<PAGE>

                                                                   EXHIBIT 4.60

THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS WARRANT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25106 OF
THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS WARRANT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF ANY EFFECTIVE REGISTRATION STATEMENT AS TO SUCH
SECURITIES FILED UNDER THE ACT AND COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER HEREOF THAT SUCH
REGISTRATION IS NOT REQUIRED.

                        WARRANT TO PURCHASE CAPITAL STOCK

                                       OF

                                THE RICEX COMPANY

This Warrant is entered into pursuant to the terms of the Severance Agreement
and Mutual Release of Claims Agreement between Edward G. Newton and The RiceX
Company (the "Company"). The Company hereby grants to Edward G. Newton, or her
permitted registered assigns ("Registered Holder"), subject to the terms and
conditions of this Warrant, the right to purchase from the Company at any time
after the date of this Warrant and prior to 5:00 p.m. Pacific Time on March 31,
2003, up to the number of shares (subject to adjustment as set forth herein and
rounded to whole shares) of Warrant Stock (as defined below) at a purchase price
per share equal to the Purchase Price (as defined below) subject to adjustment
as provided herein, upon surrender of this Warrant at the principal office of
the Company together with a duly executed Subscription Form in the form attached
hereto as Exhibit 1 and simultaneous payment of the full Purchase Price, as
adjusted to the extent provided herein, in lawful money of the United States of
America.

     1.   CERTAIN DEFINITIONS. The following terms shall have the meaning set
forth below:

          1.1  BOARD. The "Board" means the Board of Directors of the Company.

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<PAGE>

          1.2  COMPANY. The "Company" means The RiceX Company, a Delaware
corporation.

          1.3  EXPIRATION DATE. "Expiration Date" means 5:00 p.m. Pacific Time
on March 31, 2003, or, if earlier, the date and time determined under Section
5.4 of this Warrant.

          1.4  ISSUE DATE. "Issue Date" means the date of this Warrant.

          1.5  PURCHASE PRICE. "Purchase Price" means seventy-nine cents ($.79)
per share of Warrant Stock. The Purchase Price is subject to adjustment, as
provided herein.

          1.6  REGISTERED HOLDER. "Registered Holder" means Edward G. Newton or
her permitted registered assigns.

          1.7  SEC. "SEC" means the Securities Exchange Commission of the United
States of America.

          1.8  WARRANT. "Warrant" means this Warrant and Warrant(s) delivered in
substitution or exchange therefor, as provided herein.

          1.9  WARRANT STOCK. "Warrant Stock" means up to 57,000 shares of the
Common Stock of the Company and any other consideration issuable under this
Agreement upon exercise of this Warrant or any portion thereof. The number and
character of shares of Warrant Stock are subject to adjustment as provided
herein and the term "Warrant Stock" shall include stock and other securities and
property at any time receivable or issuable upon exercise of this Warrant.

     2.   EXERCISE. Subject to the terms of this Warrant and compliance with all
applicable securities laws, Registered Holder may exercise this Warrant at any
time, on any business day before the Expiration Date, for up to the number of
shares of Warrant Stock that is set forth in Section 1.9 above, by surrendering
this Warrant at the principal office of the Company at 1241 Hawks Flight Court,
El Dorado Hills, California 95762, with the subscription form attached hereto
duly executed by the Registered Holder, together with full payment in cash or
check of the sum obtained by multiplying (a) the number of shares of Warrant
Stock the Registered Holder desires to purchase by (b) the Purchase Price or
adjusted Purchase Price therefor, if applicable, as determined in accordance
with the terms hereof. Registered Holder may exercise this Warrant for less than
the full number of shares of Warrant Stock purchasable hereunder but must
exercise this Warrant in increments of at least twenty-five percent (25%) of the
initial shares of Warrant Stock, as adjusted pursuant hereto, if the exercise is
for less than all remaining Warrant Stock then exercisable hereunder. Upon
Registered Holder's partial exercise, Registered Holder must surrender this
Warrant, and the Company shall issue

                                       2
<PAGE>

to the Registered Holder a new Warrant of the same tenor for purchase of the
number of remaining shares of Warrant Stock not purchased. Registered Holder
shall be deemed to have exercised this Warrant immediately prior to the close of
business on the date of its surrender for exercise as provided above, and shall
be treated for all purposes as the holder of record of such shares as of the
close of business on such date. As soon as practicable on or after such date,
the Company shall issue and deliver to the Registered Holder or Holders a
certificate or certificates for the number of whole shares of Warrant Stock
issuable upon such exercise, together with cash in lieu of any fraction of a
share equal to such fraction of the current fair market value of one whole share
of Warrant Stock as of the date of exercise, as determined in good faith by the
Company's Board. No fractional shares may be issued upon any exercise of this
Warrant.

