disbursements, gains, losses, capital, retained earnings,
and  shares.  The  books of  account  shall at all  reasonable  times be open to
inspection by any director.                                                     

     The Treasurer (Chief Financial  Officer) shall deposit all moneys and other
valuables  in  the  name  and  to  the  credit  of  the  corporation  with  such
depositaries  as may be designated by the Board of Directors.  He shall disburse
the funds of the corporation as may be ordered by the Board of Directors,  shall
render to the President and  directors,  whenever they request it, an account of
all of his  transactions  as  Treasurer  (Chief  Financial  Officer)  and of the
financial condition of the corporation,  and shall have other powers and perform
such other duties as may be prescribed by the Board of Directors or the bylaws. 

ARTICLE VI

 INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The corporation  shall,  to the maximum extent  permitted by the California
General  Corporation Law,  indemnify each of its officers and directors  against
expenses,   judgments,   fines,  settlements  and  other  amounts  actually  and
reasonably  incurred in connection with any proceeding  arising by reason of the
fact any such person is or was an agent of the corporation.                     

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ARTICLE VII 

 RECORDS AND REPORTS

     SECTION 1.  MAINTENANCE AND INSPECTION OF SHARE  REGISTER.  The corporation
shall keep at its principal  executive  office, or at the office of its transfer
agent or registrar, if either be appointed, a record of its shareholders, giving
the names and addresses of all  shareholders  and the number and class of shares
held by each shareholder.                                                       

     A shareholder  or  shareholders  of the  corporation  holding at least five
percent  (5%)  in  the  aggregate  of  the  outstanding  voting  shares  of  the
corporation  may (i)  inspect and copy the  records of  shareholders'  names and
addresses  and share  holdings  during usual  business  hours on five days prior
written  demand on the  corporation,  and (ii) obtain from the transfer agent of
the  corporation,  on written demand and on the tender of such transfer  agent's
usual charges for such list, a list of the  shareholders'  names and  addresses,
who are  entitled  to vote  for the  election  of  directors,  and  their  share
holdings,  as of the most  recent  record  date  for  which  that  list has been
compiled or as of a date specified by the shareholder  after the date of demand.
This list shall be made available to any such  shareholder by the transfer agent
on or before the later of five (5) days after the demand is received or the date
specified  in the  demand as the date of which the list is to be  compiled.  The
record of shareholders shall also be open to inspection on the written demand of
any  shareholder  or holder of a voting  trust  certificate,  at any time during
usual business hours, for a purpose reasonably related to the holder's interests
as a shareholder or as the holder of a voting trust certificate.  Any inspection
and  copying  under  this  Section  1 may be made in  person  or by an  agent or
attorney of the shareholder or holder of a voting trust  certificate  making the
demand.                                                                         

     SECTION 2. MAINTENANCE AND INSPECTION OF BYLAWS. The corporation shall keep
at its principal  executive office, or if its principal  executive office is not
in the State of California,  at its principal business office in this state, the
original  or a copy of the  bylaws as amended  to date,  which  shall be open to
inspection by the  shareholders at all reasonable  times during office hours. If
the  principal  executive  office of the  corporation  is  outside  the State of
California and the corporation  has no principal  business office in this state,
the Secretary  shall,  upon the written request of any  shareholder,  furnish to
that shareholder a copy of the bylaws as amended to date.                       

     SECTION 3.  MAINTENANCE  AND  INSPECTION OF OTHER  CORPORATE  RECORDS.  The
accounting  books and records and minutes of proceedings of the shareholders and
the Board of Directors and any committee or committees of the Board of Directors
shall be kept at such place or places designated by the Board of Directors,  or,
in the absence of such  designation,  at the principal  executive  office of the
corporation.  The minutes shall be kept in written form and the accounting books

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and records shall be kept either in written form or in any other form capable of
being converted in to written form. The minutes and accounting books and records
shall be open to inspection upon the written demand of any shareholder or holder
of a voting trust  certificate,  at any  reasonable  time during usual  business
hours,  for  a  purpose  reasonably  related  to  the  holder's  interests  as a
shareholder or as the holder of a voting trust  certificate.  The inspection may
be made in person or by an agent or  attorney,  and shall  include  the right to
copy and make extracts.  These rights of inspection  shall extend to the records
of each subsidiary corporation of the corporation.                              

     SECTION 4. INSPECTION BY DIRECTORS.  Every director shall have the absolute
right at any  reasonable  time to inspect all books,  records,  and documents of
every  kind  and the  physical  properties  of the  corporation  and each of its
subsidiary corporations.  This inspection by a director may be made in person or
by an agent or attorney and the right of  inspection  includes the right to copy
and make extracts of documents.                                                 

     SECTION 5. ANNUAL REPORT TO SHAREHOLDERS. The annual report to shareholders
referred  to in  Section  1501  of the  California  General  Corporation  Law is
expressly dispensed with, but nothing herein shall be interpreted as prohibiting
the Board of Directors  from  issuing  annual or other  periodic  reports to the
shareholders of the corporation as they consider appropriate.                   

     SECTION 6. ANNUAL STATEMENT OF GENERAL INFORMATION.  The corporation shall,
during the applicable filing period designated by Section 1502 of the California
General  Corporation  Law, in each year, file with the Secretary of State of the
State of  California,  on the  prescribed  form, a statement  setting  forth the
authorized  number of  directors,  the names and complete  business or residence
addresses  of all  incumbent  directors,  the names  and  complete  business  or
residence  addresses  of the  chief  executive  officer,  Secretary,  and  chief
financial  officer,  the street  address of its  principal  executive  office or
principal  business  office in this  state,  and the  general  type of  business
constituting the principal business activity of the corporation, together with a
designation  of the agent of the  corporation  for the  purpose  of  service  of
process,  all in  compliance  with  Section  1502  of the  Corporations  Code of
California.                                                                     

ARTICLE VIII

 GENERAL CORPORATE MATTERS

     SECTION 7. RECORD  DATE FOR  PURPOSES  OTHER THAN  NOTICE AND  VOTING.  For
purposes of  determining  the  shareholders  entitled to receive  payment of any
dividend  or other  distribution  or  allotment  of any  rights or  entitled  to
exercise any rights in respect of any other lawful  action (other than action by
shareholders by written  consent without a meeting),  the Board of Directors may
fix, in  advance,  a record  date,  which shall not be more than sixty (60) days
before any such action, and in that case only shareholders of record on the date
so fixed are  entitled to receive the  dividend,  distribution,  or allotment of
rights  or to  exercise  the  rights,  as the case may be,  notwithstanding  any
transfer of any shares on the books of the corporation  after the record date so
fixed, except as otherwise provided in the California General Corporation Law.  

     If the Board of Directors  does not so fix a record  date,  the record date
for  determining  shareholders  for any such  purpose  shall be at the  close of
business on the day on which the board adopts the  applicable  resolution or the
sixtieth (60th) day before the date of that action, whichever is later.         

     SECTION 8. CHECKS, DRAFTS,  EVIDENCES OF INDEBTEDNESS.  All checks, drafts,
or other orders for payment of money, notes, or other evidences of indebtedness,
issued in the name of or payable to the corporation, shall be signed or endorsed
by such  person or  persons  and in such  manner as from time to time,  shall be
determined by resolution of the Board of Directors.                             

     SECTION 9. CORPORATE CONTRACTS AND INSTRUMENTS;  HOW EXECUTED. The Board of
Directors,  except as otherwise  provided in these  bylaws,  may  authorize  any
officer or officers,  agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the  corporation,  and this authority
may be general or confined to specific  instances;  and, unless so authorized or
ratified by the Board of Directors or within the agency power of an officer,  no
officer,  agent,  or  employee  shall  have any power or  authority  to bind the
corporation  by any contract of  engagement or to pledge its credit or to render
it liable for any purpose or for any amount.                                    

     SECTION 10.  CERTIFICATES  FOR SHARES.  A certificate or  certificates  for
shares  of the  capital  stock  of the  corporation  shall  be  issued  to  each
shareholder  when any of these shares are fully paid, and the Board of Directors
may  authorize  the issuance of  certificates  or shares as partly paid provided
that these  certificates  shall state the amount of the consideration to be paid
for them and the amount paid.  All  certificates  shall be signed in the name of
the  corporation  by the Chairman of the Board or Vice  Chairman of the Board or
the  President  or Vice  President  and by the  Chief  Financial  Officer  or an
Assistant Treasurer or the Secretary or any Assistant Secretary,  certifying the
number of shares and the class or series of shares owned by the shareholder. Any
or all of the  signatures  on the  certificate  may be  facsimile.  In case  any
officer,  transfer  agent,  or  registrar  who has  signed  or  whose  facsimile
signature has been placed on a certificate shall have ceased to be that officer,
transfer agent, or registrar before that certificate is issued, it may be issued
by the  corporation  with the same  effect as if that  person  were an  officer,
transfer agent, or registrar at the date of issue.                              

     SECTION 11. LOST CERTIFICATES. Except as provided in this Section 5, no new
certificates for shares shall be issued to replace an old certificate unless the
latter is  surrendered  to the  corporation  and cancelled at the same time. The
Board of Directors may, in case any share  certificate  or  certificate  for any
other  security is lost,  stolen,  or  destroyed,  authorize  the  issuance of a
replacement  certificate  on such terms and conditions as the board may require,
including  provision for indemnification of the corporation secured by a bond or
other adequate security  sufficient to protect the corporation against any claim
that may be made against it,  including any expense or liability,  on account of
the alleged loss,  theft,  or destruction of the  certificate or the issuance of
the replacement certificate.                                                    

     SECTION 12. REPRESENTATION OF SHARES OF OTHER CORPORATIONS. The Chairman of
the Board, the President,  or any Vice President, or any other person authorized
by resolution  of the Board of Directors or by any of the  foregoing  designated

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officers,  is authorized to vote on behalf of the corporation any and all shares
of any other corporation or corporations,  foreign or domestic,  standing in the
name of the  corporation.  The  authority  granted to these  officers to vote or
represent  on  behalf  of  the  corporation  any  and  all  shares  held  by the
corporation in any other  corporation or corporations may be exercised by any of
these  officers in person or by any person  authorized  to do so by a proxy duly
executed by these officers.                                                     

     SECTION 13.  CONSTRUCTION  AND  DEFINITIONS.  Unless the  context  requires
otherwise, the general provisions, rules of construction, and definitions in the
California  General  Corporation  Law shall  govern  the  construction  of these
bylaws.  Without limiting the generality of this provision,  the singular number
includes  the plural,  the plural  number  includes the  singular,  and the term
"person" includes both a corporation and a natural person.                      

ARTICLE IX

AMENDMENTS

     SECTION 1.  AMENDMENT BY  SHAREHOLDERS.  New bylaws may be adopted or these
bylaws may be amended or repealed by the vote or written consent of holders of a
majority of the outstanding shares entitled to vote; provided,  however, that if
the  Articles  of  Incorporation  of the  corporation  set forth  the  number of
authorized directors of the corporation,  the authorized number of directors may
be changed only by an amendment of the Articles of Incorporation.               

     Section  2.   AMENDMENT  BY  DIRECTORS.   Subject  to  the  rights  of  the
shareholders  as provided in Section 1 of this Article IX, to adopt,  amend,  or
repeal  bylaws,  bylaws  may be  adopted,  amended or  repealed  by the Board of
Directors,  provided,  however,  that  after the  issuance  of  shares,  a bylaw
specifying  or changing  the fixed number of directors or the maximum or minimum
number or  changing  from a fixed to a variable  board or vice versa may only be
adopted by approval of the outstanding shares.                                  

KNOW ALL MEN BY THESE PRESENTS:                                       

     That we, the  undersigned,  being all of the directors of Spectrum  Organic
Products,  Inc., hereby assent to the foregoing bylaws and hereby adopt the same
as the bylaws of the said corporation.                                          

     IN WITNESS  WHEREOF,  we have subscribed our names hereto as of the ___ day
of ______, 1999.                                                                

                                             -----------------------------------

                                             -----------------------------------

ATTEST:                                                                         

-------------------------------                                                 

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CERTIFICATE OF SECRETARY

I, the undersigned, do hereby certify:                                

     1. That I am the duly  elected and acting  Secretary  of  Spectrum  Organic
Products, Inc., a California corporation; and                                   

     2. That the foregoing bylaws,  comprising __ pages,  constitute a true copy
of the original bylaws of said  corporation as duly adopted at the first meeting
of the Board of Directors thereof duly held.                                    

     IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal
of said corporation as of the ___ day of ____ 1989.                             

                                          --------------------------------------
                                             SECRETARY

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 EXHIBIT E

 CERTAIN OFPI SHAREHOLDERS

                            No. of Shares of Common     Percent of Outstanding
 Shareholder Name:            Stock Held                Common Stock Held:
 -----------------            ----------                ------------------

John Battendieri             2,102,499                       27.8%      
Ken Steel                      279,363                        3.7%      
Chas Bonner                         0                         0.0%      

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EXHIBIT F 

 FORM OF
 COMPANY TAX REPRESENTATION LETTER

                                                                    May __, 1999

Cooley Godward LLP                      Carr, McClellan, Ingersoll, Thompson    
One Maritime Plaza                      & Horn, P.C.                            
20th Floor                              216 Park Road, P.O. Box 513             
San Francisco, California 94111         Burlingame, California 94011            

Re:      Merger pursuant to the Agreement and Plan of Merger and  Reorganization
         (the "Reorganization Agreement") dated May __, 1999, among ORGANIC FOOD
         PRODUCTS,  INC., a  California  corporation  ("Acquiror")  and SPECTRUM
         NATURALS,  INC.,  a California  corporation  (the  "Company"),  and the
         related  Agreement  of Merger  between  Acquiror  and the Company  (the
"Certificate of Merger").                                     

Ladies and Gentlemen:                                                           

This letter is supplied to you in  connection  with your  rendering  of opinions
regarding  certain  federal  income  tax  consequences  of  the  Merger.  Unless
otherwise indicated,  capitalized terms not defined herein have the meanings set
forth in the  Reorganization  Agreement.  The  Reorganization  Agreement and the
Certificate of Merger,  including exhibits and schedules  attached thereto,  are
collectively referred to as the "Agreements."                                   

