<PAGE>

                        AMENDED AND RESTATED LOAN AGREEMENT

          This Amended and Restated Loan Agreement (the "Agreement"), is made
     and entered into as of December 31, 1998, by and between The RiceX Company,
     a Delaware corporation ("Borrower"), and FoodCeuticals, LLC, a Delaware
     limited liability company, and its assigns or transferees pursuant to
     Section 5.5 ("Lender"), and sets forth the terms and conditions of the loan
     (the "Loan") evidenced by the Borrower's promissory notes, substantially in
     the form attached hereto as Exhibit A (collectively, the "Notes").

          WHEREAS, Borrower desires to enter into the Loan, and Lender desires
     to make the Loan on the terms and subject to the conditions set forth
     herein.

          WHEREAS, the obligations of the Borrower under the Loan are secured by
     those certain Security Documents between Borrower and Lender or Lender's
     wholly owned subsidiary dated this date substantially in the forms listed
     on Schedule A and attached hereto as Exhibits C (the "Security Documents").

          WHEREAS, Borrower and Lender desire to make certain representations,
     warranties and agreements in connection with the Loan.

          WHEREAS, the outstanding principal of the Loan is to bear interest at
     the rate of 18 % per annum with such interest to be prepaid at the time of
     each advance under this Loan Agreement in shares (the "Shares") of the
     Borrower's Common Stock, $.001 par value (the "Common Stock") on the basis
     of 50,847.5 shares for each $100,000 advanced, in accordance with Section
     1.2 of this Agreement and Section 2.1 of the Note.

          WHEREAS, as and for a charge for placing and procuring the Loan as of
     the date hereof, Borrower has agreed to issue to Lender warrants (the
     "Warrants") to purchase 202,353.5 shares of Common Stock for each $100,000
     advanced (which amount shall be rounded to the nearest whole share) (the
     Warrant is in the form of Exhibit B hereto) , in accordance with Section
     1.2 of this Agreement and Section 2.1 of the Note.

          WHEREAS, Borrower desires to grant to Lender certain registration
     rights in respect of the Shares and the Common Stock that may be acquired
     on the exercise of the Warrant (the "Warrant Shares"), which registration
     rights shall have the terms and be subject to the conditions set forth in
     the Registration Rights Agreement dated this date substantially in the form
     attached hereto as Exhibit D (the "Registration Rights Agreement").

<PAGE>

          WHEREAS, this Agreement, the Notes, the Warrant, the Security
     Documents, and the Registration Rights Agreement are collectively referred
     to herein as the "Transaction Documents".

          NOW, THEREFORE, in consideration of the premises and the
     representations, warranties and agreements herein, the parties agree as
     follows:



                                     ARTICLE I
                                      THE LOAN

          1.1  BORROWINGS UNDER THE LOAN.  Subject to the terms of this Loan
     Agreement, Lender agrees to loan to the Borrower at the Closing (as defined
     herein), the sum of up to $1,850,000, of which the sum of $1,200,000 is to
     be advanced at the Closing and the balance shall be advanced not later than
     January 15,1999.  All advances by Lender to Borrower shall be made by check
     or wire transfer to the account of the Borrower.

          1.2  PREPAID INTEREST; WARRANT.  The Loan is to bear interest at the
     rate of 18% per annum.  Interest is to be prepaid by delivery of the Shares
     at the time of each advance of the Loan, in accordance with Section 2.1 of
     the Note. The applicable Warrants shall be delivered on the date of each
     advance, in accordance with Section 2.1 of the Note.

          1.3  FUTURE FINANCINGS.  During the time that the Loan remains
     outstanding, Borrower shall consult with Lender with respect to any
     additional equity or debt financings of Borrower and shall initially
     negotiate in good faith with Lender to provide any such financings prior to
     engaging in negotiations with any other party.





                                     ARTICLE II
                     REPRESENTATIONS AND WARRANTIES OF BORROWER

          Borrower represents and warrants to Lender that each of the following
     statements, except as set forth in the Borrower SEC Documents (as defined
     below), (i) are true and correct on the date hereof and (ii) will be true
     and correct in all material respects on the date each advance hereunder is
     made:


                                        -2-

<PAGE>

          2.1  ORGANIZATION, STANDING AND QUALIFICATION.  Borrower is a
     corporation duly organized, validly existing and in good standing under the
     laws of the state of its incorporation and has all requisite corporate
     power and authority to own, lease and operate its properties and to carry
     on its business as it is now being conducted. Borrower is licensed and
     qualified to do business as a foreign corporation in each jurisdiction in
     which the character of its properties, owned or leased, or the nature of
     its activities makes such qualification or license necessary, except where
     the failure to be so licensed or qualified would not have a material
     adverse effect on the business of the Borrower.  For purposes of this
     agreement "Material Adverse Effect" means a material adverse effect on the
     business, properties, assets, financial condition, liabilities or
     operations of a Person or its Subsidiaries taken as a whole.