        3.      FULLY PAID SHARES. All shares of Warrant Stock the Company
issues upon exercise of this Warrant shall be validly issued, fully paid and
non-assessable.

        4.      TRANSFER AND EXCHANGE. Subject to the terms of this Warrant and
compliance with all applicable securities laws, this Warrant and all rights
hereunder are transferable, in whole or in part, on the books of the Company
maintained for such purpose at the principal office of the Company referred to
above, by the Registered Holder hereof in person, or by duly authorized
attorney, upon Registered Holder's surrender of this Warrant properly endorsed
and upon payment of any necessary transfer tax or other governmental charge
imposed upon such transfer. Upon any partial transfer, the Company shall issue
and deliver to the Registered Holder a new Warrant or Warrants with respect to
the shares of Warrant Stock not so transferred. Until a transfer of this Warrant
is registered on the books of the Company, the Company may treat the Registered
Holder hereof as the owner for all purposes. Notwithstanding the foregoing, this
Warrant and the rights hereunder may not be transferred unless such transfer (a)
complies with all applicable securities laws and the provisions of Section 11
hereof, and (b) effects the transfer of the right to purchase at least five
percent (5%) of the initial shares of Warrant Stock, as adjusted, or the right
to purchase all remaining shares of Warrant Stock purchasable under this Warrant
if the right to purchase less than five percent (5%) of the initial shares of
Warrant Stock remains untransferred.

        5.      ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES. The number or
character of shares of Warrant Stock issuable upon exercise of this Warrant and
the Purchase Price therefor shall be adjusted to the extent provided below upon
occurrence of the following events:

                5.1     ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS,
RECAPITALIZATION AND SIMILAR EVENTS. The Purchase Price of this Warrant and the
number of shares of Warrant Stock issuable upon exercise of this Warrant shall
each be proportionally adjusted to reflect any stock split, reverse stock split,
combination of shares, reclassification, recapitalization or other similar event
affecting the number of


                                       3
<PAGE>

outstanding shares of the Company's Stock. For example, if there should be a
2-for-1 stock split of the Company's Stock, the Purchase Price of this Warrant
shall be divided by two (2) and the number of shares of Warrant Stock
purchasable under this Warrant shall be doubled. An adjustment under this
Section 5.1 shall be effective at the close of business on the date such event
becomes effective.

                5.2     ADJUSTMENT FOR OTHER DIVIDENDS AND DISTRIBUTIONS. If the
Company shall make or issue, or shall fix a record date for the determination of
eligible holders entitled to receive, a dividend or other distribution with
respect to the Warrant Stock payable in securities of the Company, then, and in
each such case, the Registered Holder of this Warrant on exercise of this
Warrant at any time after the consummation, effective date or record date of
such event, shall receive, in addition to the shares of Warrant Stock issuable
on such exercise prior to such date, the securities or such other securities of
the Company to which such Registered Holder would have been entitled upon such
date if such Registered Holder had exercised this Warrant immediately prior
thereto (all subject to further adjustment as provided in this Warrant).

                5.3     ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION, MERGE. In
case of any reorganization of the Company (or any successor corporation, the
stock or other securities of which are at the time receivable on the exercise of
this Warrant), after the Issue Date, or in case, after such date, the Company
(or any other such successor corporation) shall consolidate all of its assets to
another corporation, then, and in each such case, the Registered Holder of this
Warrant, upon the exercise hereof (as provided in Section 2) at any time after
the consummation of such reorganization, consolidation, merger, or conveyance,
shall be entitled to receive, in lieu of the stock or other securities and
property receivable upon the exercise of this Warrant prior to such
consummation, the stock or other securities or property to which such Registered
Holder would have been entitled had Registered Holder exercised this Warrant
immediately prior thereto, all subject to further adjustment as provided in this
Section 5, and the successor or purchasing corporation in such reorganization,
consolidation, merger or conveyance (if other than the Company) shall duly
execute and deliver to the Registered Holder a supplement hereto acknowledging
such corporation's obligations under this Warrant; and in each such case, the
terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.