After  consulting  with its counsel and  auditors  regarding  the meaning of and
factual  support  for the  following  representations,  the  undersigned  hereby
certifies and represents that the following facts are now true and will continue
to be true as of the Effective Time of the Merger and thereafter where relevant:

     1.  Other  than in the  ordinary  course of  business  or  pursuant  to its
obligations under the Agreements, the Company has made no transfer of any of its
assets  (including any  distribution of assets with respect to, or in redemption
of,  stock) in  contemplation  of the Merger or during the period  ending on the
Effective Time of the Merger and beginning with the commencement of negotiations
(whether formal or informal) with Acquiror regarding the Merger (the "Pre-Merger
Period");                                                                       

     2. The Company's principal reasons for participating in the Merger are bona
fide business purposes unrelated to taxes;                                      

     3.  At  the  Effective  Time  of the  Merger,  the  Company  will  have  no
outstanding  equity  interests  other than those disclosed in Section 2.3 of the
Reorganization  Agreement. At the time of the Merger, except as specified in the
Reorganization  Agreement,  the  Company  will  have  no  outstanding  warrants,
options,  or  convertible  securities  or any  other  type of right  outstanding
pursuant  to which any  person  could  acquire  shares of  capital  stock of the
Company or any other equity interest in the Company,  other than those disclosed
in Section 2.3 of the Reorganization  Agreement or the Disclosure  Schedule with
respect thereto;                                                                

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     4. The total fair market  value of all  consideration  other than shares of
Acquiror  Common  Stock  received by  shareholders  of the Company in the Merger
(including, without limitation, cash paid to the Company shareholders perfecting
dissenter's  rights or in lieu of  fractional  shares of Acquiror  Common Stock)
will be less than ten percent (10%) of the aggregate fair market value of shares
of stock of the Company outstanding immediately prior to the Merger;            

     5. The Company intends that Acquiror shall continue the Company's  historic
business  or use a  significant  portion of its  historic  business  assets in a
business following the Merger;                                                  

     6. The  liabilities of the Company have been incurred by the Company in the
ordinary course of its business;                                                

     7. The fair market value of the  Company's  assets will,  on the  Effective
Time of the Merger,  exceed the  aggregate  liabilities  of the Company plus the
amount of liabilities, if any, to which such assets are subject;                

     8. The Company is not and will not be on the  Effective  Time of the Merger
an "investment company" within the meaning of Section 368(a)(2)(F)(iii) and (iv)
of the Code;                                                                    

     9. The Company is not and will not be on the  Effective  Time of the Merger
under the  jurisdiction  of a court in a Title 11 or  similar  case  within  the
meaning  of  Section  368(a)(3)(A)  of the Code;                                

     10. The Company has made no extraordinary  distributions within the meaning
of Temporary Federal Treasury Regulation Section 1.368-1T(e) with respect to its
stock,  prior to and in  connection  with the  Merger;                          

     11. The Company has not  redeemed  and no "related  person" with respect to
the  Company,   as  such  term  is  defined  by  Treasury   Regulation   Section
1.368-1(e)(3),  (without regard to Section  1.368-1(e)(3)(i)(A)),  has purchased
any capital stock of the Company prior to and in connection with the Merger;    

     12. The fair market value of the shares of Acquiror  Common Stock and other
consideration  received by each shareholder of the Company will be approximately
equal to the fair market value of the shares of stock of the Company surrendered
in exchange therefor and the aggregate consideration received by shareholders of
the  Company  in  exchange  for  their  shares of stock of the  Company  will be
approximately equal to the fair market value of all of the outstanding shares of
stock of the Company immediately prior to the Merger;                           

     13. Each of Acquiror,  the Company and each shareholder of the Company will
pay separately his, hers or its own expenses relating to the Merger;            

     14. There is no intercorporate  indebtedness  existing between Acquiror and
the  Company  that was issued,  acquired,  or will be settled at a discount as a
result of the Merger;  Acquiror will assume no liabilities of any shareholder of
the Company in connection with the Merger;                                      

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     15.  The terms of the  Reorganization  Agreement  and the other  agreements
relating thereto are the product of arm's length negotiations;                  

     16. None of the compensation received by any  shareholder-employees  of the
Company will be separate consideration for, or allocable to, any of their shares
of stock of the Company; none of the shares of Acquiror Common Stock received by
any  shareholder-employees of the Company will be separate consideration for, or
allocable to, any employment  agreement or any covenants not to compete; and the
compensation  paid  to any  shareholder-employees  of the  Company  will  be for
services  actually  rendered and will be commensurate with amounts paid to third
parties bargaining at arm's length for similar services;                        

     17. With respect to each instance,  if any, in which shares of stock of the
Company  have been  purchased  by a  shareholder  of Acquiror (a  "Shareholder")
during the Pre-Merger period (a "Stock Purchase"):  (i) to the best knowledge of
the  Company,  (A) the Stock  Purchase was made by such  Shareholder  on its own
behalf,  rather than as a representative,  or for the benefit, of Acquiror,  (B)
the Stock Purchase was entered into solely to satisfy the separate  interests of
such  Shareholder  and  the  seller,  and (C) the  purchase  price  paid by such
Shareholder  pursuant  to the Stock  Purchase  was the  product of arm's  length
negotiations; and (ii) the Stock Purchase was not a formal or informal condition
to consummation of the Merger; and                                              

     18. The Company is authorized to make all of the  representations set forth
herein.                                                                         

The  undersigned  recognizes  that  (i)  your  opinions  will  be  based  on the
representations  set  forth  herein  and  on  the  statements  contained  in the
Agreements and documents related thereto, and (ii) your opinions will be subject
to certain limitations and qualifications  including that they may not be relied
upon if any such representations are not accurate in all material respects.     

The  undersigned  recognizes  that  your  opinions  will  not  address  any  tax
consequences of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.                                           

                             Very truly yours,

                                   SPECTRUM NATURALS, INC.
                                    a California corporation

               By:
                                                  ------------------------------

                         Printed Name:
                                                           ---------------------

                  Title:
                                                   ---------------------------
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EXHIBIT G 

 FORM OF
ACQUIROR TAX REPRESENTATION LETTER

                                                                    May __, 1999

Cooley Godward LLP                       Carr, McClellan, Ingersoll, Thompson   
One Maritime Plaza                       & Horn, P.C.                           
20th Floor                               216 Park Road, P.O. Box 513            
San Francisco, California 94111          Burlingame, California 94011           

Re:      Merger pursuant to the Agreement and Plan of Merger and  Reorganization
         (the "Reorganization Agreement") dated May __, 1999, among ORGANIC FOOD
         PRODUCTS,  INC., a  California  corporation  ("Acquiror")  and SPECTRUM
         NATURALS,  INC.,  a California  corporation  (the  "Company"),  and the
         related  Agreement  of Merger  between  Acquiror  and the Company  (the
"Certificate of Merger").                                     

Ladies and Gentlemen:                                                           

This letter is supplied to you in  connection  with your  rendering  of opinions
regarding  certain  federal  income  tax  consequences  of  the  Merger.  Unless
otherwise indicated,  capitalized terms not defined herein have the meanings set
forth in the  Reorganization  Agreement.  The  Reorganization  Agreement and the
Certificate of Merger,  including exhibits and schedules  attached thereto,  are
collectively referred to as the "Agreements."                                   

After  consulting  with its counsel and  auditors  regarding  the meaning of and
factual  support  for the  following  representations,  the  undersigned  hereby
certifies and represents that the following facts are now true and will continue
to be true as of the Effective Time of the Merger and thereafter where relevant:

     1. Acquiror's  principal  reasons for  participating in the Merger are bona
fide business purposes not related to taxes;                                    

     2. Except for  transfers  described  in Section  368(a)(2)(C)  of the Code,
Acquiror has no plan or intention to sell,  distribute  or otherwise  dispose of
any of the  assets  acquired  from the  Company in the  transaction,  except for
dispositions made in the ordinary course of business;                           

     3.  Acquiror  intends  that,  following  the Merger,  it will  continue the
Company's  historic  business  or use a  significant  portion  of  its  historic
business assets in a business;                                                  

     4. Acquiror is not an  "investment  company"  within the meaning of Section
368(a)(2)(F)(iii) and (iv) of the Code;                                         

     5. No  shareholder  of the  Company  is  acting as agent  for  Acquiror  in
connection with the Merger or the approval thereof;  Acquiror will not reimburse
any shareholder of the Company for any stock of the Company such shareholder may
have purchased or for other obligations such shareholder may have incurred;     

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     6. Except for  repurchases or redemptions of Acquiror Common Stock that are
consistent  with past practices and pursuant to pre-existing  purchase  programs
that were not  created  or  modified  in  connection  with the  Merger,  neither
Acquiror  nor any  "related  person"  of  Acquiror  (as such term is  defined by
Treasury Regulation Section  1.368-1(e)(3)) will repurchase or redeem any of the
Acquiror  Common  Stock to be  issued  to the  shareholders  of the  Company  in
connection with the Merger;                                                     

     7.  During  the past  five (5)  years,  none of the  outstanding  shares of
capital  stock of the Company,  including  the right to acquire or vote any such
shares have,  directly or  indirectly,  been owned by Acquiror or  affiliates of
Acquiror;                                                                       

     8. The total fair market  value of all  consideration  other than  Acquiror
Common Stock received by shareholders  of the Company in the Merger  (including,
without  limitation,  cash  paid  to  shareholders  of  the  Company  perfecting
dissenter's  rights or in lieu of  fractional  shares of Acquiror  Common Stock)
will be less than ten percent (10%) of the aggregate  fair market value of stock
of the Company  outstanding  immediately prior to the Merger;                   

     9.  The  fair  market  value  of  the  Acquiror   Common  Stock  and  other
consideration  received by each shareholder of the Company will be approximately
equal to the fair  market  value of the  stock  of the  Company  surrendered  in
exchange therefor,  and the aggregate  consideration received by shareholders of
the Company in exchange  for their  stock of the Company  will be  approximately
equal to the fair market value of all of the outstanding  shares of stock of the
Company immediately prior to the Merger;                                        

     10. Each of Acquiror,  the Company and each shareholder of the Company will
pay separately his, hers or its own expenses relating to the Merger;            

     11. There is no intercorporate  indebtedness  existing between Acquiror and
the  Company  that was  issued,  acquired  or will be settled at a discount as a
result of the Merger, and Acquiror will assume no liabilities of any shareholder
of the Company in connection with the Merger;                                   

     12. The terms of the  Reorganization  Agreement and the agreements  related
thereto are the product of arm's length negotiations;                           

     13. None of the compensation  received by any  shareholder-employee  of the
Company will be separate consideration for, or allocable to, any of their shares
of stock of the Company; none of the shares of Acquiror Common Stock received by
any  shareholder-employee  of the Company will be separate consideration for, or
allocable to, any employment  agreement or any covenants not to compete; and the
compensation  paid  to any  shareholder-employee  of  the  Company  will  be for
services  actually  rendered and will be commensurate with amounts paid to third
parties bargaining at arm's length for similar services;                        

     14. With respect to each instance,  if any, in which shares of stock of the
Company  have been  purchased  by a  shareholder  of Acquiror (a  "Shareholder")
during the period ending on the Effective  Time of the Merger and beginning with

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the  commencement  of  negotiations  (whether  formal or informal) with Acquiror
regarding the Merger) (a "Stock  Purchase"):  (i) the Stock Purchase was made by
such  Shareholder not as a representative  of Acquiror;  (ii) the purchase price
paid by such Shareholder pursuant to the Stock Purchase was the product of arm's
length  negotiations,  was not  advanced,  and  will not be  reimbursed,  either
directly or indirectly,  by Acquiror;  (iii) at no time was such  Shareholder or
any other party required or obligated to surrender to Acquiror the capital stock
of the Company acquired in the Stock Purchase,  and neither such Shareholder nor
any other party will be required to surrender  to Acquiror  the Acquiror  Common
Stock for which such shares of stock of the  Company  will be  exchanged  in the
Merger;  and (iv) the Stock  Purchase was not a formal or informal  condition to
consummation  of the Merger;  and                                               

     15.  Acquiror is  authorized to make all of the  representations  set forth
herein.  The undersigned  recognizes that (i) your opinions will be based on the
representations  set  forth  herein  and  on  the  statements  contained  in the
Agreements and documents related thereto, and (ii) your opinions will be subject
to certain limitations and qualifications  including that they may not be relied
upon if any such representations are not accurate in all material respects.     

The  undersigned   recognize  that  your  opinions  will  not  address  any  tax
consequences of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.                                           

               Very truly yours,

                          ORGANIC FOOD PRODUCTS, INC.,
                      a California corporation

 By:
                                           -------------------------------------

           Printed Name:
                                                    ----------------------------

    Title:
                                              ----------------------------------

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 EXHIBIT H

OPINION OF COMPANY COUNSEL

1. Spectrum  Naturals,  Inc. (the "Company") has been duly  incorporated  and is
validly  existing as a corporation  in good standing under the laws of the State
of California.                                                                  

2. The Company has the requisite  corporate power to own,  operate and lease its
property  and  assets and to  conduct  its  business  as it is  currently  being
conducted.  To our knowledge,  the Company is qualified as a foreign corporation
to do business and is in good standing in each jurisdiction in the United States
in which the  ownership of its property or the conduct of its business  requires
such  qualification  except where the failure to so qualify would not materially
and adversely affect the Company's business,  financial condition and results of
operations, taken as a whole.                                                   

3. All corporate  action on the part of the Company,  its Board of Directors and
its shareholders necessary for the authorization,  execution and delivery of the
Merger Agreement by the Company and the performance of the Company's obligations
under the Merger  Agreement has been taken.  The Merger  Agreement has been duly
and validly  authorized,  executed and delivered by the Company and  constitutes
the valid and binding agreement of the Company  enforceable  against the Company
in accordance with its terms, except as rights to indemnity under section 9.5 of
the Merger  Agreement may be limited by applicable law and except as enforcement
may  be   limited  by   applicable   bankruptcy,   insolvency,   reorganization,
arrangement,  moratorium or other similar laws affecting  creditors' rights, and
subject to general  equity  principles and to  limitations  on  availability  of
equitable relief, including specific performance.                               

4. The authorized capital stock of the Company consists of (i) 100,000 shares of
Common Stock, no par value,  of which _________  shares have been issued and are
outstanding  immediately  prior to the  Closing,  (ii)  _____________  shares of
Preferred Stock, no par value,  none of which are outstanding  immediately prior
to the Closing.  To our  knowledge,  except as expressly set forth in the Merger
Agreement  (including the Company  Disclosure  Schedule),  there are no options,
warrants,  conversion  privileges,  or other  rights  presently  outstanding  to
purchase any  authorized but unissued  capital stock of the Company.  Except for
______________,  there are no  voting  agreements,  co-sale  rights or rights of
first refusal applicable to any of the Company's outstanding capital stock under
the Company's Articles of Incorporation, Bylaws or any Material Company Contract
disclosed in Part 2.9 and Part 2.11(a) of the Company Disclosure Schedule.      

5.  The  execution,  delivery  and  performance  by the  Company  of the  Merger
Agreement and the  consummation by the Company of the Merger as provided therein
will not violate any provision of the  Company's  Articles of  Incorporation  or
Bylaws,  and do not constitute a material  default (or give rise to any right of
termination,  cancellation or acceleration)  under any provision of any Material
Company  Contract  disclosed  in  Part  2.9  and  Part  2.11(a)  of the  Company
Disclosure  Schedule and do not violate or contravene (A) to our knowledge,  any
governmental  statute,  rule or regulation  applicable to the Company or (B) any

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order, writ, judgment, injunction, decree, determination or award which has been
entered  against  the  Company  and of  which we are  aware,  the  violation  or
contravention  of which would have a material  adverse  effect on the  Company's
business, financial condition and results of operations, taken as a whole.      