          2.2  AUTHORITY; NO DEFAULTS.  Borrower has all requisite corporate
     power and authority to enter into the Transaction Documents and to
     consummate the transactions contemplated thereby. The execution and
     delivery of the Transaction Documents and the consummation of the
     transactions contemplated thereby have been duly authorized by all
     necessary corporate action on the part of Borrower.  The Transaction
     Documents have been executed and delivered by Borrower and constitute the
     valid and binding obligation of Borrower, enforceable in accordance with
     their terms, subject to bankruptcy, insolvency, moratorium and other
     similar laws affecting creditors' rights generally and general principles
     of equity (regardless of whether such enforceability is considered in a
     proceeding in equity or at law).  The execution and delivery of the
     Transaction Documents do not, and the consummation of the transactions
     contemplated hereby and thereby will not, conflict with or result in a
     breach of or the acceleration of any obligation under, or constitute a
     default or event of default (or event which, with notice or lapse of time
     or both, would constitute a default or event of default) under, any
     provision of any charter, bylaw, indenture, mortgage, lien, lease,
     agreement, contract, instrument, order, judgment, decree, ordinance or
     regulation, or any restriction to which any property of Borrower is subject
     or by which Borrower is bound, the effect of which would be materially
     adverse to Borrower.  Borrower is not, nor does Borrower have knowledge
     that it is alleged to be, in material violation or default of any
     applicable law, statute, order, rule or regulation promulgated or judgment
     entered by any court, administrative agency or commission or other
     governmental agency or instrumentality, domestic or foreign (a
     "Governmental Entity"), relating to or affecting the operation, conduct or
     ownership of the property or business of Borrower.

          2.3  APPROVALS.  There is no legal impediment to the execution and
     delivery of the Transaction Documents by Borrower or to the consummation of
     the transactions contemplated thereby, and no filing or registration with,
     or authorization, consent or approval of, a Governmental Entity,
     shareholders or any other third party is necessary for the consummation by
     Borrower of the transactions contemplated thereby.


                                        -3-

<PAGE>
          2.4  CHARTER AND BYLAWS.  Borrower has furnished to Lender true and
     complete copies of its charter and bylaws, each as amended to date and as
     presently in effect.




          2.5  SEC DOCUMENTS.

          (a)  Borrower has made all filings with the Securities and
          Exchange Commission ("SEC") that it has been required to make
          under the Securities Act of 1933, as amended (the "Securities
          Act"), and the Securities Exchange Act of 1934, as amended (the
          "Exchange Act") since May 18, 1998. Lender has been provided with
          the opportunity to review true, complete and correct copies of
          Borrower's registration statement on Form 10-SB ("Form 10-SB"),
          together with all amendments and exhibits thereto thereto,
          Borrower's quarterly report on Form 10-QSB for the fiscal quarter
          ended September 30, 1998, together with all amendments and
          exhibits thereto, and all other filings with the SEC made by
          Borrower (including all exhibits to such filings) since the
          filing of said Form 10-QSB (all such documents that have been
          filed with the SEC, as amended, are referred to as the "Borrower
          SEC Documents"). Lender has reviewed the Borrower SEC Documents
          to its satisfaction.  As of their respective dates, and except as
          amended, Borrower SEC Documents complied in all material respects
          with the requirements of the Securities Act or the Exchange Act,
          as the case may be, and none of Borrower SEC Documents contained
          any untrue statement of a material fact or omitted to state a
          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 misleading.

          (b)  The financial statements of Borrower included in the
          borrower SEC Documents comply as to form in all material respects
          with applicable accounting requirements and with the published
          rules and regulations of the SEC with respect thereto, have been
          prepared in accordance with generally accepted accounting
          principles ("GAAP") applied on a consistent basis during the
          periods involved (except as may be indicated in the notes thereto
          or, in the case of the unaudited statements, as permitted by Form
          10-QSB) and fairly present (subject, in the case of the unaudited
          statements, to normal recurring audit adjustments) the
          consolidated financial position of Borrower as of the dates
          thereof and the consolidated results of its operations and cash
          flows for the periods then ended.


                                        -4-

<PAGE>

          Since September 30, 1998, (i) there have been no material adverse
          changes in Borrower's business, operations or financial condition and
          (ii) Borrower's operations have been conducted in the ordinary course
          of business except as disclosed in writing to Lender.

          2.6  LITIGATION.  As of the date of this Agreement, there is no suit,
     action, proceeding or investigation pending or, to the best knowledge of
     Borrower, threatened against or affecting Borrower, except for litigation
     arising in the ordinary course of Borrower's business which is neither
     material with respect to any individual action nor material with respect to
     all such actions in the aggregate, nor is there any outstanding judgment,
     order, writ, injunction or decree against Borrower, which judgment would
     have a material adverse effect on Borrower.  Borrower is not subject to any
     court order, writ, injunction, decree, settlement agreement or judgment
     that contains or orders any on-going obligations, whether prohibitory or
     mandatory in nature, the performance of which would have a material adverse
     effect on Borrower.