                5.4     CONVERSION OF WARRANT STOCK. In case all the authorized
Warrant Stock of the Company is converted, pursuant to the Company's Certificate
of Incorporation, into other securities or property, or the Warrant Stock
otherwise ceases to exist, then, in such case, the Registered Holder of this
Warrant, on exercise hereof at any time after the date on which the Warrant
Stock is so converted or ceases to exist (the "Termination Date") shall receive,
in lieu of the number of Shares of Warrant Stock that would have been issuable
upon such exercise immediately prior to the Termination Date (the "Former
Issuable Number of Shares of Warrant Stock"), the stock and other securities and
property to which such Registered Holder would have been entitled to


                                       4
<PAGE>

receive upon the Termination Date if such Registered Holder had exercised this
Warrant with respect to the Former Issuable Number of Shares of Warrant Stock
immediately prior to the Termination Date (all subject to further adjustment as
provided in this Warrant).

                5.5     ADJUSTMENTS TO PURCHASE PRICE. Although an adjustment to
the Purchase Price may occur pursuant to this Section 5, the aggregate purchase
price for the total number of shares of Warrant Stock purchasable hereunder (as
adjusted) shall remain the same.

        6.      NO IMPAIRMENT. The Company may not, by amendment of its
Certificate of Incorporation or Bylaws, or through reorganization,
consolidation, merger, dissolution, issue or sale of securities, sale of assets
or any other voluntary action, willfully avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but shall at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the Registered Holder against impairment. Without limiting the generality of the
foregoing, the Company (a) will not set nor increase the par value (if any par
value exists) of any shares of stock issuable upon the exercise of this Warrant
above the amount payable therefor upon such exercise, and (b) will take all such
action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and non-assessable shares of Warrant Stock upon the
exercise of this Warrant.

        7.      CERTIFICATE AS TO ADJUSTMENTS. In each case of any adjustment in
either the Purchase Price or in the number of share of Warrant Stock, or other
stock, securities or property receivable on the exercise of this Warrant, the
Treasurer of the Company shall, upon request from Registered Holder, compute
such adjustment in accordance with the terms of this Warrant and prepare a
certificate setting forth such adjustment and showing in detail the facts upon
which such adjustment is based, including a statement of the adjusted Purchase
Price. Thereafter, the Company shall cause copies of such certificate to be
mailed (by first class mail, postage prepaid) to the Registered Holder.

        8.      NOTICES OF RECORD DATE. In case:

                        (a)     The Company shall take a record of the holders
of its Warrant Stock for the purpose of entitling them to receive any dividend
or other distribution; or

                        (b)     Of any capital reorganization of the Company,
any reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation in
which holders of the Company's stock are to receive stock, securities, cash or
property of another corporation; or


                                       5
<PAGE>

                        (c)     Of any voluntary dissolution, liquidation or
winding-up of the Company; or

                        (d)     Any redemption or conversion into Common Stock
of all outstanding Warrant Stock.

then, and in each such case, the Company shall mail or cause to be mailed to the
Registered Holder of this Warrant a notice specifying, as the case may be, (a)
the date on which a record is to be taken for the purpose of such dividend or
distribution, and stating the amount and character of such dividend or
distribution, or (b) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation, winding-up,
redemption or conversion is to take place, and the time, if any is to be fixed,
as of which the holders of record of Warrant Stock shall be entitled to exchange
their shares of Warrant Stock or Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least ten
(10) days prior to the effective or record date therein specified, as
applicable. Failure to provide notice under this Section 8 or any defect therein
shall not affect the validity of any action taken in connection with such
dividend, distribution, reorganization, reclassification, consolidation, merger,
conveyance, dissolution, liquidation, winding-up, redemption or conversion.

        9.      LOSS OR MUTILATION. Upon Registered Holders delivery to the
Company of evidence reasonably satisfactory to the Company of the ownership, and
the loss, theft, destruction or mutilation, of this Warrant, and of indemnity
reasonably satisfactory to the Company, and (in the case of mutilation) upon
surrender and cancellation of this Warrant, the Company shall execute and
deliver to the Registered Holder in lieu thereof a new Warrant of like tenor.

        10.     RESERVATION OF WARRANT STOCK. If at any time the number of
authorized but unissued shares the Company's Common Stock or other securities
shall not be sufficient to effect the exercise of this Warrant, the Company
shall take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock or
other securities to such number of shares of Common Stock or other securities as
shall be sufficient for such purpose.

        11.     RESTRICTIONS ON TRANSFER.

                11.1    ACKNOWLEDGMENT, REPRESENTATION AND WARRANTIES OF
REGISTERED HOLDER. The Registered Holder understands and acknowledge that
neither this Warrant nor the shares of Warrant Stock have been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities
laws. As a condition to the issuance of this Warrant and to its exercise the
Registered Holder hereby represents and warrants to the Company that:


                                       6
<PAGE>

                        (a)     The Warrant and, if applicable, the shares of
Warrant Stock (collectively, the "Securities") have been acquired by the
Registered Holder for investment and not with a view to the sale or other
distribution thereof within the meaning of the Act and the Registered Holder has
no present intention of selling or otherwise disposing of all or any portion of
the Securities.