6. To our knowledge,  there is no action, proceeding or investigation pending or
threatened  in writing  against the Company  before any court or  administrative
agency that questions the validity of the Merger  Agreement or might result in a
material  adverse  change in the  Company's  business,  financial  condition and
results of operations, taken as a whole.                                        

7.  All  consents,  approvals,   authorizations,  or  orders  of,  and  filings,
registrations,  and qualifications with any regulatory authority or governmental
body in the  United  States  required  to be  obtained  prior to the  Closing in
connection with the Company's execution,  delivery and performance of the Merger
Agreement  and the  consummation  by the  Company of the Merger as  contemplated
therein have been made or obtained,  other than the filing of the Certificate of
Merger with the Secretary of State of the State of California as contemplated by
Section 1.3 of the Merger Agreement.                                            

8. The Merger  Agreement  has been duly  authorized  by the  Company's  Board of
Directors and its shareholders and, assuming  compliance by the Company with all
requirements of applicable law and the Merger Agreement  necessary to effect the
Merger,  upon filing of the  Certificate  of Merger with and  acceptance  by the
Secretary of State of the State of California, the Merger will be effective.    

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EXHIBIT I 

COOLEY GODWARD LLP                                                              

____________, 1999                                                              

Spectrum Naturals, Inc.                                                         
133 Copeland Street                                                             
Petaluma, California 94951                                                      

Ladies and Gentlemen:                                                           

This opinion is being  delivered to you pursuant to Section 7.8 of the Agreement
and  Plan of  Merger  and  Reorganization  dated  as of  _________  , 1999  (the
"Reorganization  Agreement")  by and between  Organic  Food  Products,  Inc.,  a
California corporation  ("Acquiror"),  and Spectrum Naturals, Inc., a California
corporation (the "Company").                                                    

Except as  otherwise  provided,  capitalized  terms used but not defined  herein
shall have the meanings set forth in the Reorganization  Agreement.  All section
references,  unless  otherwise  indicated,  are to the Internal  Revenue Code of
1986, as amended (the "Code").                                                  

We have acted as counsel to the Company in connection with the Merger.  As such,
and for the purpose of rendering this opinion, we have examined, and are relying
upon (without any  independent  investigation  or review  thereof) the truth and
accuracy, at all relevant times, of the statements,  covenants,  representations
and warranties  contained in the following documents (including all exhibits and
schedules attached thereto):                                                    

(a) the Reorganization Agreement;                                     

     (b) those certain tax  representation  letters dated  __________,  1999 and
delivered to us by Acquiror and the Company containing  certain  representations
of Acquiror and the Company (the "Tax Representation Letters"); and             

     (c)  such  other  instruments  and  documents  related  to  the  formation,
organization  and  operation  of  Acquiror  and the  Company  and related to the
consummation  of the  Merger  and the  other  transactions  contemplated  by the
Reorganization Agreement as we have deemed necessary or appropriate.            

In  connection  with  rendering  this  opinion,  we have  assumed  (without  any
independent investigation or review thereof) that:                              

     (a) Original documents  submitted to us (including  signatures thereto) are
authentic,  documents  submitted  to  us  as  copies  conform  to  the  original
documents,  and that all such  documents  have been (or will be by the Effective
Time) duly and validly  executed and delivered  where due execution and delivery
are a prerequisite to the effectiveness thereof;                                

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COOLEY GODWARD LLP                                                              

Spectrum Naturals, Inc.                                                         

-------------- , 1999                                                         
Page Two                                                                        

     (b) All  representations,  warranties and  statements  made or agreed to by
Acquiror and the Company, their managements,  employees, officers, directors and
shareholders in connection with the Merger, including, but not limited to, those
set forth in the Reorganization  Agreement  (including the exhibits thereto) and
the Tax Representation Letters are true and accurate at all relevant times;     

     (c) All  covenants  contained in the  Reorganization  Agreement  (including
exhibits  thereto)  and the Tax  Representation  Letters are  performed  without
waiver or breach of any material provision thereof;                             

     (d) The  Merger  will be  reported  by  Acquiror  and the  Company on their
respective  federal income tax returns in a manner  consistent  with the opinion
set forth below;                                                                

     (e) Any  representation  or statement  made "to the best of  knowledge"  or
similarly qualified is correct without such qualification; and                  

     (f) The  opinion  dated  __________,  1999  rendered  by  Carr,  McClellan,
Ingersoll,  Thompson & Horn, P.C. to Acquiror with respect to the  qualification
of the Merger as a reorganization  within the meaning of Section 368 of the Code
has been delivered and has not been withdrawn.                                  

Based on our examination of the foregoing items and subject to the  limitations,
qualifications,  assumptions and caveats set forth herein, we are of the opinion
that,  for federal  income tax  purposes,  the Merger  will be a  reorganization
within the meaning of Section 368 of the Code.                                  

This  opinion  does  not  address  the  various  state,  local  or  foreign  tax
consequences  that  may  result  from  the  Merger  or  the  other  transactions
contemplated  by the  Reorganization  Agreement.  In  addition,  no  opinion  is
expressed as to any federal  income tax  consequence  of the Merger or the other
transactions contemplated by the Reorganization Agreement except as specifically
set forth herein, and this opinion may not be relied upon except with respect to
the consequences  specifically  discussed  herein. No opinion is expressed as to
the federal income tax treatment  that may be relevant to a particular  investor
in light of personal  circumstances or to certain types of investors  subject to
special treatment under the federal income tax laws (for example, life insurance
companies,  dealers in securities,  taxpayers subject to the alternative minimum
tax,  banks,   tax-exempt   organizations,   non-United   States  persons,   and
shareholders  who acquired their shares of Company capital stock pursuant to the
exercise  of options or  otherwise  as  compensation  or who hold their  Company
capital stock as part of a straddle or risk reduction transaction).             

No opinion is expressed as to any transaction other than the Merger as described
in the Reorganization Agreement, or as to any transaction whatsoever,  including
the Merger, if all of the transactions described in the Reorganization Agreement
are not consummated in accordance with the terms of the Reorganization Agreement

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COOLEY GODWARD LLP                                                              

Spectrum Naturals, Inc.                                                         

-------------- , 1999                                                         
Page Three                                                                      

and without waiver of any material provision thereof.  To the extent that any of
the  representations,  warranties,  statements and  assumptions  material to our
opinion  and upon which we have  relied are not  accurate  and  complete  in all
material respects at all relevant times, our opinion would be adversely affected
and should not be relied upon.                                                  

This  opinion only  represents  our best  judgment as to the federal  income tax
consequences of the Merger and is not binding on the Internal Revenue Service or
any court of law,  tribunal,  administrative  agency or other governmental body.
The  conclusions   are  based  on  the  Code,   existing   judicial   decisions,
administrative regulations and published rulings. No assurance can be given that
future legislative,  judicial or administrative changes or interpretations would
not  adversely   affect  the  accuracy  of  the   conclusions   stated   herein.
Nevertheless,  by rendering  this  opinion,  we undertake no  responsibility  to
advise you of any new developments in the application or  interpretation  of the
federal income tax laws.                                                        

This opinion is being delivered pursuant to the Reorganization  Agreement. It is
intended  solely for the  benefit of the  Company  and may not be relied upon or
utilized  for any  other  purpose  or by any  other  person  and may not be made
available to any other person without our prior written consent.                

Sincerely,                                                                      

Cooley Godward LLP                                                              

Susan Cooper Philpot                                                            

SCP:dp                                                                          

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 EXHIBIT J

 OPINION OF OFPI COUNSEL

1. Organic  Food  Products,  Inc.  ("OFPI")  has been duly  incorporated  and is
validly  existing as a corporation  in good standing under the laws of the State
of California.                                                                  

2. OFPI has the requisite corporate power to own, operate and lease its property
and assets and to conduct its business as it is currently  being  conducted.  To
our knowledge,  OFPI is qualified as a foreign corporation to do business and is
in good  standing  in each  jurisdiction  in the  United  States  in  which  the
ownership  of  its  property  or  the  conduct  of its  business  requires  such
qualification  except where the failure to so qualify would not  materially  and
adversely affect OFPI's business, financial condition and results of operations,
taken as a whole.                                                               

3. All  corporate  action on the part of OFPI,  its Board of  Directors  and its
shareholders  necessary  for the  authorization,  execution  and delivery of the
Merger  Agreement by OFPI and the  performance of OFPI's  obligations  under the
Merger  Agreement has been taken. The Merger Agreement has been duly and validly
authorized, executed and delivered by OFPI and constitutes the valid and binding
agreement of OFPI enforceable  against OFPI in accordance with its terms, except
as rights to indemnity under section 9.4 of the Merger  Agreement may be limited
by  applicable  law and  except as  enforcement  may be  limited  by  applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar
laws affecting  creditors'  rights, and subject to general equity principles and
to  limitations  on  availability  of  equitable  relief,   including   specific
performance.                                                                    

4. The  authorized  capital  stock of OFPI  consists  of (i)  __________________
shares of Common Stock, no par value, of which _________ shares have been issued
and are outstanding  immediately prior to the Closing,  (ii) 5,000,000 shares of
Preferred Stock, no par value,  none of which are outstanding  immediately prior
to the Closing.  To our  knowledge,  except as expressly set forth in the Merger
Agreement  (including  the OFPI  Disclosure  Schedule),  there  are no  options,
warrants,  conversion  privileges,  or other  rights  presently  outstanding  to
purchase  any  authorized  but  unissued  capital  stock  of  OFPI.  Except  for
______________,  there are no  voting  agreements,  co-sale  rights or rights of
first refusal applicable to any of OFPI's outstanding capital stock under OFPI's
Articles of  Incorporation,  Bylaws or any Material OFPI  Contract  disclosed in
Part 3.9(b) and Part 3.11(a) of the OFPI Disclosure Schedule.                   

5. The execution,  delivery and performance by OFPI of the Merger  Agreement and
the  consummation by OFPI of the Merger as provided therein will not violate any
provision of OFPI's Articles of Incorporation or Bylaws, and do not constitute a
material  default  (or give rise to any right of  termination,  cancellation  or
acceleration)  under any provision of any Material  OFPI  Contract  disclosed in
Part 3.9(b) and Part 3.11(a) of the OFPI Disclosure  Schedule and do not violate
or contravene (A) to our knowledge, any governmental statute, rule or regulation
applicable  to  OFPI or (B)  any  order,  writ,  judgment,  injunction,  decree,
determination  or award which has been entered  against OFPI and of which we are
aware,  the violation or  contravention  of which would have a material  adverse
effect on OFPI's business,  financial condition and results of operations, taken
as a whole.                                                                     

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6. To our knowledge,  there is no action, proceeding or investigation pending or
threatened  in writing  against OFPI before any court or  administrative  agency
that  questions  the  validity  of the  Merger  Agreement  or might  result in a
material adverse change in OFPI's business,  financial  condition and results of
operations,  taken as a whole.                                                  

7.  All  consents,  approvals,   authorizations,  or  orders  of,  and  filings,
registrations,  and qualifications with any regulatory authority or governmental
body in the  United  States  required  to be  obtained  prior to the  Closing in
connection  with  OFPI's  execution,  delivery  and  performance  of the  Merger
Agreement and the  consummation  by OFPI of the Merger as  contemplated  therein
have been made or obtained,  other than the filing of the  Certificate of Merger
with the  Secretary  of State of the  State of  California  as  contemplated  by
Section 1.3 of the Merger Agreement.                                            

8. The Merger  Agreement  has been duly  authorized by OFPI's Board of Directors
and its shareholders and,  assuming  compliance by OFPI with all requirements of
applicable  law and the Merger  Agreement  necessary to effect the Merger,  upon
filing of the  Certificate  of Merger with and  acceptance  by the  Secretary of
State of the State of California, the Merger will be effective.                 

2 

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EXHIBIT K 

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 EXHIBIT L

 RESIGNATIONS OF CERTAIN DIRECTORS

Ken Steel                                                     

Chas Bonner                                                   

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 EXHIBIT M

 CERTAIN PERSONS SUBJECT TO LOCK-UP RESTRICTIONS

Jethren Phillips                                              

Neil Blomquist                                                

John Battendieri                                              

Joseph Stern                                                  

Dean Nicholson                                                

Steven Reedy                                                  

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                                                                         ANNEX C

 CORPORATIONS CODE

ss. 1300 TO ss. 1304 (CA DISSENTER'S RIGHTS)

ss.  1300.  Right to Require  Purchase -  "Dissenting  Shares"  and  "Dissenting
Shareholder" Defined.                                                           

     (a)  If  the  approval  of  the  outstanding  shares  (Section  152)  of  a
corporation is required for a reorganization  under  subdivisions (a) and (b) or
subdivision  (e) or (f) of Section 1201,  each  shareholder  of the  corporation
entitled  to  vote on the  transaction  and  each  shareholder  of a  subsidiary
corporation in a short-form merger may, by complying with this chapter,  require
the  corporation in which the  shareholder  holds shares to purchase for cash at
their fair market value the shares owned by the shareholder which are dissenting
shares as defined in subdivision  (b). The fair market value shall be determined
as of the day  before  the  first  announcement  of the  terms  of the  proposed
reorganization or short-form merger,  excluding any appreciation or depreciation
in consequence of the proposed action, but adjusted for any stock split, reverse
stock split or share dividend which becomes effective thereafter.               

     (b) As used in this  chapter,  "dissenting  shares" means shares which come
within all of the following descriptions:                                       

          (1)  Which  were  not  immediately  prior  to  the  reorganization  or
short-form  merger  either  (A)  listed  on  any  national  securities  exchange
certified by the Commissioner of Corporations  under  subdivision (o) of Section
25100 or (B)  listed  on the list of OTC  margin  stocks  issued by the Board of
Governors  of  the  Federal  Reserve  System,  and  the  notice  of  meeting  of
shareholders to act upon the reorganization summarizes this section and Sections
1301, 1302, 1303 and 1304; provided, however, that this provision does not apply
to any shares with  respect to which there  exists any  restriction  on transfer
imposed by the corporation or by any law or regulation;  and provided,  further,
that  this  provision  does  not  apply  to any  class of  shares  described  in
subparagraph  (A) or (B) if demands  for  payment  are filed  with  respect to 5
percent or more of the outstanding shares of that class.                        

          (2)  Which  were  outstanding  on the  date for the  determination  of
shareholders  entitled to vote on the  reorganization  and (A) were not voted in
favor of the  reorganization  or, (B) if described in subparagraph (A) or (B) of
paragraph  (1) (without  regard to the provisos in that  paragraph),  were voted
against the  reorganization,  or which were held of record on the effective date
of a short-form  merger;  provided,  however,  that subparagraph (A) rather than
subparagraph  (B) of this  paragraph  applies  in any case  where  the  approval
required by Section 1201 is sought by written consent rather than at a meeting. 

          (3) Which the dissenting shareholder has demanded that the corporation
purchase at their fair market value, in accordance with Section 1301.           