          2.7  CAPITALIZATION.  Borrower has authorized capital stock of (a)
     100,000,000 shares of Common Stock, par value $.001 per share, of which, as
     of the date hereof, there are 19,805,500 shares issued and outstanding, and
     (b) shares of preferred stock, par value $.001 per share, of which, as of
     the date hereof, there are no shares issued and outstanding.  All of the
     issued and outstanding shares of Common Stock were duly and validly issued
     and are fully paid and non-assessable.  None of the outstanding shares of
     Common Stock has been issued in violation of any preemptive rights of the
     current or past stockholders of Borrower.  As of the date hereof, Borrower
     has reserved for issuance an aggregate of 7,239,000 shares of Common Stock
     issuable on the exercise of outstanding warrants, options, or conversion of
     convertible securities (including shares issuable to CF Corporation) other
     than those issuable on exercise of the Warrants.  Except as described above
     or in the Borrower SEC Documents, there are no outstanding options,
     warrants or rights to subscribe for, or commitments of any character
     whatsoever relating to, or securities or rights convertible into or
     exchangeable for, shares of the capital stock of Borrower or contracts,
     commitments, understandings or arrangements by which Borrower is or may be
     obligated to issue additional shares of its capital stock or options,
     warrants, or rights to purchase or acquire any additional shares of its
     capital stock.  All of the Shares and the Warrant Shares will be fully
     paid, non-assessable and free and clear of any Encumbrances.  As used in
     this Agreement, the term "Encumbrance" means and includes (i) any security
     interest, mortgage, deed of trust, lien, charge, pledge, proxy, adverse
     claim, equity, power of attorney, or restriction of any kind, including but
     not limited to, any restriction or servitude on the use, transfer, receipt
     of income, or other exercise of any attributes of ownership, and (ii) any
     Uniform Commercial Code financing statement or other public filing, notice
     or record that by its terms purports to evidence or notify interested
     parties of any of the matters


                                        -5-

<PAGE>

      referred to in clause (i) that has not been terminated or released by
     another proper public filing, notice or record.

          2.8  SUBSIDIARIES. Food Extrusion Montana, Inc., a Montana corporation
     ("Subsidiary"), is the only Subsidiary of Borrower.  The address of its
     principal executive office is 2400 Airport Road, Dillon, Montana.  The
     Subsidiary is a corporation duly organized, validly existing and in good
     standing under the laws of the jurisdiction of its organization, has all
     requisite corporate power and authority to own, to lease or to operate its
     properties and to carry on its business as it is now being conducted and is
     duly qualified or licensed to do business in each jurisdiction in which the
     character of its properties, owned or leased, or the nature of its
     activities makes such qualification or license necessary, unless the
     failure to be so licensed or qualified would not have a material, adverse
     effect on Borrower. All outstanding shares of capital stock of the
     Subsidiary were duly and validly issued and are fully paid, non-assessable
     and owned by Borrower, free and clear of all Encumbrances.  There are no
     options, warrants or other rights, agreements or commitments (including
     preemptive rights) obligating Borrower or the Subsidiary to issue, to sell
     or to transfer any shares of capital stock or other securities of the
     Subsidiary.  There one (1) share of capital stock of Subsidiary issued and
     outstanding.

          2.9  LIABILITIES.  Borrower has no liabilities or obligations, either
     accrued, absolute, contingent, or otherwise that have a Material Adverse
     Effect, and Borrower has no knowledge of any potential liability that it
     reasonably believes would likely result in a Material Adverse Effect, other
     than those (a) reflected or reserved against in the balance sheets reported
     on Borrower's Form 10-QSB for the fiscal quarter ended September 30, 1998,
     or (b) incurred in the ordinary course of business since September 30,
     1998.

          2.10 LICENSES, PERMITS, AUTHORIZATIONS, ETC.  Borrower holds all
     material approvals, authorizations, consents, licenses, orders, franchises,
     rights, registrations and permits of any type required to operate its
     business as presently conducted.  The execution and delivery of this
     Agreement and the consummation of the transactions contemplated hereby will
     not result in any revocation, cancellation, suspension or modification of
     any such approval, authorization, consent license, order, franchise, right,
     registration or permit.

          2.11 TITLE TO ASSETS; ENCUMBRANCES.

               (a)  Borrower has good and indefeasible title to its assets,
          whether real, personal or intangible, free and clear of all
          Encumbrances except (i) liens for current taxes and assessments
          not yet due or being contested in good faith by appropriate
          proceedings, (ii) mechanic's liens arising under the operation of
          law for actions contested in good faith or for which payment
          arrangements have been

                                        -6-

<PAGE>

          made, (iii) liens granted or incurred by Borrower in the ordinary
          course of its business or financing of equipment, office space,
          furniture and computers in the ordinary course of its business, and
          (iv) easements, rights of way, encroachments or other restrictions or
          matters affecting title which do not prevent the assets from being
          used for the purpose for which they are currently being used;

               (b)  There are no parties in possession of any of the assets
          of Borrower other than personal property held by third parties in
          the reasonable and ordinary course of business.  Borrower enjoys
          full, free and exclusive use and quiet enjoyment of its assets
          and its rights pertaining thereto.  Borrower enjoys peaceful and
          undisturbed possession under all leases under which it is a
          lessee, and all such leases are legal, valid and binding
          obligations of Borrower, enforceable against Borrower in
          accordance with its terms.

           2.12     TAXES AND RETURNS.  Borrower has filed all required tax
     returns and reports.  Borrower has paid all taxes, assessments and
     governmental charges and penalties which it has incurred, except such as
     are being or may be contested in good faith by appropriate proceedings.
     Borrower is not delinquent in the payment of any tax, assessment or
     governmental charge.  No deficiencies for any taxes have been proposed,
     asserted, or assessed against Borrower, and no requests for waivers of the
     time to assess any such tax are pending.  For the purposes of this
     Agreement, the term "tax" (including, with correlative meaning, the terms
     "taxes" and "taxable") shall include all federal, state, local and foreign
     income, profits, franchise, gross receipts, payroll, sales, employment,
     use, property, withholding, excise and other taxes, duties or assessments
     of any nature whatsoever, together with all interest, penalties and
     additions imposed with respect to such amounts.

