**Exhibit 10.40**

**CONSULTING AGREEMENT**

 

             Thisconsulting agreement (“Agreement”) is executed as of March 15, 2001, by andbetween The RiceX Company, a Delaware corporation (“Company”) and JDK &Associates, Inc., a California corporation (“Consultant”).

RE C I T A L S

             A.         Company desires to retain the servicesof Consultant as set forth below, and Consultant desires to be so retained byCompany on terms set forth below.

             NOW,THEREFORE, in consideration of the foregoing recitals and the mutual covenantsherein contained, the parties agree as follows:

 
|   | 1.     | Consulting  Services.   Consultant shall provide services to  Company as described in Exhibit “A” attached hereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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|   | 2.     | Term.  The term of this Agreement shall commence  on the date hereof and unless sooner terminated as provided herein, shall  terminate on December 31, 2001.  The  term of this Agreement may be extended beyond December 31, 2001 at the  election of either party, subject to negotiation of the terms of such extension.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
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|   | 3.     | Time  and Manner of Performance.  Consultant shall employ TKO  International.  JDK & Associates  and TKO International shall devote such time as is required to provide its  services under this Agreement.   Consultant shall be available for telephonic and personal consultation  and assistance on a reasonable basis consistent with the needs of Company and  the necessary performance standards for the services described in this  Agreement.  All services provided  hereunder shall be performed in accordance with good and standard  professional practice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   | 4.     | Compensation.  In consideration of its services to be  rendered hereunder, Company agrees to pay Consultant a fee of $10,000 per  month during the term of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
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|   | 5.     | Proprietary  Information.  Consultant acknowledges that Company  operates in a competitive environment, and that Company possesses and will  continue to develop and acquire proprietary information of substantial  commercial value.  The value of that  proprietary information depends on it remaining confidential, and by reason  of Consultant’s relationship with Company, Consultant will receive certain of  that proprietary information in the course of performing this Agreement.  Consultant therefore agrees to execute and  deliver to Company a Proprietary Information and Inventions Agreement in form  reasonably acceptable to Company.                                                                                                                                                                                                                                                                                                                                                                                                 |
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|   | 6.     | Termination.  Either party may terminate this Agreement  by giving the other party written notice thereof at least thirty (30) days in  advance of the date of termination.   In the event Company terminates this Agreement because it is not  satisfied with the services performed by Consultant, as determined by Company  in Company’s sole and absolute discretion, then effective upon such  termination all shares and warrants which have not yet been released to  Consultant pursuant to paragraph 7 below shall be returned to Company by  Consultant, and Consultant shall have no rights or interest in such  unreleased shares and warrants.                                                                                                                                                                                                                                                                                                                                                                                                        |
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|   | 7.     | Release  of Restrictions on Shares and Warrants.  So long as Consultant is performing its  services hereunder to the satisfaction of Company, Company agrees to remove  its existing restrictions on transfer with respect to the shares of common  stock and warrants of Company currently held by Consultant on the terms set forth  in this paragraph 7.  Concurrent with  the execution of this Agreement, Company shall remove its existing  restrictions on transfer with respect to 500,000 shares of Company’s common  stock held by Consultant, and so long as Company is satisfied with Consultant’s  services, shall release an additional 40,000 shares per month from such  restrictions on the first day of each month commencing on May 15, 2001 and  continuing through December 1, 2001. In addition, so long as Company is  satisfied with Consultant’s services, Company also will release its existing  restrictions on transfer with respect to 100,000 warrants per month  commencing on May 15, 2001 and ending December 1, 2001. |
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|   | 8.     | Miscellaneous.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
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|   |   | a.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Independent  Contractor.  Consultant agrees that in performing this  Agreement, he is acting as an independent contractor and not as an employee  or agent of Company.  As an  independent contractor, Consultant shall not be eligible for any benefits  which Company may provide to its employees.   All persons, if any, hired by Consultant to perform this Agreement  shall be employees of Consultant and shall not be construed as employees or  agents of Company in any respect.   Consultant shall be responsible for all taxes, insurance and other  costs and payments legally required to be withheld or provided in connection  with Consultant’s performance of this Agreement, including without  limitation, all withholding taxes, worker’s compensation insurance, and  similar costs. |
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|   |   | b.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Time  is of the Essence.  Time is of the essence in the performance  of the parties’ respective obligations herein contained. |
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|   |   | c.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Further  Assurance.  Each party agrees that upon the request of  the other it will, from time to time, execute and deliver to such other party  all such instruments and documents of further assurance or otherwise, and  will do any and all such acts and things, as reasonably may be required to  carry out the obligations of such party hereunder and consummate the  transactions contemplated hereby. |
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|   |   | d.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Headings. The headings of this Agreement are  included for purposes of reference and convenience only and shall not limit  or otherwise affect the construction or interpretation of any of the  provisions of this Agreement |
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|   |   | e.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Entire  Agreement: Modification.  This Agreement, including all exhibits,  constitutes the entire agreement between the parties hereto pertaining to the  subject matter hereof and supersedes all prior and contemporaneous agreements  and understandings of the parties in connection herewith.  No supplement, modification or amendment  of this Agreement shall be effective unless executed in writing by the  parties hereto. |
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|   |   | f.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Notice.  Whenever the service or the giving of any  document or consent by or on behalf of any party hereto upon any other party  is herein provided for, or becomes necessary or convenient under the  provisions of this Agreement or any document related hereto, a valid and  efficient service of such document shall be effected by delivering the same  in writing to such  party in person,  by Federal Express or other reputable courier, by facsimile, or by sending  the same by registered or certified mail, return receipt requested, and shall  be deemed received upon personal delivery if delivered personally, by Federal  Express or other reputable courier or by facsimile, or four (4) business days  after deposit in the mail in the United States, postage prepaid, addressed to  the person to receive such notice or communication at the following address: |
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                                        Company:         Daniel L. McPeak, Sr.                                        TheRiceX Company                                        1241Hawk’s Flight Court                                        ElDorado Hill, California 95762                                        Telephone:  (916) 933-3000                                        Facsimile:  (916) 933-3333