          (4) Which the dissenting shareholder has submitted for endorsement, in
accordance with Section 1302.                                                   

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     (c)  As  used  in  this  chapter,   "dissenting   shareholder"   means  the
recordholder  of dissenting  shares and includes a transferee of record.  Leg.H.
1975 ch. 682, 1976 ch. 641,  effective  January 1, 1977, 1982 ch. 36,  effective
February 17, 1982, 1990 ch. 1018, 1993 ch. 543.                                 

     1993 Notes:  Nothing in this act shall be  construed to modify or alter the
prohibition  contained in Sections 15503 and 15616 of the  Corporations  Code or
Section 1648 of the Insurance  Code, or modify or alter any similar  prohibition
relating to the operation of a business in limited partnership form. Stats. 1993
ch. 543 ss. 24.                                                                 

     Nothing  in this act shall be  construed  to modify or impair any rights of
limited partners under the  Thompson-Killea  Limited Partners  Protection Act of
1992 (Chapter 1183 of the Statutes of 1992). Stats. 1993 ch. 543 ss. 25.        

     Ref.:  Ballantine  &  Sterling,  Cal.  Corp.  Laws,  Ch.  12,  "Corporation
Acquisitions,  Mergers, and  Reorganizations";  Wood, Cal. Small Business Guide,
Ch. 35, "Tax-Free and Partially Tax- Free Mergers and Acquisitions."            

ss. 1301.  Demand for Purchase.                                                 

     (a) If, in the case of a reorganization,  any shareholders of a corporation
have a right under Section 1300,  subject to compliance  with paragraphs (3) and
(4) of  subdivision  (b) thereof,  to require the  corporation to purchase their
shares for cash, such  corporation  shall mail to each such shareholder a notice
of the approval of the  reorganization  by its outstanding  shares (Section 152)
within  10  days  after  the  date of such  approval,  accompanied  by a copy of
Sections  1300,  1302,  1303,  1304 and this  section,  a statement of the price
determined  by the  corporation  to  represent  the  fair  market  value  of the
dissenting  shares,  and a brief  description of the procedure to be followed if
the shareholder desires to exercise the shareholder's right under such sections.
The statement of price  constitutes  an offer by the  corporation to purchase at
the price stated any dissenting  shares as defined in subdivision (b) of Section
1300, unless they lose their status as dissenting shares under Section 1309.    

     (b) Any  shareholder who has a right to require the corporation to purchase
the shareholder's shares for cash under Section 1300, subject to compliance with
paragraphs  (3)  and  (4) of  subdivision  (b)  thereof,  and  who  desires  the
corporation  to  purchase  such  shares  shall  make  written  demand  upon  the
corporation  for the purchase of such shares and payment to the  shareholder  in
cash of their fair market  value.  The demand is not  effective  for any purpose
unless it is received by the  corporation  or any transfer  agent thereof (1) in
the  case  of  shares  described  in  clause  (i) or (ii)  or  paragraph  (1) of
subdivision  (b) of  Section  1300  (without  regard  to the  provisos  in  that
paragraph),  not later than the date of the  shareholders'  meeting to vote upon
the  reorganization,  or (2) in any other case  within 30 days after the date on
which  the  notice  of  the  approval  by the  outstanding  shares  pursuant  to
subdivision  (a) or the notice  pursuant to subdivision  (i) of Section 1110 was
mailed to the shareholder.                                                      

     (c) The demand  shall  state the  number  and class of the  shares  held of
record by the  shareholder  which the  shareholder  demands that the corporation
purchase and shall contain a statement of what such shareholder claims to be the
fair market value of those shares as of the day before the  announcement  of the

2.

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proposed reorganization or short-form merger. The statement of fair market value
constitutes an offer by the shareholder to sell the shares at such price. Leg.H.
1975 ch. 682, 1976 ch. 641, effective January 1, 1977, 1980 chs. 501, 1155.     

     Ref.:  Ballantine  &  Sterling,  Cal.  Corp.  Laws,  Ch.  12,  "Corporation
Acquisitions, Mergers, and Reorganizations."                                    

ss. 1302.  Endorsement of Shares.                                               

     Within  30 days  after  the date on which  notice  of the  approval  by the
outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the  shareholder,  the shareholder  shall submit to the corporation at
its principal office or at the office of any transfer agent thereof,  (a) if the
shares are certificated securities,  the shareholder's certificates representing
any shares which the shareholder  demands that the corporation  purchase,  to be
stamped or endorsed with a statement that the shares are dissenting shares or to
be exchanged for certificates of appropriate denomination so stamped or endorsed
or (b) if the shares are uncertificated securities, written notice of the number
of shares which the  shareholder  demands that the  corporation  purchase.  Upon
subsequent  transfers of the dissenting  shares on the books of the corporation,
the  new  certificates,   initial  transaction  statement,   and  other  written
statements  issued therefor shall bear a like statement,  together with the name
of the original dissenting holder of the shares.  Leg.H. 1975 ch. 682, effective
January 1, 1977, 1986 ch. 766.                                                  

ss. 1303.  Agreed Price - Time for Payment.                                     

     (a) If the  corporation  and the  shareholder  agree  that the  shares  are
dissenting  shares  and  agree  upon the  price of the  shares,  the  dissenting
shareholder  is entitled to the agreed price with interest  thereon at the legal
rate on judgments from the date of the agreement. Any agreements fixing the fair
market value of any dissenting shares as between the corporation and the holders
thereof shall be filed with the secretary of the corporation.                   

     (b) Subject to the  provisions of Section 1306,  payment of the fair market
value of dissenting shares shall be made within 30 days after the amount thereof
has been agreed or within 30 days after any statutory or contractual  conditions
to the  reorganization  are  satisfied,  whichever is later,  and in the case of
certificated  securities,  subject to  surrender of the  certificates  therefor,
unless provided  otherwise by agreement.  Leg.H. 1975 ch. 682, effective January
1, 1977, 1980 ch. 501, 1986 ch. 766.                                            

     Ref.:  Ballantine  &  Sterling,  Cal.  Corp.  Laws,  Ch.  12,  "Corporation
Acquisitions,  Mergers, and  Reorganizations";  Wood, Cal. Small Business Guide,
Ch. 35, "Tax-Free and Partially Tax-Free Mergers and Acquisitions."             

ss. 1304.  Dissenter's Action to Enforce Payment.                               

     (a) If the corporation denies that the shares are dissenting shares, or the
corporation and the shareholder  fail to agree upon the fair market value of the
shares,  then the  shareholder  demanding  purchase of such shares as dissenting
shares or any interested corporation,  within six months after the date on which
notice  of the  approval  by the  outstanding  shares  (Section  152) or  notice
pursuant to subdivision (i) of Section 1110 was mailed to the  shareholder,  but

3.

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not thereafter,  may file a complaint in the superior court of the proper county
praying the court to determine  whether the shares are dissenting  shares or the
fair  market  value of the  dissenting  shares or both or may  intervene  in any
action pending on such a complaint.                                             

     (b) Two or more dissenting shareholders may join as plaintiffs or be joined
as  defendants  in  any  such  action  and  two  or  more  such  actions  may be
consolidated.                                                                   

     (c) On the trial of the action,  the court shall  determine the issues.  If
the status of the shares as dissenting shares is in issue, the court shall first
determine that issue.  If the fair market value of the  dissenting  shares is in
issue,  the  court  shall  determine,  or shall  appoint  one or more  impartial
appraisers to determine,  the fair market value of the shares.  Leg.H.  1975 ch.
682, effective January 1, 1977.                                                 

     Ref.:  Ballantine  &  Sterling,  Cal.  Corp.  Laws,  Ch.  12,  "Corporation
Acquisitions,  Mergers, and  Reorganizations";  Wood, Cal. Small Business Guide,
Ch. 35, "                                                                       

4.

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                                                                         ANNEX D

AMENDED AND RESTATED

 ARTICLES OF INCORPORAITON

OF

 SPECTRUM ORGANIC PRODUCTS, INC.

JOHN BATTENDIERI and RICHARD BACIGALUPI certify that:                 

     1. They are the President and Secretary of Organic Food  Products,  Inc., a
California corporation.                                                         

     2. The  Articles  of  Incorporation  of this  corporation  are  amended and
restated to read as follows: 986900084I.                                        

The name of this corporation is Spectrum Organic Products, Inc.       

 II.

                  The purpose of this corporation is to engage in any lawful act
         or activity for which a corporation  may be organized under the General
         Corporation  Law of  California  other than the banking  business,  the
         trust company business or the practice of a profession  permitted to be
incorporated by the California Corporations Code.             

III.

                  (A) This  corporation  is  authorized  to issue two classes of
         shares,  to be  designated  common and  preferred,  respectively.  This
         corporation  is authorized to issue  60,000,000  shares of common stock
and 5,000,000 shares of preferred stock.                      

                  (B) The  preferred  stock may be divided  into such  number of
         series as the board of directors may determine.  The board of directors
         is  authorized   to  determine  and  alter  the  rights,   preferences,
         privileges  and  restrictions  granted  to or  imposed  upon any wholly
         unissued series of preferred  stock, and to fix the number of shares of
         any series of preferred stock and the designation of any such series of
         preferred  stock.  The  board  of  directors,  within  the  limits  and
         restrictions  stated in any  resolution or  resolutions of the board of
         directors  originally  fixing  the  number of shares  constituting  any
         series, may increase or decrease (but not below the number of shares of
         such  series  then  outstanding)  the  number of  shares of any  series
subsequent to the issue of shares of that series.             

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 IV.

                  The liability of the directors of the corporation for monetary
         damages  shall be eliminated to the fullest  extent  permissible  under
California law.                                               

V.

                  The  corporation is authorized to provide  indemnification  of
         agents (as defined in Section 317 of the California  Corporations Code)
         through bylaws provisions, agreements with agents, vote of shareholders
         or   disinterested   directors   or   otherwise,   in   excess  of  the
         indemnification  otherwise  permitted by Section 317 of the  California
         Corporations  Code,  subject only to the applicable limits set forth in
         Section 204 of the California Corporations Code with respect to actions
for breach of duty to the corporation and its shareholders.   

     3. The foregoing amended and restated  articles of incorporation  have been
duly approved by the board of directors.                                        

     4. The foregoing amended and restated  articles of incorporation  have been
duly approved by the required vote of  shareholders  in accordance  with Section
902 of the  Corporations  Code.  The total number of  outstanding  shares of the
corporation is __________. The number of shares voting in favor of the amendment
equaled or exceeded the vote  required.  The  percentage  vote required was more
than fifty percent (50%).                                                       

     We further  declare under penalty of perjury under the laws of the State of
California  that the matters set forth in this  certificate are true and correct
of our own knowledge.                                                           

Date: __________________, 1999                                        

                                               ---------------------------------

                                           __________________, President

                                               ---------------------------------

                                           __________________, Secretary

2.

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                                                                         ANNEX E

EXECUTIVE EMPLOYMENT AGREEMENT

     This   Employment    Agreement    ("Agreement")    is   entered   into   by
___________________,  an individual  ("Executive"),  and Organic Food  Products,
Inc., a California  corporation  ("Company").  This Agreement will be effective,
and Executive will become employed by Company, on ______________, 1999.         

Recitals

     WHEREAS,  Company engages in the business of producing  organic and natural
food products;                                                                  

     WHEREAS,  Executive  desires to become employed by Company as __________ of
its  __________  Division  on the terms and  conditions  set forth  herein,  and
Company desires to employ Executive on such terms and conditions;               

     NOW THEREFORE,  in consideration of the foregoing  recitals,  the terms and
conditions set forth herein, and other valuable  consideration,  the receipt and
adequacy of which are hereby acknowledged, the parties agree as follows:        

 AGREEMENT
 ---------

1. Employment by Company; Term of Employment.                                   

     1.1. Full Time and Best Efforts.  Subject to the terms and  conditions  set
          forth  in this  Agreement,  Company  agrees  to  employ  Executive  as
          _________ of its _________ Division, and Executive hereby accepts this
          employment. During his term of employment with Company, Executive will
          devote his full time and best efforts to performing  his duties and to
Company's business and affairs.                             

     1.2. Duties.  Executive  shall  serve in an  executive  capacity  and shall
          perform such duties as are consistent with his position as ___________
          of Company's ______________ Division and as may be reasonably required
          by  Company's  Board of  Directors  (the  "Board").  Such duties shall
          include,  without  limitation,   leading  and  coordinating  Company's
          efforts to develop and implement  strategic  and  operating  plans for
          Company (including,  without limitation, the production,  manufacture,
          marketing,  distribution,  and sale of  Company  products);  executing
          day-to-day  general  management of Company;  developing  relationships
          with new  distributors,  customers,  and  suppliers;  maintaining  and
          solidifying   relationships  with  Company's  existing   distributors,
          customers, and suppliers; and supporting the development and growth of
Company.                                                    

     1.3. Company  Policies.  The  employment  relationship  between the parties
          shall be governed by the general employment  policies and practices of
          Company,  including  but not limited to those  relating to  protecting
          confidential  information  and  assignment  of  inventions;  provided,
          however,  that when the terms of this Agreement  differ from or are in
          conflict with Company's general employment policies or practices, this
Agreement shall control.                                    

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     1.4. Term. The initial term of employment of Executive under this Agreement
          shall begin on the  effective  date of this  Agreement  and end on the
          third  anniversary  of that date (such  3-year  period is the "Initial
          Term"). The Initial Term, together with any extensions, is referred to
herein as the "Term".                                       

     1.5. Renewal. Unless Company or Executive has given the other party written
          notice at least 90 days before the end of the  Initial  Term that this
          Agreement shall not be renewed,  the term and other provisions of this
          Agreement shall be automatically  extended for a one-year period; this
      procedure shall be followed in each such successive yearly period.

2. Compensation and Benefits.                                                   

     2.1. Salary.  Executive shall receive for services  rendered an annual base
          salary of One Hundred Fifty Thousand Dollars  ($150,000.00) (the "Base
          Salary")  payable twice monthly,  subject to standard  withholding for
taxes, Social Security, and the like.                       

     2.2. Participation  in Benefit  Plans.  During the term of this  Agreement,
          Executive  shall be entitled to  participate  in any group  insurance,
          hospitalization,  medical, dental, health and accident, disability, or
          similar  plan or  program  of  Company  now  existing  or  established
          hereafter.  Company may, in its sole discretion and from time to time,
          establish  additional senior  management  benefit programs as it deems
          appropriate. Executive understands that any such plans may be modified
          or eliminated in Company's  discretion in accordance  with  applicable
law.                                                        

     2.3. Vacation.  Executive shall be entitled to annual paid vacation time of
          four weeks per year. The days selected for Executive's  vacation shall
be mutually agreeable to Company and Executive.             

     2.4. Car  Expense.  During the Term,  Company  shall  provide  Executive an
          automobile,  or shall lease a vehicle for Executive, and shall pay for
          all  gas,  oil,   maintenance  and  insurance   expenses   related  to
Executive's operation of such vehicle.                      