           2.13     INSURANCE.  Each policy of property, fire and casualty,
     product liability, worker's compensation, professional liability and title
     insurance and other forms of insurance (except group, health and life
     policies) and each bond issued or posted by any person with respect to any
     operations or other activities of Borrower is, to the knowledge of
     Borrower, the legal, valid and binding obligation of the insurer or bond
     issuer, enforceable in accordance with its terms, and is in an amount and
     provides for coverage as is customary in the ordinary business practices of
     Borrower's industry.

          2.14 PATENTS, TRADEMARKS, ETC.  Schedule 2.14 lists all patents,
     trademarks, service marks, works of authorship, tradenames, brandnames or
     copyrights.  Such patents, trademarks, service marks, works of authorship,
     tradenames, brandnames, and copyrights are referred to as the "Intellectual
     Property".  Borrower is not using, and does not have any plan to
     manufacture, use or sell anything which would violate or infringe on any
     patent or proprietary right (of which


                                        -7-
<PAGE>

     Borrower is aware) of any other person, firm or corporation or which would
     require a license under any such patent or proprietary right.  Borrower has
     not received any communications alleging that Borrower has violated or, by
     conducting its business as proposed, would violate any of the patents,
     trademarks, service marks, tradenames, copyrights, works of authorship or
     trade secrets or other proprietary rights in processes of any other person
     or entity.

          2.15 MATERIAL CONTRACTS AND OBLIGATIONS.  Borrower has provided Lender
     an opportunity to review, and Lender has reviewed to its satisfaction all
     material agreements of any nature to which Borrower is a party or by which
     it or any of its properties is bound, all employment and consulting
     agreements, loan agreements, leases, purchase contracts, employee benefit,
     bonus, pension, stock option, stock purchase and similar plans and
     arrangements, and distributor and sales representative agreements.  True
     and complete copies of such written agreements have been provided to
     Lender.  All such agreements and contracts are valid, binding and in full
     force and effect.  Borrower is not in default on any of such agreements.

          2.16 COMPLIANCE.  Borrower has complied in all material respects with
     all laws, and is not in violation of any charter or other corporate
     restrictions or any law, ordinance, requirement, regulation, judgment,
     injunction, award, decree, or other order applicable to its business.
     There is no term or provision of any mortgage, indenture, contract,
     agreement or instrument to which Borrower is a party or by which it is
     bound, any provision of any state or federal judgment, decree, order,
     injunction, writ, statute, rule or regulation applicable to or binding upon
     Borrower, which would have a Materially Adverse Effect on Borrower.  To the
     knowledge of Borrower, no employee of Borrower is in violation of any term
     of any employment contract, patent or other proprietary information
     disclosure agreement or any other contract or agreement relating to the
     employment of such employee with Borrower.

          2.17 EMPLOYEES.  Borrower has obtained agreements, which contain
     nondisclosure and assignment of invention provisions and non-competition
     provisions, from each of its employees and consultants whose
     responsibilities require access to confidential and proprietary information
     of Borrower.  Borrower has complied in all material respects with all
     applicable and material state and federal laws respecting employment and
     employment practices, terms and conditions of employment, wages and hours
     and other laws related to employment, and there are no arrears in the
     payment of wages, or social security taxes.

          2.18 TRANSACTIONS WITH AFFILIATES AND STOCKHOLDERS.  No stockholder,
     officer, director or employee of Borrower, nor any "affiliate" or
     "associate" of such persons (as such terms are defined in the rules and
     regulations promulgated under the Securities Act), is presently a party to
     any transaction with Borrower, including without limitation, any contract,
     agreement or other


                                        -8-
<PAGE>

     arrangement providing for the employment of, furnishing of services by,
     rental of real or personal property from or otherwise requiring payments
     to, any such person or entity.

          2.19 BOOKS AND RECORDS.  The minute books of Borrower furnished to
     counsel to Lender for review contain complete and accurate records of all
     meetings and other corporate actions of its stockholders and its Board of
     Directors and committees thereof.  The stock ledger and stock transfer
     records of Borrower furnished by American Stock Transfer & Trust Company to
     counsel to Lender for review is complete and reflects all issuances,
     transfers of which Borrower is aware, repurchases and cancellations of
     shares of capital stock of Borrower.

          2.20 STOCKHOLDER AGREEMENTS.  There are no agreements, written or
     oral, which are (i) between Borrower and any holder of its capital stock,
     or (ii) to the knowledge of Borrower, among any persons holding five
     percent (5%) or more of Borrower's capital stock, relating to the
     acquisition, disposition or voting of the capital stock of Borrower.

          2.21 ERISA.  Borrower has no employee benefit plans subject to the
     Employment Retirement Income Security Act of 1974.

          2.22 ACCOUNTS RECEIVABLE.  All accounts receivable of Borrower
     (including those reflected on the Balance Sheet or acquired on or prior to
     the Closing Date) arose in the ordinary and usual course of business of
     Borrower, represent valid obligations due to Borrower and have been
     collected or are, to Borrower's best knowledge, collectible in the ordinary
     and usual course of business of Borrower in the aggregate recorded amounts
     thereof in accordance with their terms less in the case of accounts
     receivable reflected in the Financial Statements, all allowance for
     doubtful accounts marked therein, and in the case of accounts receivable
     thereafter, all allowances for doubtful accounts consistent with past
     practices of Borrower.