 

                                                     Consultant:      Joseph D. Kowal/TKO International                                                     JDK& Associates, Inc.                                                     19800Mac Arthur Boulevard                                                     Suite880                                                     Irvine, California 92612                                                     Telephone:  (949) 222-2955                                                     Facsimile:  (94) 222-2965

Notice of change of address shall begiven by written notice in the manner detailed in this paragraph 8.f.

|   | g.     | Counterparts.  This Agreement may be executed in  counterparts, each of which shall be deemed an original, but all of which,  together, shall constitute one and the same instrument.                                                                                                                                                                                                                                                      |
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|   | h.     | Law  Governing.  This Agreement shall be construed in  accordance with, and shall be governed by, the laws of the State of  California.                                                                                                                                                                                                                                                                                                    |
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|   | i.     | Successors  and Assigns.   Consultant may not assign any of his  rights, duties or obligations hereunder without the prior written consent of  company, which consent may be withheld in Company’s sole and absolute  discretion.  Subject to the foregoing,  this Agreement shall be binding upon and enforceable by, and shall inure to  the benefit of, the parties hereto and their respective successors and  assigns. |
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|   | j.     | Severability.  In the event any portion of this Agreement  shall be declared by any court of competent jurisdiction to be invalid,  illegal or unenforceable, such portion shall be deemed severed from this  Agreement, and the remaining parts hereof shall remain in full force and  effect, as fully as though such invalid, illegal or unenforceable portion had  never been a part of this Agreement.                                |

 

|   | k.     | Gender  and Number.  As used in this Agreement, the masculine,  the feminine and the neuter gender, and the singular or plural number, shall  be deemed to include the others wherever the context so indicates or  requires.                                                                                                      |
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|   | l.     | Attorneys’  Fees.  In the event of the bringing of any action  by either party hereto against the other arising out of this Agreement, the  party who is determined to be the prevailing party shall be entitled to recover  from the other party all costs and expenses of suit, including reasonable  attorneys’ fees. |

INWITNESS WHEREOF, the parties have executed this Agreement as of the date firstabove written.

|   |   | THE  RICEX COMPANY          |                       |   |
|--------|--------|-----------------------------|----------------------------|--------|
|   |   | A  Delaware corporation     |                       |   |
|   |   | (“Company”)       |                       |   |
|   |   |                        |                       |   |   |
|   |   | By:                         | /s/  Daniel L. McPeak, Sr. |   |   |
|   |   |                        |                            |   |   |
|   |   |                        | Its:   COB/CEO   |   |   |
|   |   |                        |                            |   |   |
|   |   |                        |                       |   |   |
|   |   | JDK  & ASSOCIATES, INC. |                       |   |
|   |   | A  California corporation   |                       |   |
|   |   | (“Consultant”)    |                       |   |
|   |   |                        |                       |   |   |
|   |   | By:                         | /s/  Joseph D. Kowal       |   |   |
|   |   |                        |                            |   |   |
|   |   |                        | Its:   President |   |   |
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**Exhibit “A”**

 

ConsultingServices

JDK & Associates, Inc. (“JDK”) shalldevelop an “investment story” regarding The RiceX Company (“RiceX”) in order toattract and enlist long term relationships for RiceX, expose RiceX to thefinancial community and stimulate investor interest in RiceX, and review andrevise RiceX’s promotional materials and provide other consulting servicesreasonably requested by RiceX.