     2.5. Trade  Association  Dues.  Company  shall pay for all dues required by
          Executive  for  Executive's   membership  in  any  industry  or  trade
          associations,  professional  organizations or organizations reasonably
      related to the operation of Company or its operating subsidiaries.

2.

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3. Options and Bonus Plans.                                                     

     3.1. Options.  Concurrent with this Agreement,  Executive shall receive the
          right to  participate  in  Company  stock  option  plans on terms  and
          conditions then in effect for similar Company  executives,  such plans
to be in effect no later than December 31, 1999.            

     3.2. Bonuses.  Executive  shall be eligible  for an annual bonus in amounts
          determined in accordance  with  performance  objectives;  such amounts
          will be paid to  Executive  within 90 days  after the end of each such
          calendar year. For other calendar years during which this Agreement is
          in  effect,   Executive  shall  receive  bonuses  based  on  Company's
          performance  (as  measured by Company's  revenues and earnings  before
          interest  and taxes)  during  such  calendar  year,  the amount of the
          bonuses to be established in good faith by the Compensation  Committee
          of the Board of Directors before the start of each calendar year, each
          bonus to be paid to Executive  within 90 days  following that calendar
year.                                                       

     3.3. Retirement  Benefits.  Company shall  establish a 401(k) plan in which
Executive shall be entitled to participate fully.           

     3.4. Life Insurance.  Company shall provide a life insurance policy payable
          to the estate of Executive throughout the term of this Agreement in an
          amount  equal to or  greater  than two  years  of  Executive's  annual
salary.                                                     

4. Reasonable Business Expenses and Support.                                    

     Executive  shall be  reimbursed  for  documented  and  reasonable  business
expenses,  including  any  attendance  at trade shows,  in  connection  with the
performance of his duties under this Agreement and in accordance  with Company's
general policies on business expenses.  Executive shall be furnished  reasonable
office space, assistance, and facilities.                                       

5. Termination of Employment; Termination Date.                                 

     The date on which  Executive's  employment  by  Company  is  deemed to have
ceased,  as defined in the provisions  below, is referred to as the "Termination
Date".                                                                          

5.1. Termination for Cause.                                           

          a.   Termination;  Payment of Accrued  Salary and Vacation.  The Board
               may terminate Executive's employment with Company at any time for
               "cause"  (as defined  below),  immediately  on written  notice to
               Executive of the circumstances  leading to termination for cause.
               If Executive's employment is terminated under this paragraph (a),
               Executive shall receive payment for all accrued salary,  vacation
               time,  and benefits  under  Company's  benefit  plans through the
               Termination  Date, which for purposes of this paragraph (a) shall

3.

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               be the date on which notice of termination is given.  The Company
               shall have no further  obligation to pay any  compensation of any
               kind (including,  without  limitation,  any bonus or portion of a
               bonus that otherwise may have become due and payable to Executive
               with respect to the year in which such  Termination  Date occurs,
               which for purposes of this Agreement  shall be the date specified
               in Company's notice) or severance payment of any kind nor to make
               any payment in lieu of notice.  All benefits  provided by Company
               to Executive under this Agreement or otherwise shall cease on the
Termination Date.                                 

          b.   Definition of Cause. "Cause" means the occurrence or existence of
               any of the following with respect to Executive,  as determined by
               a majority of the  disinterested  directors of the Board: (1) any
               act of  misappropriation,  embezzlement,  intentional  fraud,  or
               similar conduct by Executive involving Company or its affiliates;
               or (2) the  conviction  or the  plea of  nolo  contendere  or the
          equivalent in respect of a felony involving moral turpitude.

     5.2. Voluntary   Termination.   Executive  may  voluntarily  terminate  his
          employment  with Company at any time on 90 days' prior written notice.
          If Executive  provides such notice,  Company,  at its discretion,  may
          accelerate the termination of Executive's employment to any date after
          its receipt of such notice from  Executive  and before the date of the
          termination specified in such notice from Executive.  Any acceleration
          of the  termination  of Executive's  employment  shall be effective on
          written  notice being  delivered to Executive by Company.  On any such
          acceleration  by  Company,  Executive  shall  not be  entitled  to any
          payment in lieu of notice.  If  Executive's  employment  is terminated
          under this  section  5.2,  Executive  shall  receive  payment  for all
          accrued salary,  vacation time, and benefits under  Company's  benefit
          plans through the Termination Date, which for purposes of this section
          5.2 shall be the date on which the 90 days referred to above  expires.
          Company shall also pay to Executive a prorated bonus based on the then
          applicable  bonus  plan in an  amount  equal to the bonus  that  would
          otherwise  be  paid  for  the  fiscal  year  in  which   Executive  is
          terminated,  multiplied  by a fraction,  the numerator of which is the
          number of days that  Executive was employed  during that year, and the
          denominator  of which is 365, it being  understood  that this prorated
          bonus  will be payable  in  accordance  with  Company's  normal  bonus
          payment  policy,  but in no event  later than 90 days after the end of
          the fiscal year in which  Executive's  employment is  terminated.  All
          benefits  provided by Company to  Executive  under this  Agreement  or
otherwise shall cease on the Termination Date.              

     5.3. Termination   on   Disability.   Company  may  terminate   Executive's
          employment if Executive  suffers a disability  that renders  Executive
          unable,  as  determined  in good  faith by the Board,  to perform  the
          essential   functions   of  the   position,   even   with   reasonable
          accommodation,  for four months in any 12-month period. If Executive's

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          employment  is  terminated  under this  section 5.3,  Executive  shall
          receive payment for all Base Salary, vacation time, and benefits under
          Company  benefit  plans  through the Term.  Company  shall also pay to
          Executive a prorated bonus based on the then applicable  bonus plan in
          an amount  equal to the bonus  that  would  otherwise  be paid for the
          fiscal  year  in  which  Executive  is  terminated,  multiplied  by  a
          fraction,  the numerator of which is the number of days that Executive
          was employed during that year, and the denominator of which is 365, it
          being   understood  that  this  prorated  bonus  will  be  payable  in
          accordance with Company's normal bonus payment policy, but in no event
          later  than  90  days  after  the  end of the  fiscal  year  in  which
          Executive's  employment is  terminated.  All benefits  provided  under
          section 2.2 shall be extended,  at Executive's  election and Company's
          expense,  to the extent permitted by Company's  insurance policies and
          benefit  plans,  for six months after  Executive's  Termination  Date,
          except as required by law (e.g.,  COBRA health insurance  continuation
election).                                                  

5.4. Termination Without Cause.                                       

          a.   Termination  Payment.  On 60 days' prior written notice,  Company
               may terminate  Executive without "cause" (as defined in paragraph
               (b) of section 5.1); provided, however, that Company reserves the
               right to terminate Executive's employment immediately and provide
               60 days'  pay in lieu of  notice  to  Executive.  If  Executive's
               employment is terminated under this section 5.3,  Executive shall
               receive payment for all Base Salary,  vacation time, and benefits
               under  Company  benefit  plans  for a twelve  (12)  month  period
               following  the  Termination  Date.  Company  shall  also  pay  to
               Executive  a prorated  bonus based on the then  applicable  bonus
               plan in an amount equal to the bonus that would otherwise be paid
               for the fiscal year in which Executive is terminated,  multiplied
               by a fraction,  the numerator of which is the number of days that
               Executive was employed  during that year, and the  denominator of
               which is 365, it being  understood  that this prorated bonus will
               be payable in  accordance  with  Company's  normal bonus  payment
               policy,  but in no event  later than 90 days after the end of the
               fiscal  year  in  which  Executive's  employment  is  terminated.
               Company  shall  provide  Executive  with  outplacement   services
               equivalent in value to 10% of the Base Salary or pay Executive an
equivalent amount in cash.                        

          b.   Other  Circumstances.  In the event of substantial  diminution in
               Executive's duties,  authority,  pay, or responsibilities without
               performance or market justification,  Executive may terminate his
               employment;  provided, however, that Executive shall give Company
               30 days' written notice before any such  termination,  specifying
               the  nature  of  the  circumstance   allegedly   justifying  such
               termination by Executive, and Company shall have until the end of
               such 30-day  period to cure such  circumstances  in all  material
               respects.  A termination in these  circumstances shall be treated
               as a Company  termination  without cause,  and Executive shall be

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               entitled to the  severance  payments and benefits as set forth in
               paragraph (a) above.  The  Termination  Date under this paragraph
               (b) shall be the day after the  30-day  cure  period  expires  if
               Company  fails  to  cure  those  circumstances  in  all  material
respects by the expiration of that cure period.   

          5.5. Termination  on Death.  If Executive dies before the term of this
               Agreement  expires,  Company shall pay to Executive's  estate all
               Base Salary,  vacation time, benefits under Company benefit plans
  and proceeds from Executive's life insurance policy.

6. Proprietary Information Obligations.                                         

     During the term of employment  under this  Agreement,  Executive  will have
access to and become  acquainted  with Company's  confidential  and  proprietary
information (collectively, "Proprietary Information"), including but not limited
to information or plans concerning Company's customer relationships;  personnel;
sales, marketing, and financial operations and methods; trade secrets; formulas;
devices;  secret inventions;  processes;  and other compilations of information,
records,  and  specifications.  Executive  shall not  disclose  any of Company's
proprietary  information  directly or indirectly,  or use it in any way,  either
during  the  term  of  this  Agreement  or at any  time  thereafter,  except  as
reasonably  necessary  in  the  course  of  his  employment  for  Company  or as
authorized   in   writing   by   Company.   All   files,   records,   documents,
computer-recorded   or   electronic   information,   drawings,   specifications,
equipment,  and similar items relating to Company business,  whether prepared by
Executive  or  otherwise  coming into his  possession,  shall  remain  Company's
exclusive  property  and shall not be removed from  Company  premises  under any
circumstances  whatsoever  without Company's prior written consent,  except when
(and only for the period)  necessary to carry out Executive's  duties hereunder,
and if removed  shall be  immediately  returned  to Company  on  termination  of
employment, and no copies shall be kept by Executive.                           

7. Noninterference.                                                             

     While employed by Company and for two years  thereafter,  Executive  agrees
not to (a) solicit or attempt to solicit, directly or indirectly,  any employee,
customer,  or supplier of Company;  or (b) take any other  action that may cause
any such employee,  customer,  or supplier to terminate or adversely  alter his,
her, or its relationship with Company.                                          

8. Noncompete.                                                                  

     Unless  terminated  without cause,  while employed by Company and for three
years thereafter, Executive agrees not to, directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate,  representative,
consultant,  or  in  any  capacity  whatsoever  engage  in,  become  financially
interested  in, be employed by or have any  business  connection  with any other
person,  corporation,  firm,  partnership or other entity  whatsoever which were
known to Executive to directly  compete with the Company,  throughout the world,
in any line of business engaged in (or planned to be engaged in) by the Company;
provided,   however,  that  anything  above  to  the  contrary  notwithstanding,
Executive  may  own,  as  a  passive  investor,  securities  of  any  competitor

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corporation,  so long as Executive's direct holdings in any one such corporation
shall not in the aggregate  constitute  more than 1% of the voting stock of such
corporation.                                                                    

9. Dispute Resolution and Mediation.                                            

     Executive  and  Company  agree  that,  if a dispute  arises  concerning  or
relating to Executive's  employment with Company, the dispute shall be submitted
to mediation. The mediation shall take place in Sonoma County, California, or in
the county where the Company's corporate headquarters is located.  Executive and
Company  agree that  mediation  will be the  initial  means of  redress  for any
disputes  relating  to or arising  from  Executive's  employment  with  Company,
including  disputes over rights  provided by federal,  state, or local statutes,
regulations,  ordinances,  and  common  law,  including  all laws that  prohibit
discrimination based on any protected classification, and that the parties agree
to negotiate and participate in mediation in good faith                         

10. Miscellaneous Provisions.                                                   

     10.1.Notices.  Any notices provided  hereunder must be in writing and shall
          be deemed  effective  on the earlier of personal  delivery  (including
          personal delivery by telecopy or telex) or the third day after mailing
        by first class mail to the recipient at the address indicated below:

To the Company:                                                                 

To Executive:                                                                   
---------------------                                                           

---------------------                                                           

---------------------                                                           

or to such  other  address  or to the  attention  of such  other  person  as the
recipient  party will have  specified  by prior  written  notice to the  sending
party.                                                                          

     10.2.Severability.  If any term,  provision,  or part of this  Agreement is
          found  by a court  to be  invalid,  illegal,  or  incapable  of  being
          enforced  by any  rule  of law or  public  policy,  all  other  terms,
          provisions,  and parts of this Agreement shall nevertheless  remain in
          full force and effect as long as the  economic or legal  substance  of
          the  transactions  contemplated  hereby is not  affected in any manner
          materially  adverse to any party. On such determination that any term,
          provision, or part of this Agreement is invalid, illegal, or incapable

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          of being enforced, this Agreement shall be deemed to be modified so as
          to effect the parties'  original  intent as closely as possible to the
          end that the transactions contemplated by this Agreement and the terms
          and provisions of this Agreement are fulfilled to the greatest  extent
possible.                                                   

     10.3.Entire Agreement.  This document constitutes the final,  complete, and
          exclusive embodiment of the entire agreement and understanding between
          the  parties  related  to the  subject  matter of this  Agreement  and
          supersedes and preempts any prior or  contemporaneous  understandings,
          agreements,  or representations by or between the parties,  written or
          oral.  Without  limiting the  generality of the  foregoing,  except as
          provided in this Agreement, all understandings and agreements, written
          or oral, relating to Executive's employment by Company, or the payment
          of any  compensation  or the  provision  of any benefit in  connection
          therewith  or  otherwise,  are  hereby  terminated  and shall be of no
future force and effect.                                    

     10.4.Counterparts.  This Agreement may be executed on separate copies,  any
          one of which need not contain  signatures of more than one party,  but
          all  of  which  taken  together  will  constitute  one  and  the  same
agreement.                                                  

     10.5.Successors  and Assigns.  This Agreement is intended to bind and inure
          to the benefit of and be  enforceable  by Executive  and Company,  and
          their respective successors and assigns, except that Executive may not
          assign  any of his  rights  or duties  under  this  Agreement  without
Company's prior written consent.                            

     10.6.Attorney  Fees.  If any legal  proceeding  is  necessary to enforce or
          interpret  the terms of this  Agreement,  or to  recover  damages  for
          breach of this  Agreement,  the prevailing  party shall be entitled to
          reasonable  attorney  fees,  as well as costs  and  disbursements,  in
          addition  to any other  relief to which  the  prevailing  party may be
entitled.                                                   

     10.7.Amendments.  No amendments or other  modifications  to this  Agreement
          may be made  except by a writing  signed by both  parties.  Except for
          Executive's  estate  under  section  5.5,  nothing in this  Agreement,
          express or  implied,  is  intended  to confer on any third  person any
rights or remedies under or because of this Agreement.      