          2.23 HAZARDOUS WASTES AND SUBSTANCES.  Neither the operations of
     Borrower nor the use of its assets violates any applicable federal, state
     or local law, statute, ordinance, rule, regulation, memorandum of
     understanding, order or notice requirement pertaining to the collection,
     transportation, storage, treatment, discharge, release or disposal of
     hazardous or non-hazardous waste or substances, including without
     limitation (i) the Comprehensive Environmental Response, Compensation and
     Liability Act of 1980 (42 U.S.C, Sections 9601 ET SEQ.), as amended from
     time to time on or before the Closing Date ("CERCLA") (including, without
     limitation, as amended pursuant to the Superfund Amendments and
     Reauthorization Act of 1986), and such regulations promulgated under CERCLA
     on or before the Closing Date, (ii) the Resources Conservation and Recovery
     Act of 1976 (42 U.S.C. Sections 6901 ET SEQ.), as amended from time to time
     ("RCRA") on or before the Closing Date, and such regulations promulgated
     under RCRA, or (iii) any applicable federal, state or local laws or
     regulations relating to the


                                        -9-
<PAGE>

     environment in effect or on the Closing Date (collectively, the "Applicable
     Environmental Laws").  None of the operations of Borrower has ever been
     conducted nor have any of its assets been used in such a manner as to
     constitute a violation of any of the Applicable Environmental Laws.  No
     notice has been served on Borrower by any person or Governmental Entity
     regarding any existing, pending or threatened investigation or inquiry
     related to violations under any Applicable Environmental Law, or regarding
     any claims for corrective action, remedial obligations or contribution for
     removal costs or damages under any Applicable Environmental Law, or
     regarding the designation of Borrower or any of its affiliates as a
     potentially responsible party for any facility under the Applicable
     Environmental Laws, nor does any fact or circumstance exist which, if
     disclosed publicly, would be reasonably likely to result in the service on
     Borrower of any such notice.  There has been no action taken, or omitted to
     be taken by Borrower which has caused, or would be reasonably likely to
     cause, a "release" of any "hazardous substance" at any "facility," without
     limitation, within the meaning of such terms as defined in the Applicable
     Environmental Laws.

          2.24 DISCLOSURES.  Neither this Agreement nor any Exhibit hereto, nor
     any certificate or other instrument furnished to Lender or its counsel by
     Borrower in connection with the transactions contemplated hereby, contains
     any untrue statement of a material fact or omits to state a material fact
     necessary in order to make the statements contained herein or therein, in
     the light of the circumstances under which they were made, not misleading.

                                    ARTICLE III
                             INVESTMENT REPRESENTATIONS

          3.1  INVESTMENT REPRESENTATIONS.  This Agreement is made with the
     Lender in reliance on the following specific representations to the
     Borrower that:

                    (a)  The Notes, Shares and the Warrants issued to
          Lender hereunder will be acquired for the Lender's own account,
          not as a nominee or agent, and the Lender has no present
          intention of selling, granting participation in, or otherwise
          distributing the same in violation of the registration
          requirements of the Securities Act of 1933, as amended (the
          "Act").

                    (b)  The Lender understands that the Notes, Shares and
          the Warrants represent a speculative investment, and the Lender
          is able, without impairing its financial condition, to hold the
          Notes, Shares and the Warrants for an indefinite period of time
          and to suffer a complete loss of the Lender's investment.  The
          Lender is aware of and has investigated the Borrower's business,
          management and financial condition, has had the opportunity to
          inspect the


                                        -10-

<PAGE>

          Borrower's facilities and has had access to such other information
          about the Borrower as the Lender has deemed necessary or desirable to
          reach an informed and knowledgeable decision to acquire the Notes,
          Shares and the Warrants.

                    (c)  The Lender understands, except as set forth in the
          Registration Rights Agreement, that the Shares, the Warrants and
          the Warrant Shares will not be registered under the Act by reason
          of, among other things, reliance upon certain exemptions
          therefrom, and that the reliance of the Borrower on such
          exemptions is predicated upon, among other things, the bona fide
          nature of the Lender's investment intent as expressed herein.

                    (d)  The management of the Lender is experienced in
          evaluating and investing in securities of companies in the
          development stage and has made investments in securities other
          than those of the Borrower.  The Lender acknowledges that by
          reason of its business or financial experience, it has the
          ability to bear the economic risk of its investment pursuant to
          this Agreement.

          3.2  RULE 144. The Lender understands that the Notes, the Shares,
     the Warrants, and the Warrant Shares, are restricted securities within
     the meaning of Rule 144 under the Act; that such securities are not
     registered and must be held indefinitely unless they are subsequently
     registered or an exemption from such registration is available; that,
     in any event, the exemption from registration under Rule 144 will not
     be available for at least one year, and even then will not be
     available unless:  (i) a public trading market then exists for the
     Notes, the Shares, the Warrants and the Warrant Shares, (ii) adequate
     information concerning the Company is then available to the public;
     and (iii) the other terms and conditions of Rule 144 are complied
     with, including, among other things, the sale being made through a
     broker in an unsolicited "broker's transaction" or in transactions
     directly with a "market maker" and the number of shares being sold in
     any three-month period shall not exceed specified limitations; and
     that any sale of such securities may be made by the Lender only in
     limited amounts in accordance with such terms and conditions if the
     Lender is an affiliate of the Borrower or has held such securities
     less than two years.