                        (b)     The Registered Holder has acquired the
Securities for the Registered Holder's own account only and no one else has any
beneficial ownership in the Securities.

                        (c)     The Registered Holder is capable of evaluating
the merits and risks of any investment in the Securities, is financially capable
of bearing a total loss of this investment and has either (i) a preexisting
personal or business relationship with the Company or its principals or (ii) by
reason of the Registered Holder's business or financial experience, has the
capacity to protect her or its own interest in connection with this investment.

                        (d)     The Registered Holder has had access to all
information regarding the Company, its present and prospective business, assets,
liabilities and financial condition that the Registered Holder considers
important to making the decision to acquire the Securities and has had ample
opportunity to ask questions of and receive answers from the Company's
representatives concerning an investment in the Securities and to obtain any and
all documents requested in order to supplement or verify any of the information
supplied.

                        (e)     The Registered Holder understands that the
Securities shall be deemed restricted securities under the Act and may not be
resold unless they are registered under the Act and any applicable state
securities law, or in the opinion of counsel in form and substance satisfactory
to the Company, an exemption from such registration is available.

                        (f)     The Registered Holder is aware of Rule 144
promulgated under the Act, which rule provides, in substance, that (i) after one
year from the date restricted securities have been purchased and fully paid for,
a holder may transfer restricted securities provided certain conditions are met,
e.g., certain public information is available about the Company, and specific
limitations on the amount of shares which can be sold within certain periods and
the manner in which such shares must be sold are complied with, and (ii) after
two years from the date the Securities have been purchased and fully paid for,
holders who are not "affiliates" of the Company may sell restricted securities
without satisfying such conditions.

                        (g)     The Registered Holder further understands that
if the requirements of Rule 144 are not met, registration under the Act,
compliance with Regulation A, or some other registration exemption will be
required for any disposition


                                       7
<PAGE>

of the Securities; and that, although Rule 144 is not exclusive, the SEC has
expressed its opinion that persons proposing to sell restricted securities other
than in a registered offering or other than pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and such persons and the brokers who
participate in the transactions do so at their own risk.

                11.2    SALE OR TRANSFER OF WARRANT STOCK. The Registered Holder
of this Warrant, by acceptance hereof, agrees that, absent an effective
registration statement filed with the SEC under the Act, covering the
disposition or sale of this Warrant or the Warrant Stock issued or issuable upon
exercise hereof, such Registered Holder will not sell or transfer any or all of
this Warrant or such Warrant Stock, as the case may be, without first providing
the Company with an opinion of counsel satisfactory to the Company to the effect
that such sale or transfer will be exempt from the registration and prospectus
delivery requirements of the Act, and such Registered Holder consents to the
Company making a notation on its records, or giving instructions to any transfer
agent of this Warrant, or such Warrant Stock, in order to implement this
restriction on transfer. The share certificates issued upon exercise of this
Warrant shall bear legends referring to the restrictions on transfer set forth
in this Section 11. As a condition to the transfer of this Warrant or transfer
of the shares issuable on exercise hereof, any permitted transferee must execute
and deliver to the Company representations and warranties similar to those set
forth in this Section 11.

        12.     REGISTRATION RIGHTS.

                12.1    DEFINITIONS. For purposes of this Section 12:

                        (a)     ACT. The term "Act" means the Securities Act of
1933, as amended;

                        (b)     REGISTRABLE SECURITIES. The term "Registrable
Securities" means (i) the Common Stock of the Company issuable upon exercise of
this Warrant and (ii) the Common Stock of the Company issued as (or issuable
upon the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, such Common Stock, excluding in all cases, any Registrable
Securities sold by a person in a transaction in which her rights under this
Section 12 are not assigned.

                        (c)     1934 ACT. The term "1934 Act" means the
Securities Exchange Act of 1934, as amended;

                        (d)     REGISTRATION: REGISTER OR REGISTERED. The terms
"Register," "Registered," and "Registration" refer to a registration effected by
preparing and filing a registration statement in compliance with the Act and the
declaration or ordering of the effectiveness of such registration statement;


                                       8
<PAGE>

                        (e)     REQUIRED INFORMATION. The term "Required
Information" means (i) facts or events representing a material or fundamental
change in the information included in the Registration Statement or (ii)
prospectus required by Section 19(a)(3) of the Act;

                        (f)     RULE 144. The term "Rule 144" means Rule 144 as
promulgated by the SEC under the Act, as amended from time to time, or any
similar or successor rule that may be promulgated by the SEC;

                        (g)     RULE 145. The term "Rule 145" shall mean Rule
145 as promulgated by the SEC under the Act, as amended from time to time, or
any similar or successor rule that may be promulgated by the SEC; and

                        (h)     SEC. The term "SEC" means the Securities and
Exchange Commission.