     10.8.Choice of Law. All questions  concerning the  construction,  validity,
          and  interpretation of this Agreement will be governed by the internal
  law, and not the law of conflicts, of the State of California.

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     IN WITNESS  WHEREOF  AND WITH  INTENT TO BE BOUND,  the parties now execute
this Agreement,  to be effective on the date it is last executed below by either
party.                                                                          

Executive:                                                                      

_________________________________                Dated:  ________________, 1999 

Company:                                                                        

ORGANIC FOOD PRODUCTS, INC., a California corporation                           

By:  ______________________________                                             

By:  ______________________________                                             

9.

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                                                                         ANNEX F

June ___, 1999                                                                  

Organic Food Products, Inc.                                                     
55 Monterey Road                                                                
Morgan Hill, California 95037                                                   

Ladies and Gentlemen:                                                           

The  undersigned  is a  shareholder  or has rights to  acquire  shares of common
stock,  without par value ("Common Stock"), of Organic Food Products,  Inc. (the
"Company")  and  wishes  to  facilitate   the   transactions   (the   "Mergers")
contemplated  in (1) the Agreement and Plan of Merger and  Reorganization  dated
May 14, 1999 (the  "Spectrum  Merger  Agreement") by and between the Company and
Spectrum Naturals, Inc., (2) the Agreement and Plan of Merger and Reorganization
dated May 14,  1999 (the "OI Merger  Agreement")  by and between the Company and
Organic  Ingredients,  Inc.  and  (3) a  Registration  Statement  on  Form  S-4,
including a joint proxy  statement/prospectus  (the "Registration Statement") to
be  transmitted  for filing with the  Securities  and Exchange  Commission on or
about June 18, 1999.                                                            

In  consideration  of the foregoing,  and in order to induce you to proceed with
the  Mergers,  the  undersigned  hereby  irrevocably  agrees  that it will  not,
directly or indirectly,  sell,  offer,  contract to sell,  transfer the economic
risk of ownership  in, make any short sale,  pledge or otherwise  dispose of any
shares of Common Stock or any securities  convertible  into or  exchangeable  or
exercisable for or any other rights to purchase or acquire Common Stock, without
the prior  written  consent of the Company's  Board of  Directors,  for a period
beginning  on the date  hereof  and ending on the date one year from the date of
the closing of the Mergers (the "Lock-Up Period").                              

Notwithstanding  the foregoing,  if the undersigned is an individual,  he or she
may  transfer  any  shares of Common  Stock or  securities  convertible  into or
exchangeable or exercisable for the Company's  Common Stock either during his or
her lifetime or on death by will or intestacy to his or her immediate  family or
to a trust the  beneficiaries of which are exclusively the undersigned  and/or a
member or members of his or her immediate family; provided,  however, that prior
to any such transfer each transferee shall execute an agreement, satisfactory to
the Company,  pursuant to which each transferee  shall agree to receive and hold
such shares of Common Stock, or securities  convertible  into or exchangeable or
exercisable for the Common Stock,  subject to the provisions  hereof,  and there
shall be no further  transfer except in accordance  with the provisions  hereof.
For the purposes of this paragraph, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the transferor.                

The  undersigned  hereby waives any rights of the  undersigned to sell shares of
Common Stock or any other security issued by the Company pursuant to the Mergers
or the  Registration  Statement,  and  acknowledges  and agrees  that during the
Lock-Up Period the  undersigned  has no right to require the Company to register
under the Securities Act of 1933 such Common Stock or other securities issued by
the Company and beneficially owned by the undersigned.                          

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Organic Food Products, Inc.                                                     
June __, 1999                                                                   
Page 2                                                                          

The  undersigned   understands  that  the  agreements  of  the  undersigned  are
irrevocable  and  shall  be  binding  upon  the   undersigned's   heirs,   legal
representatives,  successors and assigns. The undersigned agrees and consents to
the  entry of stop  transfer  instructions  with the  Company's  transfer  agent
against the transfer of Common Stock or other  securities of the Company held by
the undersigned except in compliance with this agreement.                       

                       Very truly yours,

Dated:                                                                          
       ---------------------               -------------------------------------
               Signature

                                          ------------------------------------
                            Printed Name and Title

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                                                                         ANNEX G

VOTING AGREEMENT

     THIS VOTING  AGREEMENT is entered  into as of May 14, 1999,  by and BETWEEN
SPECTRUM NATURALS,  INC., a California  corporation ("SNI"), and _______________
("Shareholder").                                                                

RECITALS

     A.  and  Organic  Food  Products,   Inc.,  a  California  corporation  (the
"Company") are entering into an Agreement and Plan of Merger and  Reorganization
of even date herewith (the  "Reorganization  Agreement") which provides (subject
to the  conditions  set forth  therein)  for the merger of SNI with and into the
Company (the "Merger").                                                         

     B. In  order to  induce  SNI to enter  into the  Reorganization  Agreement,
Shareholder is entering into this Voting Agreement.                             

 AGREEMENT

     The parties to this Voting Agreement,  intending to be legally bound, agree
as follows:                                                                     

SECTION 1. CERTAIN DEFINITIONS                                                  

For purposes of this Voting Agreement:                      

          (a) "Company  Common Stock" shall mean the common stock, no par value,
of the Company.                                                                 

          (b)  "Expiration  Date"  shall  mean the  earlier of (i) the date upon
which the Reorganization Agreement is validly terminated,  or (ii) the date upon
which the Merger becomes effective.                                             

          (c)  Shareholder  shall  be  deemed  to  "Own"  or  to  have  acquired
"Ownership"  of a  security  if  Shareholder:  (i) is the  record  owner of such
security;  or (ii) is the  "beneficial  owner" (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934) of such security.                    

          (d) "Person" shall mean any (i) individual, (ii) corporation,  limited
liability company, partnership or other entity, or (iii) governmental authority.

          (e) "Subject Securities" shall mean: (i) all securities of the Company
(including  all shares of Company  Common  Stock and all  options,  warrants and
other rights to acquire  shares of Company Common Stock) Owned by Shareholder as
of the date of this Agreement; and (ii) all additional securities of the Company
(including  all  additional  shares of Company  Common Stock and all  additional
options, warrants and other rights to acquire shares of Company Common Stock) of
which  Shareholder  acquires  Ownership  during the period from the date of this
Agreement through the Expiration Date.                                          

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          (f) A Person  shall be  deemed  to have  effected  a  "Transfer"  of a
security if such Person directly or indirectly:  (i) sells, pledges,  encumbers,
grants an option with respect to,  transfers or disposes of such security or any
interest  in such  security;  or (ii)  enters into an  agreement  or  commitment
contemplating  the  possible  sale of,  pledge of,  encumbrance  of, grant of an
option with  respect  to,  transfer of or  disposition  of such  security or any
interest therein.                                                               

SECTION 2. TRANSFER OF SUBJECT SECURITIES                                       

     2.1  Transferee  of  Subject  Securities  to be  Bound  by this  Agreement.
Shareholder  agrees  that,  during  the  period  from  the  date of this  Voting
Agreement through the Expiration Date, Shareholder shall not cause or permit any
Transfer of any of the Subject  Securities to be effected  unless each Person to
which any of such  Subject  Securities,  or any  interest in any of such Subject
Securities,  is or may be transferred  shall have: (a) executed a counterpart of
this Voting Agreement and a proxy in the form attached hereto as Exhibit A (with
such modifications as SNI may reasonably  request);  and (b) agreed to hold such
Subject  Securities (or interest in such Subject  Securities)  subject to all of
the terms and provisions of this Voting Agreement.                              

     2.2 Transfer of Voting Rights.  Shareholder  agrees that, during the period
from the date of this Voting Agreement through the Expiration Date,  Shareholder
shall ensure that: (a) none of the Subject Securities is deposited into a voting
trust; and (b) no proxy is granted, and no voting agreement or similar agreement
is entered into, with respect to any of the Subject Securities.                 

SECTION 3. VOTING OF SHARES                                                     

     3.1 Voting Agreement.  Shareholder  agrees that, during the period from the
date of this Voting Agreement through the Expiration Date:                      

                  (a) at any meeting of  shareholders  of the  Company,  however
         called, Shareholder shall (unless otherwise directed in writing by SNI)
         cause all outstanding  shares of Company Common Stock that are Owned by
         Shareholder as of the record date fixed for such meeting to be voted in
         favor of the approval and adoption of the Reorganization  Agreement and
         the approval of the Merger,  and in favor of each of the other  actions
contemplated by the Reorganization Agreement; and             

                  (b) in the event  written  consents are solicited or otherwise
         sought from shareholders of the Company with respect to the approval or
         adoption of the Reorganization  Agreement, with respect to the approval
         of the Merger or with respect to any of the other actions  contemplated
         by the  Reorganization  Agreement,  Shareholder shall (unless otherwise
         directed in writing by SNI) cause to be  executed,  with respect to all
         outstanding   shares  of  Company   Common  Stock  that  are  Owned  by
         Shareholder as of the record date fixed for the consent to the proposed
        action, a written consent or written consents to such proposed action.

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3.2 Proxy; Further Assurances.                                        

          (a) Contemporaneously with the execution of this Voting Agreement: (i)
Shareholder  shall  deliver to SNI a proxy in the form  attached  to this Voting
Agreement  as  Exhibit A,  which  shall be  irrevocable  to the  fullest  extent
permitted by law, with respect to the shares  referred to therein (the "Proxy");
and (ii) Shareholder  shall cause to be delivered to SNI an additional proxy (in
the form attached hereto as Exhibit A) executed on behalf of the record owner of
any  outstanding  shares of Company  Common  Stock  that are owned  beneficially
(within the meaning of Rule 13d-3 under the  Securities  Exchange  Act of 1934),
but not of record, by Shareholder.                                              

          (b) Shareholder  shall, at his own expense,  perform such further acts
and execute such further documents and instruments as may reasonably be required
to vest in SNI the power to carry out and give effect to the  provisions of this
Voting Agreement.                                                               

SECTION 4. WAIVER OF APPRAISAL RIGHTS                                           

     Shareholder  hereby irrevocably and  unconditionally  waives, and agrees to
cause to be waived and to prevent the exercise of, any rights of appraisal,  any
dissenters'  rights and any similar rights relating to the Merger or any related
transaction  that  Shareholder  or any  other  Person  may have by virtue of the
ownership  of  any   outstanding   shares  of  Company  Common  Stock  Owned  by
Shareholder.                                                                    

SECTION 5. NO SOLICITATION                                                      

     Shareholder  agrees  that,  during the period  from the date of this Voting
Agreement  through  the  Expiration  Date,  Shareholder  shall not,  directly or
indirectly, and Shareholder shall ensure that his Representatives (as defined in
the  Reorganization  Agreement)  do not,  directly or  indirectly:  (i) solicit,
initiate,  encourage or induce the making,  submission  or  announcement  of any
Acquisition  Proposal (as defined in the  Reorganization  Agreement) or take any
action that could  reasonably  be expected to lead to an  Acquisition  Proposal;
(ii)  furnish any  information  regarding  the Company or any direct or indirect
subsidiary of the Company to any Person in connection  with or in response to an
Acquisition  Proposal or  potential  Acquisition  Proposal;  or (iii)  engage in
discussions   with  any  Person  with  respect  to  any  Acquisition   Proposal.
Shareholder  shall  immediately  cease and  discontinue,  and Shareholder  shall
ensure that his Representatives immediately cease and discontinue,  any existing
discussions with any Person that relate to any Acquisition Proposal.            

SECTION 6. REPRESENTATIONS AND WARRANTIES OF SHAREHOLDER                        

Shareholder hereby represents and warrants to SNI as follows:         

     6.1  Authorization,  etc.  Shareholder  has the absolute  and  unrestricted
right,  power,  authority  and  capacity  to execute  and  deliver  this  Voting
Agreement and the Proxy and to perform his obligations hereunder and thereunder.

3.

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This Voting  Agreement  and the Proxy have been duly  executed and  delivered by
Shareholder and constitute legal, valid and binding  obligations of Shareholder,
enforceable against  Shareholder in accordance with their terms,  subject to (i)
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.                                                   

6.2 No  Conflicts  or  Consents                                       

          (a) The execution and delivery of this Voting  Agreement and the Proxy
by  Shareholder  do not, and the  performance  of this Voting  Agreement and the
Proxy by  Shareholder  will not:  (i)  conflict  with or violate any law,  rule,
regulation,  order,  decree or judgment applicable to Shareholder or by which he
or any of his  properties  is or may be bound or affected;  or (ii) result in or
constitute  (with or  without  notice or lapse of time) any breach of or default
under, or give to any other Person (with or without notice or lapse of time) any
right of termination,  amendment,  acceleration  or  cancellation  of, or result
(with or without notice or lapse of time) in the creation of any  encumbrance or
restriction on any of the Subject Securities  pursuant to, any contract to which
Shareholder  is a party  or by which  Shareholder  or any of his  affiliates  or
properties is or may be bound or affected.                                      

          (b) The execution and delivery of this Voting  Agreement and the Proxy
by  Shareholder  do not, and the  performance  of this Voting  Agreement and the
Proxy by Shareholder will not, require any consent or approval of any Person.   

     6.3  Title to  Securities.  As of the date of this  Voting  Agreement:  (a)
Shareholder holds of record (free and clear of any encumbrances or restrictions)
the number of  outstanding  shares of Company  Common  Stock set forth under the
heading  "Shares Held of Record" on the signature page hereof;  (b)  Shareholder
holds (free and clear of any encumbrances or restrictions) the options, warrants
and other rights to acquire  shares of Company  Common Stock set forth under the
heading "Options and Other Rights" on the signature page hereof; (c) Shareholder
Owns the  additional  securities  of the  Company  set forth  under the  heading
"Additional Securities Beneficially Owned" on the signature page hereof; and (d)
Shareholder  does not directly or indirectly  Own any shares of capital stock or
other  securities  of the  Company,  or any  option,  warrant or other  right to
acquire (by purchase,  conversion  or otherwise)  any shares of capital stock or
other securities of the Company, other than the shares and options, warrants and
other rights set forth on the signature page hereof.                            

     6.4  Accuracy  of  Representations.   The  representations  and  warranties
contained in this Voting  Agreement  are accurate in all respects as of the date
of this Voting Agreement,  will be accurate in all respects at all times through
the  Expiration  Date and will be accurate in all respects as of the date of the
consummation of the Merger as if made on that date.                             