          3.3  INDEPENDENT INVESTIGATION: ACCREDITED INVESTOR.   The Lender
     has had a reasonable opportunity to ask questions of and receive
     answers from the Borrower concerning the Borrower and the purchase
     hereunder, and all such questions, if any, have been answered to the
     full satisfaction of the undersigned.  In making its investment
     decision to purchase the Notes, the Shares, and the Warrants, the
     Lender is not relying on any oral or written representations or
     assurances from the Borrower or any other person


                                        -11-
<PAGE>

     other than as set forth in this Agreement or in a document executed by a
     duly authorized representative of the Borrower making reference to this
     Agreement.  The Lender has such experience in business and financial
     matters that it is capable of evaluating the risk of its investment and
     determining the suitability of its investment.  The Lender is an
     "accredited investor" as defined in Rule 501 of Regulation D and by reason
     of the Lender's professional advisors, has the capacity to protect its own
     interest in connection with this purchase.

          3.4  ECONOMIC RISK. The Lender understands and acknowledges that
     an investment in the Notes and the Warrant involves a high degree of
     risk, including a possible total loss of investment in the Notes and
     the Warrant.  In making this statement, the Lender hereby represents
     and warrants that the Lender has adequate means of providing for the
     Lender's current needs and contingencies and the Lender is able to
     afford to hold the Notes and the Warrant for an indefinite period.

          3.5  NO GOVERNMENT RECOMMENDATION OR APPROVAL.  The Lender
     understands that no United States federal or state agency or similar
     agency of any other country has passed up or made any recommendation
     or endorsement of the Borrower, this transaction or the purchase of
     the Notes and Warrant.

          3.6  RELIANCE ON REPRESENTATION.  This Agreement is made by the
     Borrower with the Lender in reliance upon the Lender's representations
     and covenants made in this Article III.

          3.7  NO REGISTRATION.  The Lender understands that the Notes,
     the Shares, and the Warrants have not been registered under the Act
     and are being issued pursuant to an exemption from registration
     contained in the Act, which is based, in part, upon the
     representations of the Lender contained herein.

          3.8  NO PUBLIC SOLICITATION.  The Lender knows of no public
     solicitation or advertisement of an offer in connection with the
     issuance of the Notes, the Shares and the Warrants.

          3.9  INVESTMENT INTENT.  The Lender represents and warrants to
     the Borrower that the Lender has no present plan or intention of
     selling the Notes, the Shares, and the Warrants in violation of the
     registration requirements of the Act, has made no predetermined
     arrangements to sell the Notes, the Shares, and the Warrants in
     violation of the terms of this Agreement, and that the purchase and
     sale hereunder, together with any


                                        -12-

<PAGE>
     subsequent resale of the Notes, the Shares and the Warrants, is not part of
     a plan or scheme to evade the registration provisions of the Act.

          3.10 NO SALE IN VIOLATION OF THE ACT.  The Lender further
     covenants that the Lender will not make any sale, transfer or other
     disposition of the Notes, the Shares and the Warrants in violation of
     the Act, the Securities Exchange Act of 1934, as amended (the
     "Exchange Act"), or the rules and regulations of the Securities and
     Exchange Commission (the "Commission") promulgated thereunder.

          3.11 NO RELIANCE ON TAX ADVICE.  The Lender has reviewed with
     its own tax advisors foreign, federal, and state and local tax
     consequences of this investment, where applicable, and the
     transactions contemplated by this Agreement.  The Lender is relying
     solely on such advisors and not on any of its agents and understands
     that the Lender (and not the Borrower) shall be responsible for the
     Lender's own tax liability that may arise as a result of this
     investment or the transactions contemplated by this Agreement.

          3.12 INDEPENDENT LEGAL ADVICE.  The Lender acknowledges that
     the Lender has had the opportunity to review this Agreement and the
     transactions contemplated by this Agreement with its own legal
     counsel.  The Lender is relying solely on such counsel and not on any
     statements or representations of the Borrower or any of its agents for
     legal advice with respect to this investment or the transactions
     contemplated by this Agreement.

          3.13 NOT AN AFFILIATE.  The Lender is not an officer, director
     or "Affiliate" (as the term defined in Rule 405 and Rule 501(b) of the
     Act) of the Borrower.

                                     ARTICLE IV
                                    THE CLOSING


          4.1  TIME AND PLACE.  Subject to the provisions hereto, the initial
     closing and the closing of subsequent advances of the purchase and sale of
     the Notes, the Shares and the Warrants (the "Closings") will take place on
     the dates agreed to by the parties (the "Closing Dates"), at the offices of
     Graham & James LLP, Sacremento, California, unless another time and place
     are agreed to by the parties.

          4.2  CONDITIONS TO THE OBLIGATION OF BORROWER.  The obligation of
     Borrower to effect each Closing is subject to Lender delivering, or causing
     to be delivered, to Borrower at the Closing the following:


                                        -13-
<PAGE>
                    4.2.1  The sum of $1,200,000 as provided in Section 1.1
     hereof on the first Closing Date and the sum of $650,000 on January 15,
     1999 (the "Second Closing Date")..