                12.2    COMPANY REGISTRATION. Subject to Section 12.6, if at any
time (but without obligation to do so), the Company proposes to Register any of
its common stock under the Act (i) in connection with an underwritten public
offering of such securities (other than a registration relating solely to the
sale of securities to employees of the Company pursuant to a stock option, stock
purchase or similar plan, or a registration relating to a Rule 145 transaction
or a registration on any form which does not include substantially the same
information as would be required to be included in a registration statement
covering the sale of the Company's common stock) on a form that would also
permit the Registration of the Registrable Securities or (ii) for the account of
a shareholder or shareholders exercising their respective registration rights
((i) and (ii) above shall be considered a "Company Registration"), the Company
shall, each such time, promptly give Registered Holder written notice of such
determination. Upon the written request of Registered Holder given within twenty
(20) days after the mailing of any such notice by the Company in accordance with
Section 13.3, the Company shall, subject to the provisions of Section 12.6 and
subject to any rights the Company may have, pursuant to the terms of other
registration rights agreements the Company has entered into or otherwise, to
withdraw, suspend or otherwise terminate a Registration Statement for a Company
Registration, cause to be Registered all of the Registrable Securities that
Registered Holder requested be Registered.

                12.3    REGISTRATION PROCEDURES. Whenever required under Section
12.2 to use its best efforts to effect the Registration of any Registrable
Securities, the Company shall accomplish the following as expeditiously as
reasonably possible:

                        (a)     REGISTRATION STATEMENT. Prepare and file with
the SEC a registration statement with respect to such Registrable Securities
("Registration Statement") and use its best efforts to cause such Registration
Statement to become and remain effective. In connection with any proposed
Registration intended to permit


                                       9
<PAGE>

an offering of any securities from time to time, the Company shall not be
obligated to cause any such Registration to remain effective (i) for more than
one hundred and twenty (120) days nor (ii) until the Registered Holder has
completed the distribution; provided, that such one hundred twenty (120) day
period shall be extended for such period of time as the Registered Holder
refrains from selling any securities included in such Registration at the
request of an underwriter of common stock or other securities of the Company;

                        (b)     AMENDMENTS. Prepare and file with the SEC such
amendments and supplements to such Registration Statement as may be necessary to
comply with the provisions of the Act for the disposition of securities covered
by such Registration Statement;

                        (c)     COPIES. Furnish to Registered Holder copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act and all applicable SEC rules and regulations, and such
other documents as the Registered Holder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by Registered Holder,
including without limitation an earnings statement which satisfies the
provisions of Section 11 (a) of the Act; and

                        (d)     BLUE SKY. Use its best efforts to Register and
qualify the securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as shall reasonably be
appropriate for the distribution of the securities covered by the Registration
Statement; provided, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdictions. If any
jurisdiction in which the securities shall be qualified shall require that
expenses incurred in connection with the qualification of the securities in the
jurisdiction be borne by the selling shareholders, then expenses shall be
payable by the selling shareholders pro rata, to the extent required by such
jurisdiction.

                12.4    REGISTERED HOLDER INFORMATION. As a condition precedent
to the obligations of the Company to take any action pursuant to this Agreement,
the Registered Holder shall furnish to the Company such information regarding
Registered Holder, the Registrable Securities held by Registered Holder, and the
intended method of disposition of such securities as the Company shall
reasonably request and as shall be required in connection with the action to be
taken by the Company.

                12.5    REGISTRATION EXPENSES. The Company shall bear all
expenses of Registration (excluding underwriting discounts and the legal fees of
counsel separately retained by the selling Registered Holder and expenses
directly incurred by the selling Registered Holder). Such expenses of
Registration shall include without limitation, Registration, qualification and
filing fees and legal fees of the Company. All underwriting discounts with
respect to such shares shall be borne by the Registered Holder requesting
registration.