SECTION 7. ADDITIONAL COVENANTS OF SHAREHOLDER                                  

     7.1  Further   Assurances.   From  time  to  time  and  without  additional
consideration,  Shareholder  shall (at  Shareholder's  sole expense) execute and
deliver,  or cause to be executed  and  delivered,  such  additional  transfers,

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assignments,  endorsements,  proxies, consents and other instruments,  and shall
(at  Shareholder's  sole expense) take such further actions,  as SNI may request
for the  purpose  of  carrying  out and  furthering  the  intent of this  Voting
Agreement.                                                                      

     7.2 Legend.  Immediately  after the execution of this Voting Agreement (and
from time to time upon the acquisition by Shareholder of Ownership of any shares
of Company Common Stock prior to the Expiration Date),  Shareholder shall ensure
that each certificate  evidencing any outstanding shares of Company Common Stock
or other  securities of the Company Owned by  Shareholder  bears a legend in the
following form:                                                                 

         THE SECURITY OR SECURITIES  REPRESENTED BY THIS  CERTIFICATE MAY NOT BE
         SOLD,  EXCHANGED  OR  OTHERWISE  TRANSFERRED  OR  DISPOSED OF EXCEPT IN
         COMPLIANCE WITH THE TERMS AND PROVISIONS OF THE VOTING  AGREEMENT DATED
         AS OF MAY 10, 1999,  BETWEEN THE HOLDER  HEREOF AND SPECTRUM  NATURALS,
         INC., AS IT MAY BE AMENDED, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF SPECTRUM NATURALS, INC.                  

SECTION 8. MISCELLANEOUS                                                        

     8.1  Survival  of   Representations,   Warranties   and   Agreements.   All
representations,  warranties,  covenants and  agreements  made by Shareholder in
this Voting Agreement shall survive (i) the consummation of the Merger, (ii) any
termination of the Reorganization Agreement, and (iii) the Expiration Date.     

     8.2 Indemnification.  Shareholder shall hold harmless and indemnify SNI and
SNI's  affiliates from and against,  and shall  compensate and reimburse SNI and
SNI's  affiliates  for,  any loss,  damage,  claim,  liability,  fee  (including
attorneys'  fees),  demand,  cost or expense  (regardless of whether or not such
loss,  damage,  claim,  liability,  fee,  demand,  cost or expense  relates to a
third-party claim) that is directly or indirectly suffered or incurred by SNI or
any of SNI's  affiliates,  or to which SNI or any of SNI's affiliates  otherwise
becomes  subject,  and that  arises  directly  or  indirectly  from,  or relates
directly or indirectly to, (a) any inaccuracy in or breach of any representation
or warranty  contained in this Voting Agreement,  or (b) any failure on the part
of  Shareholder  to  observe,  perform or abide by, or any other  breach of, any
restriction,  covenant,  obligation or other provision  contained in this Voting
Agreement or in the Proxy.                                                      

     8.3  Expenses.  All costs and  expenses  incurred  in  connection  with the
transactions  contemplated  by this Voting  Agreement shall be paid by the party
incurring such costs and expenses.                                              

     8.4 Notices. Any notice or other communication  required or permitted to be
delivered  to either party under this Voting  Agreement  shall be in writing and
shall be deemed properly delivered,  given and received when delivered (by hand,
by registered  mail, by courier or express  delivery service or by facsimile) to
the address or  facsimile  telephone  number set forth  beneath the name of such
party  below (or to such other  address or  facsimile  telephone  number as such
party shall have specified in a written notice given to the other party):       

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if to Shareholder:                          

                  at the address set forth below Shareholder's
            signature on the signature page hereof

if to SNI:                                  

Spectrum Naturals, Inc.   
133 Copeland Street       
Petaluma, CA  94951       
   Attn: Chief Executive Officer
Fax:     (707) 765-1026   

     8.5 Severability.  If any provision of this Voting Agreement or any part of
any  such  provision  is  held  under  any   circumstances   to  be  invalid  or
unenforceable  in any  jurisdiction,  then (a) such  provision  or part  thereof
shall, with respect to such  circumstances and in such  jurisdiction,  be deemed
amended to conform to applicable  laws so as to be valid and  enforceable to the
fullest  possible  extent,  (b)  the  invalidity  or  unenforceability  of  such
provision  or part thereof  under such  circumstances  and in such  jurisdiction
shall not  affect the  validity  or  enforceability  of such  provision  or part
thereof under any other circumstances or in any other jurisdiction,  and (c) the
invalidity  or  unenforceability  of such  provision or part  thereof  shall not
affect the validity or  enforceability of the remainder of such provision or the
validity or enforceability of any other provision of this Voting Agreement. Each
provision of this Voting  Agreement is separable  from every other  provision of
this Voting Agreement,  and each part of each provision of this Voting Agreement
is separable from every other part of such provision.                           

     8.6  Entire  Agreement.  This  Voting  Agreement,  the  Proxy and any other
documents  delivered by the parties in connection herewith constitute the entire
agreement  between the parties  with  respect to the subject  matter  hereof and
thereof  and  supersede  all prior  agreements  and  understandings  between the
parties with respect thereto. No addition to or modification of any provision of
this Voting  Agreement shall be binding upon either party unless made in writing
and signed by both parties.                                                     

     8.7 Assignment;  Binding Effect.  Except as provided  herein,  neither this
Voting  Agreement  nor any of the  interests  or  obligations  hereunder  may be
assigned or delegated by Shareholder  and any attempted or purported  assignment
or delegation of any of such interests or obligations shall be void.  Subject to
the preceding sentence,  this Voting Agreement shall be binding upon Shareholder
and his heirs,  estate,  executors,  personal  representatives,  successors  and
assigns,  and shall inure to the benefit of SNI and its  successors and assigns.
Without  limiting any of the restrictions set forth in Section 2 or elsewhere in
this Voting Agreement, this Voting Agreement shall be binding upon any Person to
whom any Subject Securities are transferred. Nothing in this Voting Agreement is
intended to confer on any Person (other than SNI and its successors and assigns)
any rights or remedies of any nature.                                           

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     8.8 Specific  Performance.  The parties agree that irreparable damage would
occur in the event that any of the  provisions  of this Voting  Agreement or the
Proxy was not performed in accordance  with its specific  terms or was otherwise
breached.  Shareholder  agrees  that,  in the event of any breach or  threatened
breach by  Shareholder  of any covenant or  obligation  contained in this Voting
Agreement  or in the Proxy,  SNI shall be  entitled  (in  addition  to any other
remedy that may be  available  to it,  including  monetary  damages) to seek and
obtain (a) a decree or order of specific  performance  to enforce the observance
and  performance  of  such  covenant  or  obligation,   and  (b)  an  injunction
restraining such breach or threatened  breach.  Shareholder  further agrees that
neither SNI nor any other  Person  shall be required to obtain,  furnish or post
any bond or similar instrument in connection with or as a condition to obtaining
any remedy referred to in this Section 8.8, and Shareholder  irrevocably  waives
any right he may have to require  the  obtaining,  furnishing  or posting of any
such bond or similar instrument.                                                

     8.9  Non-Exclusivity.  The rights  and  remedies  of SNI under this  Voting
Agreement are not exclusive of or limited by any other rights or remedies  which
it may have,  whether at law, in equity, by contract or otherwise,  all of which
shall be cumulative (and not  alternative).  Without  limiting the generality of
the foregoing,  the rights and remedies of SNI under this Voting Agreement,  and
the obligations and liabilities of Shareholder under this Voting Agreement,  are
in addition to their respective  rights,  remedies,  obligations and liabilities
under  common law  requirements  and under all  applicable  statutes,  rules and
regulations.  Nothing in this Voting  Agreement shall limit any of Shareholder's
obligations,  or the rights or remedies of SNI,  under any  Affiliate  Agreement
between SNI and Shareholder;  and nothing in any such Affiliate  Agreement shall
limit any of Shareholder's obligations, or any of the rights or remedies of SNI,
under this Voting Agreement.                                                    

8.10 Governing Law; Venue.                                            

          (a)  This  Voting  Agreement  and the  Proxy  shall  be  construed  in
accordance  with,  and  governed  in all  respects  by, the laws of the State of
California (without giving effect to principles of conflicts of laws).          

          (b) Any legal action or other legal proceeding relating to this Voting
Agreement  or the  Proxy or the  enforcement  of any  provision  of this  Voting
Agreement  or the Proxy may be brought or  otherwise  commenced  in any state or
federal court located in the County of San Francisco, California. Shareholder:  

                  (i)  expressly  and  irrevocably  consents  and submits to the
         jurisdiction  of each state and federal  court located in the County of
         San  Francisco,  California  (and each  appellate  court located in the
     State of California), in connection with any such legal proceeding;

                  (ii) agrees that  service of any process,  summons,  notice or
         document  by U.S.  mail  addressed  to him at the  address set forth in
         Section  8.4  shall  constitute  effective  service  of  such  process,
        summons, notice or document for purposes of any such legal proceeding;

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                  (iii) agrees that each state and federal  court located in the
         County of San Francisco, California, shall be deemed to be a convenient
forum; and                                                    

                  (iv)  agrees not to assert (by way of motion,  as a defense or
         otherwise),  in any such  legal  proceeding  commenced  in any state or
         federal court located in the County of San Francisco,  California,  any
         claim that Shareholder is not subject personally to the jurisdiction of
         such  court,  that  such  legal  proceeding  has  been  brought  in  an
         inconvenient  forum,  that the venue of such  proceeding is improper or
         that  this  Voting  Agreement  or the  subject  matter  of this  Voting
Agreement may not be enforced in or by such court.            

Nothing  contained  in this  Section  8.10 shall be deemed to limit or otherwise
affect the right of SNI to commence any legal  proceeding  or otherwise  proceed
against Shareholder in any other forum or jurisdiction.                         

          (c)  SHAREHOLDER  IRREVOCABLY  WAIVES  THE  RIGHT  TO A JURY  TRIAL IN
CONNECTION WITH ANY LEGAL  PROCEEDING  RELATING TO THIS VOTING  AGREEMENT OR THE
PROXY OR THE ENFORCEMENT OF ANY PROVISION OF THIS VOTING AGREEMENT OR THE PROXY.

     8.11 Counterparts.  This Voting Agreement may be executed by the parties in
separate counterparts,  each of which when so executed and delivered shall be an
original,  but all such counterparts shall together  constitute one and the same
instrument.                                                                     

     8.12  Captions.  The captions  contained in this Voting  Agreement  are for
convenience of reference  only,  shall not be deemed to be a part of this Voting
Agreement and shall not be referred to in connection  with the  construction  or
interpretation of this Voting Agreement.                                        

     8.13  Attorneys'  Fees.  If any  legal  action  or other  legal  proceeding
relating to this Voting  Agreement or the  enforcement  of any provision of this
Voting Agreement is brought against  Shareholder,  the prevailing party shall be
entitled to recover  reasonable  attorneys'  fees, costs and  disbursements  (in
addition to any other relief to which the prevailing party may be entitled).    

     8.14 Waiver.  No failure on the part of SNI to exercise  any power,  right,
privilege or remedy under this Voting Agreement, and no delay on the part of SNI
in exercising any power, right, privilege or remedy under this Voting Agreement,
shall  operate as a waiver of such power,  right,  privilege  or remedy;  and no
single or partial exercise of any such power,  right,  privilege or remedy shall
preclude any other or further  exercise  thereof or of any other  power,  right,
privilege or remedy.  SNI shall not be deemed to have waived any claim available
to SNI arising out of this Voting Agreement,  or any power, right,  privilege or
remedy of SNI under this  Voting  Agreement,  unless  the waiver of such  claim,
power, right, privilege or remedy is expressly set forth in a written instrument
duly  executed and  delivered on behalf of SNI; and any such waiver shall not be
applicable  or have any effect  except in the  specific  instance in which it is
given.                                                                          

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8.15 Construction.                                                    

          (a) For  purposes  of this  Voting  Agreement,  whenever  the  context
requires:  the singular  number shall  include the plural,  and vice versa;  the
masculine  gender shall  include the feminine and neuter  genders;  the feminine
gender shall  include the masculine  and neuter  genders;  and the neuter gender
shall  include  masculine and feminine  genders.                                

          (b) The parties agree that any rule of construction to the effect that
ambiguities  are to be resolved  against the drafting party shall not be applied
in the construction or interpretation of this Voting Agreement.                 

          (c) As  used  in  this  Voting  Agreement,  the  words  "include"  and
"including,"  and  variations  thereof,  shall  not be  deemed  to be  terms  of
limitation,  but rather  shall be deemed to be  followed  by the words  "without
limitation."                                                                    

          (d) Except as  otherwise  indicated,  all  references  in this  Voting
Agreement to "Sections" and "Exhibits" are intended to refer to Sections of this
Voting Agreement and Exhibits to this Voting Agreement.                         

     IN WITNESS  WHEREOF,  SNI and Shareholder have caused this Voting Agreement
to be executed as of the date first written above.                              

                                   SPECTRUM NATURALS, INC.

               By:
                                                 -------------------------------
                                                   Jethren Phillips, CEO

                        SHAREHOLDER:

                                              ----------------------------------
                 Name:
                    Address:
                                                      --------------------------

                                        Facsimile:
                                                                  --------------

                                                           Additional Securities
Shares Held of Record       Options and Other Rights        Beneficially Owned  
---------------------       ------------------------        ------------------  

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 EXHIBIT A

 FORM OF IRREVOCABLE PROXY

     The  undersigned  shareholder of Organic Food Products,  Inc., a California
corporation (the "Company"), hereby irrevocably (to the fullest extent permitted
by law) appoints and constitutes Jethren Phillips and Spectrum Naturals, Inc., a
California  corporation  ("SNI"), and each of them, the attorneys and proxies of
the undersigned with full power of substitution and resubstitution,  to the full
extent of the undersigned's rights with respect to (i) the outstanding shares of
capital stock of the Company owned of record by the  undersigned  as of the date
of this proxy,  which shares are specified on the final page of this proxy,  and
(ii) any and all  other  shares  of  capital  stock  of the  Company  which  the
undersigned may acquire on or after the date hereof.  (The shares of the capital
stock of the Company  referred to in clauses "(i)" and "(ii)" of the immediately
preceding  sentence  are  collectively  referred to as the  "Shares.")  Upon the
execution hereof, all prior proxies given by the undersigned with respect to any
of the Shares are hereby revoked,  and the undersigned agrees that no subsequent
proxies will be given with respect to any of the Shares.                        

     This proxy is  irrevocable,  is coupled  with an interest and is granted in
connection with the Voting Agreement,  dated as of the date hereof,  between SNI
and the undersigned (the "Voting Agreement"), and is granted in consideration of
SNI entering into the Agreement and Plan of Merger and Reorganization,  dated as
of  the  date  hereof,   between  SNI  and  the  Company  (the   "Reorganization
Agreement").                                                                    

     The attorneys  and proxies named above will be empowered,  and may exercise
this  proxy,  to vote the Shares at any time  until the  earlier to occur of the
valid termination of the  Reorganization  Agreement or the effective time of the
merger contemplated thereby (the "Merger") at any meeting of the shareholders of
the Company,  however called,  or in connection with any solicitation of written
consents from shareholders of the Company, in favor of the approval and adoption
of the Reorganization  Agreement and the approval of the Merger, and in favor of
each of the other actions contemplated by the Reorganization Agreement.         

The undersigned may vote the Shares on all other matters.             