                    4.2.2  The Agreement.

               4.3  CONDITIONS TO THE OBLIGATION OF LENDER.  The obligation of
     Lender to effect the Closing is subject to Borrower delivering, or causing
     to be delivered, to Lender at the initial Closing the following documents:

                    4.3.1  copies of the charter of Borrower and all
          amendments thereto and a certificate of an Officer of Borrower
          certifying that there have been no amendments to such charter since
          such date, and copies, certified by the Secretary of Subsidiary as of
          the Closing Date, of the charter of Subsidiary and all amendments
          thereto. Copies of the charter of Borrower certified by the Secretary
          of State of Delaware will be provided on or before January 8, 1999;

                    4.3.2  copies, certified by the Secretary of each of
          Borrower and Subsidiary as of the Closing Date, of the bylaws of
          Borrower, and all amendments thereto;

                    4.3.3  the Agreement;

                    4.3.4  the Note in the principal amount of up to $1,850,000;

                    4.3.5  the Warrant to purchase 2,428,242 shares of Common 
          Stock;

                    4.3.6  the Security Agreement of Borrower;

                    4.3.7  the Registration Rights Agreement;

                    4.3.8  a certificate of an Officer of Borrower to
          the effect that the representations and warranties of Borrower
          herein contained shall be true as of and at the Closing Date with
          the same effect as though made at such date, except as affected
          by transactions permitted or contemplated by this Agreement; and
          further to the effect that Borrower shall have performed and
          complied with all covenants required by this Agreement to be
          performed or complied with by each before the Closing Date;


                                        -14-

<PAGE>
               4.4.  SUBSEQUENT ADVANCES.  Upon the advance by Lender of the
     additional $650,000 on or before January 15, 1999, additional Warrants
     and Shares will be issued in accordance with Section 1.2 and the
     Recitals under this Agreement.

               4.5. POST-CLOSING COVENANTS.  The Borrower agrees to comply
     with the following post-closing covenants:

                    4.5.1.  As soon as reasonably practicable, Borrower will
          deliver, or cause its transfer agent to deliver, a certificate
          representing 610,170 shares of Common Stock, dated December 31, 1998,
          representing prepaid interest on the initial $1,200,000 advance.

                    4.5.2.  In the event that the Lender timely satisfies all
          conditions under this Agreement and lends an additional $2,350,000 on
          or prior to March 1, 1999, Lender will be issued an aggregate of
          8,545,532 in shares (for prepaid interest) and five-year warrants
          exercisable at $.75 per share to purchase common shares on terms
          substantially similar to those in this Agreement.

                    4.5.3   On or prior to January 8, 1999, Lender will
          be provided with copies, certified by the Secretary of Borrower
          as of the initial Closing Date, of resolutions duly adopted by
          the board of directors of Borrower authorizing the execution and
          delivery by Borrower of the Transaction Documents and all other
          agreements attached hereto as Exhibits or contemplated herein,
          the completion of the sale of the Note, the Shares and Warrants
          and the taking of all such other corporate action as shall have
          been required as a condition to, or in connection with, the sale
          of the Note, the Shares and Warrants;

                    4.5.4.  Financing statements on Form UCC -1 as Lender
          may request, and such other assignments, agreements and other
          documents (including documents for filing or recording) as Lender
          may request so as to perfect its security interest in the
          collateral described in the Security Agreement will be provided
          to Lender upon request, including, execution and delivery to
          Lender of all documentation requested by Lender to perfect a
          security interest in and to and in favor of Lender as to all
          Intellectual Property in such manner and form as required to
          allow the same to be perfected by filing and/or recording in
          accordance with all laws, rules, and regulations of the United
          States Patent Office pertaining thereto;



                                        -15-
<PAGE>

                    4.5.5   As soon as reasonably practicable, Borrower
          shall take steps to cause the appointment or election of two
          persons to the Borrower's Board of Directors as designated by
          Lender to serve until the Borrower's 1999 annual meeting of
          stockholders and until their successors have been elected and
          qualified.


                                     ARTICLE V
                                 GENERAL PROVISIONS

          5.1  SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.  The
     representations, warranties and agreements contained in this Agreement
     shall survive the Closing and each advance hereunder.

          5.2  NOTICES.  All notices or other communications which are required
     or may be given under this Agreement shall be in writing and shall be
     deemed to have been duly given when delivered in person, transmitted by
     telecopier (with receipt confirmed) or mailed by registered or certified
     first class mail, postage prepaid, return receipt requested to the parties
     hereto at the address set forth below (as the same may be changed from time
     to time by notice similarly given) or the last known business or residence
     address of such other person as may be designated by either party hereto in
     writing.

          (a)  If to Borrower:     The RiceX Company
                                   1241 Hawk's Flight Court
                                   El Dorado Hills, California 95762
                                   Attention:Daniel McPeak, Chairman of the
                                   Board

          (b)  If to Lender:       FoodCeuticals, LLC.
                                   The Abbey
                                   355 Madison Avenue
                                   Morristown, New Jersey 07960
                                   Attention:  Mr. Joseph Bellantoni

          5.3  MISCELLANEOUS.  This Agreement (i) constitutes the entire
     agreement and supersedes all other prior agreements and understandings,
     both written and oral, among the parties, or any of them, with respect to
     the subject matter hereof, and (ii) shall be binding upon and inure to the
     benefit of the parties hereto and their respective successors and permitted
     assigns and is not intended to confer upon any other person any rights or
     remedies hereunder.