                                       10
<PAGE>

                12.6    UNDERWRITING REQUIREMENTS. In connection with any
offering involving an underwriting of shares being issued by the Company, the
Company shall not be required under Section 12.2 to include any of the
Registered Holder's Registrable Securities in such underwriting unless the
Registered Holder accepts the terms of the underwriting as agreed upon between
the Company and the underwriters selected by it and then only in such quantity
as will not, in the written opinion of the underwriters or the Company,
jeopardize the success of the offering by the Company. If the total amount of
securities that the Registered Holder requests to be included in such offering
exceeds the amount of securities that the underwriters or the Company reasonably
believe to be compatible with the success of the offering, the Company shall
only be required to include in the offering so many of the securities of the
selling Registered Holder as the underwriters or the Company believe will not
jeopardize the success of the offering determined as provided in Section 12.7
below.

                12.7    ALLOCATION OF RIGHTS. Except as may otherwise be
required under any other agreement to which the Company is a party on the date
of this Warrant, if the total number of shares of Registrable Securities and
other common stock with registration rights (including common stock to be
received upon conversion of convertible securities) ("Other Shares") exceeds the
number of shares to be included in a Registration, then the number of shares of
Registrable Securities and Other Shares to be included in the Registration shall
be allocated among the Registered Holder of the Registrable Securities and
shareholders of the Other Shares who hold similar or greater registration rights
on the basis of the proportionate number of shares held by such Registered
Holder (assuming full conversion). If any Registered Holder or other selling
shareholder does not request inclusion of the maximum number of shares of
Registrable Securities and Other Shares allocated to Registered Holder, then the
remaining portion of Registered Holders allocation shall be reallocated among
those requesting Registered Holders and other selling shareholders whose
allocations did not satisfy their requests on the basis of the number of shares
of Registrable Securities and Other Shares held by such Registered Holders and
other selling shareholders (assuming full conversion). This procedure shall be
repeated until all Registrable Securities and Other Shares, which may be
included in the Registration, have been so allocated.

                12.8    NO DELAY OF REGISTRATION. No Registered Holder shall
have any right to take any action to restrain, enjoin, or otherwise delay any
Registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Agreement.

                12.9    INDEMNIFICATION. In the event any Registrable Securities
is included in a Registration Statement pursuant to this Agreement:

                        (a)     INDEMNIFICATION BY THE COMPANY. To the extent
permitted by law, the Company shall indemnify and hold harmless Registered
Holder requesting or


                                       11
<PAGE>

joining in a Registration, any underwriter (as defined in the Act) for it, and
each person, if any, who controls such Registered Holder or underwriter within
the meaning of the Act, against any losses, claims, damages or liabilities,
joint or several, to which they may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) (i) arise out of or are based on any untrue or alleged untrue statement
of any material fact contained in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendments
or supplements thereto, (ii) arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) arise out
of any violation by the Company of any rule or regulation promulgated under the
Act applicable to the Company and relating to action or inaction required of the
Company in connection with any such Registration. In such event the Company
shall reimburse each such Registered Holder, such underwriter or controlling
person for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this
Section 12.9(a) shall not apply to (i) amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld)
nor (ii) any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in connection with such Registration
Statement, preliminary prospectus, final prospectus or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
expressly for use in connection with such Registration by any such Registered
Holder.

                        (b)     INDEMNIFICATION BY REGISTERED HOLDER. To the
extent permitted by law, each Registered Holder requesting or joining in a
Registration will indemnify and hold harmless the Company, each of its officers,
legal counsel and directors, and each person, if any, who controls the Company
within the meaning of the Act and each agent, any underwriter (within the
meaning of the Act) for the Company or such other holders, any person who
controls such underwriter and any other holder of selling securities in such
Registration Statement or any of its officers or directors or any person who
controls such holder against any losses, claims, damages or liabilities (joint
or several) to which the Company or any such director, officer, legal counsel,
controlling person, agent or underwriter may become subject, under the Act, the
1934 Act or other federal or state law, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereto) arise out of or
are based upon (i) any untrue or alleged untrue statement of any material fact
contained in such Registration Statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or (iii) arise out of any violation by the Registered Holder of any rule or
regulation promulgated under the Act applicable to the Registered Holder and
relating to action or inaction required of the Registered Holder in connection


                                       12
<PAGE>

with any such Registration, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and in
conformity with written information furnished by such Registered Holder
expressly for use in connection with such registration. Such Registered Holder
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, legal counsel, controlling person, agent or
underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action;

                        (c)     NOTICE. Promptly after receipt by an indemnified
party under this Section 12.9 of notice of the commencement of any action
(including any government action), such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party under this Section,
notify the indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in and, jointly with any
other indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, if
representation jointly would be inappropriate due to potential differing
interests between such parties in such proceeding, either party may retain
counsel of its own. The failure to notify an indemnifying party promptly of the
commencement of any such action, if prejudicial to her or its ability to defend
such action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section, but the failure to notify the indemnifying
party shall not relieve him of any liability that the indemnifying party may
have to any indemnified party otherwise than under this Section 12.9; and