     This proxy shall be binding  upon the heirs,  estate,  executors,  personal
representatives,  successors  and  assigns  of the  undersigned  (including  any
transferee of any of the Shares).                                               

     If any  provision  of this proxy or any part of any such  provision is held
under any circumstances to be invalid or unenforceable in any jurisdiction, then
(a) such provision or part thereof shall, with respect to such circumstances and
in such  jurisdiction,  be deemed amended to conform to applicable laws so as to
be valid and enforceable to the fullest possible  extent,  (b) the invalidity or
unenforceability  of such provision or part thereof under such circumstances and
in such  jurisdiction  shall not affect the validity or  enforceability  of such
provision  or  part  thereof  under  any  other  circumstances  or in any  other
jurisdiction,  and (c) the invalidity or  unenforceability  of such provision or

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part thereof shall not affect the validity or enforceability of the remainder of
such provision or the validity or  enforceability of any other provision of this
proxy.  Each provision of this proxy is separable from every other  provision of
this proxy,  and each part of each  provision  of this proxy is  separable  from
every other part of such provision.                                             

     This proxy shall terminate upon the earlier of the valid termination of the
Reorganization Agreement or the effective time of the Merger.                   

Dated:  ________, 1999.                                                         

                                            ------------------------------------
            Name

                                            Number of shares  of common stock of
                                            the Company owned of  record  as  of
                                 the  date  of this proxy:

                                            ------------------------------------

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 PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS                              

ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                             

(a)      Exhibits                                                               

Exhibit                                                                         
Number         Description of Exhibits                                          

2.1       Agreement and Plan of Merger and Reorganization, dated as of May 14,  
       1999, between Registrant and Organic Ingredients, Inc. Reference is
   made to Annex A of the Joint Proxy Statement/Prospectus that is
included in the Registration Statement.                     
2.2       Agreement and Plan of Merger and Reorganization, dated May 14, 1999,  
       between Registrant and Spectrum Naturals, Inc. Reference is made to
       Annex B of the Joint Proxy Statement/Prospectus that is included in
the Registration Statement.                                 
2.3       Form of Employment Agreement Reference is made to Annex E of the Joint
   Proxy Statement/Prospectus that is included in the Registration
Statement.                                                  
2.4       Form of Shareholder Lock-up Agreement. Reference is made to Annex F of
the Joint Proxy Statement/Prospectus that is included in the
Registration Statement.                                     
2.5       Form of Certificate of Merger between Organic Ingredients, Inc. and   
Registrant.                                                 
2.6       Form of Certificate of Merger between Spectrum Naturals, Inc. and     
Registrant.                                                 
3.1       Certificate of Amendment of Articles of Incorporation of Garden Valley
  Naturals, Inc. filed with the California Secretary of State on
September 18, 1996.                                         
3.2       Form of Amended and Restated Articles of Incorporation of Registrant. 
        Reference is made to Annex D of the Joint Proxy Statement/Prospectus
that is included in the Registration Statement.             
3.3       Bylaws of Registrant.                                                 
3.4       Form of Restated Bylaws of Registrant.                                
5.1       Form of Opinion of Carr, McClellan, Ingersoll, Thompson & Horn P.C.   
5.2       Form of Opinion of Cooley Godward LLP.                                
5.3       Form of Opinion of Bosso, Williams, Sachs, Book, Atack & Gallagher, A 
Professional Corporation ("Bosso, Williams").               
8.1       Form of Tax Opinion of Carr, McClellan, Ingersoll, Thompson & Horn    
P.C.                                                        
8.2       Form of Tax Opinion of Cooley Godward, LLP.                           
8.3       Form of Tax Opinion of Bosso, Williams.                               
10.1      Form of Voting Agreement, dated as of May 14, 1999, between Spectrum  
       Naturals, Inc. and certain shareholders of Registrant. Reference is
   made to Annex G to the Joint Proxy Statement/Prospectus that is
included in the Registration Statement.                     
10.2      Redemption Agreement dated November 1, 1996 ("Redemption Agreement")  
  between Debora Bainbridge Phillips and Spectrum Naturals, Inc.
          (including related Pledge Agreement dated June 6, 1997, Guaranty dated
      June 6, 1997 of Jethren Phillips and Promissory Note dated June 1,
1997 of Spectrum Naturals, Inc.).                           
10.3      First Amendment to Redemption Agreement dated September 11, 1998.     
10.4      Second Amendment to Redemption Agreement dated July 2, 1998.          
10.5      Third Amendment to Redemption Agreement dated July 9, 1999.           
10.6      Fourth Amendment to Redemption Agreement dated July 12, 1999.         
21.1      Subsidiaries of Registrant.                                           
23.1      Consent of Carr, McClellan, Ingersoll, Thompson & Horn P.C. Reference 
is made to Exhibits 5.1 and 8.1.                            
23.2      Consent of Cooley Godward LLP. Reference is made to Exhibits 5.2 and  
8.2.                                                        

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Exhibit                                                                         
Number         Description of Exhibits                                          

23.3      Consent of Bosso, Williams. Reference is made to Exhibits 5.3 and 8.3.
23.4      Consent of BDO Seidman, LLP, Independent Certified Public Accountants.
23.5      Consent of Semple & Cooper, LLP, Independent Certified Public         
Accountants                                                 
23.6      Consent of Moss Adams LLP Independent Certified Public Accountants.   
23.7      Consent of Hutchinson and Bloodgood LLP, Independent Certified Public 
Accountants.                                                
24.1      Power of Attorney. Reference is made to page II-4.                    
27.1      Financial Data Schedule - Organic Food Products, Inc.                 
99.1      Form of proxy card for the Registrant's Special Meeting of            
Shareholders.                                               
99.2      Form of proxy card for the Spectrum Naturals, Inc. Special Meeting of 
Shareholders.                                               
99.3      Form of proxy card for the Organic Ingredients, Inc. Special Meeting  
of Shareholders.                                            
----------                                                                      

(b)      Financial Statement of Schedules                                       

None Required.                                                

ITEM 22. UNDERTAKINGS                                                           

The undersigned registrant hereby undertakes:                                   

    (1)  To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:    

      (i)  To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;                           

       (ii) To reflect in the prospectus any facts or events arising after
           the effective date of the registration statement (or the most
              recent post- effective amendment thereof) which, individually or
    in the aggregate represent a fundamental change in the
  information set forth in the registration statement;

         (iii) To include any material information with respect to the plan of
       distribution not previously disclosed in the registration
         statement or any material change to such information in the
registration statement.                           

(2)  That, for the purpose of determining any liability under the     
       Securities Act of 1933, each such post-effective amendment shall be
        deemed to be a new registration statement relating to the securities
     offered therein, and the offering of such securities at that time
 shall be deemed to be the initial bona fide offering thereof.

     (3)  To remove from registration by means of a post-effective amendment any
 of the securities being registered which remain unsold at the
termination of the offering.                                

   (4)  That, for purposes of determining any liability under the Securities
          Act of 1933, each filing of the registrant's annual report pursuant to
         section 13(a) or section 15(d) of the Securities Exchange Act of 1934
         that is incorporated by reference in the registration statement shall

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be deemed to be a new registration statement relating to the
      securities offered therein, and the offering of such securities at
  that time shall be deemed to be the initial bona fide offering
thereof.                                                    

(5)  That prior to any public reoffering of the securities registered 
 hereunder through use of a prospectus which is a part of this
         registration statement, by any person or party who is deemed to be an
        underwriter within the meaning of Rule 145(c), the issuer undertakes
       that such reoffering prospectus will contain the information called
          for by the applicable registration form with respect to reofferings by
          persons who may be deemed underwriters, in addition to the information
called for by the other Items of the applicable form.       

(6)  That every prospectus (i) that is filed pursuant to paragraph (5)
         immediately preceding, or (ii) that purports to meet the requirements
    of section 10(a)(3) of the Act and is used in connection with an
          offering of securities subject to Rule 415, will be filed as a part of
         an amendment to the registration statement and will not be used until
          such amendment is effective, and that, for purposes of determining any
        liability under the Securities Act of 1933, each such post-effective
         amendment shall be deemed to be a new registration statement relating
          to the securities offered therein, and the offering of such securities
     at that time shall be deemed to be the initial bona fide offering
thereof.                                                    

(7)  To respond to requests for information that is incorporated by   
          reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of
         this Form, within one business day of receipt of such request, and to
        send the incorporated documents by first class mail or other equally
        prompt means. This includes information contained in documents filed
          subsequent to the effective date of the registration statement through
the date of responding to the request.                      

(8)  To supply by means of a post-effective amendment all required    
        information concerning a transaction, and the company being acquired
     involved therein, that was not the subject of and included in the
registration statement when it became effective.            

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the  
registrant pursuant to the foregoing provisions, or otherwise, the registrant   
has been advised that in the opinion of the Securities and Exchange Commission  
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for         
indemnification against such liabilities (other than the payment by the         
registrant of expenses incurred or paid by a director, officer or controlling   
person of the registrant in the successful defense of any action, suit or       
proceeding) is asserted by such director, officer or controlling person in      
connection with the securities being registered, the registrant will, unless in 
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such         
indemnification by it is against public policy as expressed in the Securities   
Act of 1933 and will be governed by the final adjudication of such issue.       

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SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its      
behalf by the undersigned, thereunto duly authorized, on the 21st day of July,  
1999.                                                                           

                             ORGANIC FOOD PRODUCTS, INC.

                          By: /s/ John Battendieri
                                             -----------------------------------
                                    John Battendieri
                                           Chief Executive Officer
                                             and Chairman of the Board

 POWER OF ATTORNEY

 Each person whose signature appears below constitutes and appoints John
Battendieri and Richard R. Bacigalupi, as his true and lawful attorney-in-fact  
and agent, each with full power of substitution for him and in his name, place  
and stead in any and all capacities, to sign any and all amendments to this     
Registration Statement, and to file the same, with exhibits thereto and other   
documents in connection therewith, with the Securities and Exchange Commission, 
granting unto said attorney-of-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and  
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that each said attorneys-in-fact 
and agent or his substitute or substitutes, may lawfully do or cause to be done 
by virtue hereof.                                                               

 Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the     
capacities and on the dates indicated.                                          

Signature                           Capacity                      Date
---------                           --------                      ----

/s/ John Battendieri             Chairman of the Board, Chief      July 21, 1999
----------------------------     Executive Officer and Director                 
John Battendieri                 (Principal Executive Officer)                  

/s/ Richard R. Bacigalupi        Chief Financial Officer           July 21, 1999
----------------------------     (Principal Financial and                       
Richard R. Bacigalupi            Accounting Officer)                            

/s/ Kenneth A. Steel, Jr.        Director                          July 20, 1999
----------------------------                                                    
Kenneth A. Steel, Jr.                                                           

/s/ Charles Bonner               Director                          July 20, 1999
----------------------------                                                    
Charles Bonner                                                                  

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 EXHIBIT INDEX

Exhibit                                                                         
Number      Description of Exhibits                                             

2.1       Agreement and Plan of Merger and Reorganization, dated as of May 14,  
   1999, between Organic Food Products, Inc. ("OFPI") and Spectrum
          Naturals, Inc. ("Spectrum"). Reference is made to Annex A of the Joint
   Proxy Statement/Prospectus that is included in the Registration
Statement.                                                  
2.2       Agreement and Plan of Merger and Reorganization, dated May 14, 1999,  
         between OFPI and Organic Ingredients, Inc. Reference is made to Annex
     B of the Joint Proxy Statement/Prospectus that is included in the
Registration Statement.                                     
2.3       Form of Employment Agreement. Reference is made to Annex E of the     
         Joint Proxy Statement/Prospectus that is included in the Registration
Statement.                                                  
2.4       Form of Shareholder Lock-up Agreement. Reference is made to Annex F of
the Joint Proxy Statement/Prospectus that is included in the
Registration Statement                                      
2.5       Form of Certificate of Merger between Spectrum Naturals, Inc. and     
Organic Food Products, Inc.                                 
3.1       Restated Articles of Incorporation of Garden Valley Naturals, Inc.    
       filed with the California Secretary of State on September 18, 1986.
3.2       Form of Amended and Restated Articles of Incorporation of Registrant. 
        Reference is made to Annex D of the Joint Proxy Statement/Prospectus
that is included in the Registration Statement.             
3.3       Bylaws of Registrant.                                                 
3.4       Form of Restated Bylaws of Registrant.                                
5.1       Form of Opinion of Carr, McClellan, Ingersoll, Thompson & Horn P.C.   
5.2       Form of Opinion of Cooley Godward LLP.                                
5.3       Form of Opinion of Bosso, Williams, Sachs, Book, Atack & Gallagher, A 
Professional corporation ("Bosso, Williams").               
8.1       Form of Tax Opinion of Carr, McClellan, Ingersoll, Thompson & Horn    
P.C.                                                        
8.2       Form of Tax Opinion of Cooley Godward, LLP.                           
8.3       Form of Tax Opinion of Bosso, Williams.                               
10.1      Form of Voting Agreement, dated as of May 14, 1999, between Spectrum  
       Naturals, Inc. and certain shareholders of Registrant. Reference is
   made to Annex G to the Joint Proxy Statement/Prospectus that is
included in the Registration Statement.                     
10.2      Redemption Agreement dated November 1, 1996 ("Redemption Agreement")  
  between Debora Bainbridge Phillips and Spectrum Naturals, Inc.
          (including related Pledge Agreement dated June 6, 1997, Guaranty dated
      June 6, 1997 of Jethren Phillips and Promissory Note dated June 6,
1997 of Spectrum Naturals, Inc.).                           
10.3      First Amendment to Redemption Agreement dated September 11, 1998.     
10.4      Second Amendment to Redemption Agreement dated July 2, 1998.          
10.5      Third Amendment to Redemption Agreement dated July 9, 1999.           
10.6      Fourth Amendment to Redemption Agreement dated July 12, 1999.         
21.1      Subsidiaries of Registrant.                                           
23.1      Consent of Carr, McClellan, Ingersoll, Thompson & Horn P.C. Reference 
is made to Exhibits 5.1 and 8.1.                            
23.2      Consent of Cooley Godward LLP. Reference is made to Exhibits 5.2 and  
8.2.                                                        
23.3      Consent of Bosso, Williams. Reference is made to Exhibits 5.3 and 8.3.
23.4      Consent of BDO Seidman, LLP, Independent Certified Public Accountants.

23.5      Consent of Semple & Cooper, LLP, Independent Certified Public         
Accountants                                                 
23.6      Consent of Moss Adams LLP, Independent Certified Public Accountants.  
23.7      Consent of Hutchinson and Bloodgood LLP, Independent Certified Public 
Accountants.                                                
24.1      Power of Attorney. Reference is made to page II-4.                    
27.1      Financial Data Schedule - Organic Food Products, Inc.                 

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Exhibit                                                                         
Number    Description of Exhibits                                               

99.1      Form of proxy card for the Registrant's Special Meeting of            
Shareholders.                                               
99.2      Form of proxy card for the Spectrum Naturals, Inc. Special Meeting of 
Shareholders.                                               
99.3       Form of proxy card for the Organic Ingredients, Inc. Special Meeting 
of Shareholders.                                            

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