                                        -16-

<PAGE>
          5.4  PUBLICITY.  Borrower and Lender promptly shall advise and
     cooperate with the other prior to issuing, or permitting any of its
     directors, officers, employees or agents to issue, any press release with
     respect to this Agreement or the transactions contemplated hereby, provided
     that Borrower shall be permitted to issue any press release or make such
     other public disclosure as may be required by law without the consent of
     the Lender.  Notwithstanding the foregoing, without the prior consent of
     Lender, neither Borrower nor any of its directors, officers, employees or
     agents shall issue any press release which includes the name of Lender or
     any of Lender's affiliates, unless otherwise required by applicable law.

          5.5  ASSIGNMENT.

               (a)  Neither this Agreement nor any of the rights, interests
          or obligations hereunder shall be assigned by Borrower (whether
          by operation of law or otherwise) without the prior written
          consent of the Lender.

               (b)  Lender may assign its rights and obligations hereunder,
          under the Notes, or any of them, the Warrant or any other
          Transaction Document, subject to any applicable restrictions
          under Federal and state securities laws, to any other person who
          shall participate with Lender in the purchase of the Notes and
          Warrant, subject to the terms hereof and upon prior written
          notice to Borrower.  Each such assignee (an "Assignee") shall
          execute an Assignment and Acceptance and upon the execution of
          such Assignment and Acceptance by such Assignee, (i) the Assignee
          shall be a "Lender" hereunder and, to the extent provided in the
          Assignment and Acceptance, shall have the rights and obligations
          of a Lender hereunder, and (ii) the assigning Lender (an
          "Assignor") shall, to the extent provided in the Assignment and
          Acceptance, be released from its obligations hereunder.

               (c)  An Assignor hereunder shall, if requested by the
          Assignee, deliver the Notes and Warrant in favor of such Assignor
          to the Borrower, and the Borrower shall issue replacement Notes
          and Warrant in favor of the Assignor and the Assignee in the
          amounts and for such shares as are indicated in the Assignment
          and Acceptance.  The replacement Warrant shall be issued for an
          exercise price per share equal to the exercise price set forth in
          the Warrant to be delivered to Borrower under this Section
          5.5(c).

          5.6  SCHEDULES.  All statements contained in any exhibit, schedule,
     appendix, certificate or other instrument delivered by or on behalf of the
     parties hereto, or in connection with the


                                        -17-
<PAGE>
     transactions contemplated hereby, are an integral part of this Agreement
     and shall be deemed representations and warranties hereunder.

          5.7  COUNTERPARTS.  This Agreement may be executed in one or more
     counterparts, each of which constitutes an original execution and, in the
     aggregate, constitute a single document.

          5.8  EXPENSES OF DISPUTE RESOLUTION.  If any action at law or in
     equity is necessary to enforce or interpret the terms of this Agreement or
     any of the other Transaction Documents, the prevailing party shall be
     entitled to reasonable attorneys' fees, costs, and necessary disbursements
     in addition to any other relief to which it may be entitled.

          5.9  SEVERABILITY.  In the event that any one or more of the
     provisions contained herein, or the application thereof in any
     circumstance, is held invalid, illegal or unenforceable, the validity,
     legality and enforceability of such provision in every other respect and of
     the remaining provisions contained herein shall not be affected or impaired
     thereby.

          5.10 ADDITIONAL AGREEMENTS.  It is understood and agreed that
     promptly after the Closing the following additional agreement shall be
     entered into:

               5.10.1   a Distribution Agreement between the Borrower and
          Lender (or its designee) whereby Lender or its designee shall
          have the right to distribute the Borrower's products on terms no
          less favorable than are granted to other persons.

          5.11 GOVERNING LAW  This Agreement and the Note shall be governed
     by and construed in accordance with the laws of the State of New
     Jersey without giving effect to applicable principles of conflicts of
     laws to the extent that the application of the law of another
     jurisdiction would be required thereby.

          5.12 DEFAULT.  Any default under the Note shall operate as a
     default under this Agreement.

          5.13.  FURTHER ASSURANCES.  Each of the parties hereto
     covenants, without the need for any additional consideration, that it
     will take such further actions and execute upon request any further
     documents as may be reasonably required to fully effectuate the terms,
     conditions and intent of this Agreement.


                                        -18-
<PAGE>

                             BORROWER'S SIGNATURE PAGE

     IN WITNESS WHEREOF, Borrower has signed this Agreement as of the date first
written above.


                              The RiceX Company




                         By:  /s/ Daniel L. McPeak
                              ---------------------------------------
                              Daniel L. McPeak, Chairman of the Board












                                         -19-
<PAGE>

                              LENDER'S SIGNATURE PAGE

          IN WITNESS WHEREOF, Lender has signed this Agreement as of the date
     first written above.


                              FoodCeuticals, LLC




                         By:  /s/ Joseph Bellantoni
                              ---------------------------------------
                              Name: Joseph Bellantoni
                              Title:  Managing Member







                                         -20-