                        (d)     CONTRIBUTION. If the indemnification provided
for in this Section 12.9 is, held by a court of competent jurisdiction to be
unavailable to an indemnified party hereunder with respect to any loss,
liability, claim, damage or expense, then the indemnifying party, in lieu of
indemnifying such indemnified party shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability, claim,
damage or expense in such proportion as is appropriate to reflect the relative
fault of the indemnifying party and of the indemnified party in connection with
the statement or omissions that resulted in such loss, liability, claim, damage
or expense as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party, and the
opportunity to correct or prevent such statement or omission. Such allocation
shall be consistent with the principles of indemnification provisions under
Sections 12.9 (a) and (b) above.

                12.10   TERMINATION OF THE COMPANY'S OBLIGATIONS. The right of
any Registered Holder to request Registration pursuant to this Agreement shall
terminate on, or on the first date after, the closing of the first Registered
public offering of the


                                       13
<PAGE>

Company's common stock initiated by the Company if all shares of Registrable
Securities held or entitled to be held upon conversion by such Registered Holder
may immediately be sold under Rule 144 of the Act during any ninety (90)-day
period.

                12.11   REPORTS UNDER 1934 ACT. In order to allow the Registered
Holders the benefits of Rule 144 promulgated under the Act and any other rule or
regulations of the SEC that may at any time permit the Registered Holder to sell
securities of the Company to the public without Registration, the Company agrees
to use its best efforts to:

                        (a)     PUBLIC INFORMATION. Make and keep public
information available, as those terms are understood and defined in Rule 144;

                        (b)     FILING. File with the SEC in a timely manner all
reports and other documents required of the Company under the Act and the 1934
Act; and

                        (c)     COPIES OF REPORTS. Furnish upon request to any
Registered Holder, so long as such Registered Holder owns any Registrable
Securities: (i) a written statement by the Company that the Company has complied
with the reporting requirements of Rule 144, the Act and the 1934 Act (at any
time after it has become subject to such reporting requirements); (ii) a copy of
the most recent annual or quarterly report of the Company; and (iii) such other
reports and documents so filed by the Company as may be reasonably requested in
availing any Registered Holder of any rule or regulation of the SEC permitting
the selling of any such securities without Registration.

                12.12   LOCKUP AGREEMENT. Upon the request of the Company or the
underwriters managing any firm commitment underwritten offering of the Company's
securities, in connection with any Registration, each Registered Holder agrees
that it shall not, sell or otherwise dispose of any Registrable Securities
during a period of up to one-hundred and eighty days (or more if requested by
the underwriter or the Company) following the effective date of a registration
statement; provided that such agreement shall only apply to the first such
Registration including securities sold on behalf of the Company to the public in
an underwritten offering. The obligations of the Registered Holders under this
paragraph 12.12 shall not apply to a registration relating solely to employee
benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated
in the future. The Company may impose stop-transfer instructions with respect to
all shares (or securities) subject to the foregoing restriction until the end of
such one hundred eighty (180)-day period (or such longer period). Registered
Holder will not be required to lockup Registrable Securities on terms less
favorable than the terms of lockup agreements with the Company's officers and/or
directors.

                12.13   NO LIMITATION ON FUTURE REGISTRATION RIGHTS. Other than
the obligations imposed hereunder on the Company to allocate registration
rights, the


                                       14
<PAGE>

Company shall not be restricted from granting any form of registration rights to
any person.

                12.14   TRANSFER OF REGISTRATION RIGHTS. The registration
rights of Registered Holder under this Agreement may be transferred to any
transferee who acquires from Registered Holder shares representing at least
one percent (1%) of the issued and outstanding Shares of the Company;
provided, that the Company is given written notice by the Registered Holder
at the time of such transfer stating the name and address of the transferee
and identifying the securities with respect to which the rights under this
Agreement are being assigned.

        13.     GENERAL PROVISIONS.

                13.1    NO RIGHTS OR LIABILITIES AS SHAREHOLDER. This Warrant
does not by itself entitle the Registered Holder to any voting rights or other
rights as a shareholder of the Company. In the absence of affirmative action by
Registered Holder to purchase Warrant Stock by exercise of this Warrant, no
provisions of this Warrant, and no enumeration herein of the rights or
privileges of the Registered Holder shall cause such Registered Holder to be a
shareholder of the Company for any purpose by virtue hereof.

                13.2    AMENDMENT. The provisions of this Agreement may be
modified at any time by agreement of the parties. Any such agreement hereafter
made shall be ineffective to modify this Agreement in any respect unless in
writing and signed by the parties against whom enforcement of the modification
or discharge is sought.

                13.3    NOTICES. Any notice under this Agreement shall be in
writing, and any written notice or other document shall be deemed to have been
duly given (i) on the date of personal service on the parties, (ii) on the third
business day after mailing, if the document is mailed by registered or certified
mail, (iii) one day after being sent by professional or overnight courier or
messenger service guaranteeing one-day delivery, with receipt confirmed by the
courier, or (iv) on the date of transmission if sent by telegram, telex,
telecopy or other means of electronic transmission resulting in written copies,
with receipt confirmed. Any such notice shall be delivered or addressed to the
parties at the addresses set forth below or at the most recent address specified
by the addressee through written notice under this provision:




                                       15
<PAGE>


If to the Company:

Daniel McPeak, Chief Executive Officer
The RiceX Company
1241 Hawk's Flight Court, Suite 103
El Dorado Hills, CA 95762
Fax: (916) 933-3232

If to the Registered Holder:

Edward G. Newton
1044 Callander Way
Folsom, CA  95630

Failure to conform to the requirement that mailings be done by registered or
certified mail shall not defeat the effectiveness of notice actually received by
the addressee.

                13.4    CHANGE; WAIVER. Any of the terms or conditions of this
Agreement may be waived at any time by the party entitled to the benefit
thereof, but no such waiver shall affect or impair the right of the waiving
party to require observance, performance or satisfaction either of that term or
condition as it applies on a subsequent occasion or of any other term or
condition.

                13.5    HEADINGS. The headings in this Warrant are for purposes
of convenience and reference only, and shall not be deemed to constitute a part
hereof.

                13.6    LAW GOVERNING. The rights and obligations of the parties
and the interpretation and performance of this Agreement shall be governed by
the law of California, excluding its conflict of laws rules

                13.7    INTEGRATION. This Agreement constitutes the entire
agreement between the Company and the Registered Holder with respect to the
subject matter hereof. Any previous agreement between the Company and the
Registered Holder is superseded by this Agreement. Subject to the exceptions
specifically set forth in this Agreement, the terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
heirs, successors, administrators, executors and assigns of the parties hereto.

                13.8    COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of, which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


                                       16
<PAGE>

                13.9    Severability. If any provision of this Agreement is
adjudicated by a court of competent jurisdiction to be invalid or unenforceable,
the remainder of the Agreement which can be given full force and effect without
the invalid provision shall continue in full force and effect and shall in no
way be impaired or invalidated.

Dated: As of March 31, 2000

                                   COMPANY

                                   The RiceX Company, a Delaware corporation

                                   By:  /s/ DANIEL L. MCPEAK
                                      -------------------------

                                   its: CEO
                                       ------------------------


                                   REGISTERED HOLDER

                                   /s/ EDWARD G. NEWTON
                                   -----------------------------
                                    Edward G. Newton




                                       17
<PAGE>

                                    EXHIBIT 1
                                SUBSCRIPTION FORM

                 (To be executed only upon exercise of Warrant)

        The undersigned Registered Holder of this Warrant irrevocably exercises
this Warrant for the purchase of __________ shares of __________ Stock of
__________, purchasable with this Warrant, and herewith makes payment therefor,
all at the price and on the terms and conditions specified in this Warrant. The
representations and warranties of the undersigned contained in Section 11 of
this Warrant continue to be true and complete on the date hereof.

        Dated:  ________________

                                              _______________________________
                                              Signature of Registered Holder

                                              _______________________________
                                              Street Address

                                              _______________________________
                                              City, State, Zip




                                       18
<PAGE>

                               FORM OF ASSIGNMENT

         FOR VALUE RECEIVED the undersigned Registered Holder of this Warrant
hereby sells, assigns and transfers unto the Assignee named below in accordance
with the terms and conditions of the Warrant, all of the rights of the
undersigned under the within Warrant, with respect to the number of shares of
Warrant Stock set forth below:


        Name of Assignee            Address          Number of Shares
        ----------------            -------          ----------------





and does hereby irrevocably constitute and appoint ____________ Attorney to make
such transfer on the books of __________ maintained for the purpose, with full
power of substitution in the premises.


         Dated:  __________________________


                                            By:  ____________________________
                                                     (Registered Holder)

                                            Name:  __________________________

                                            Title: __________________________






                                       19