Document:

Unassociated Document

    
      

    

    Exhibit
      10.2

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (this “Agreement”)
      is
      made and entered into as of October 3, 2005, among NutraCea, a California
      corporation (the “Company”),
      and
      the purchasers signatory hereto (each such purchaser is a “Purchaser”
and
      all
      such purchasers are, collectively, the “Purchasers”).

    

    This
      Agreement is made pursuant to the Securities Purchase Agreement, dated as of
      the
      date hereof among the Company and the Purchasers (the “Purchase
      Agreement”).

    

    The
      Company and the Purchasers hereby agree as follows:

    

    
      	 	
              1.

            	
              Definitions

            

    

    

    Capitalized
      terms used and not otherwise defined herein that are defined in the Purchase
      Agreement shall have the meanings given such terms in the Purchase
      Agreement.
      As used
      in this Agreement, the following terms shall have the following
      meanings:

    

    “Advice”
shall
      have the meaning set forth in Section 7(c).

    

    “Effectiveness
      Date”
means,
      with respect to the initial Registration Statement required to be filed
      hereunder, the date which is the 135th
      calendar
      day following the Closing Date and, with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 135th calendar
      day following the date on which the Company first knows, or reasonably should
      have known, that such additional Registration Statement is required hereunder;
      provided,
      however,
      in the
      event the Company is notified by the Commission that one of the above
      Registration Statements will not be reviewed or is no longer subject to further
      review and comments, the Effectiveness Date as to such Registration Statement
      shall be the fifth Trading Day following the date on which the Company is so
      notified if such date precedes the dates required above.

    

    “Effectiveness
      Period”
shall
      have the meaning set forth in Section 2(a).

    

    “Event”
shall
      have the meaning set forth in Section 2(b).

    

    “Event
      Date”
shall
      have the meaning set forth in Section 2(b).

    

    “Filing
      Date”
means,
      with respect to the initial Registration Statement required hereunder, the
      45th
      calendar
      day following the Closing Date, and, with respect to any additional Registration
      Statements which may be required pursuant to Section 3(c), the 30th
      day
      following the date on which the Company first knows, or reasonably should have
      known that such additional Registration Statement is required
      hereunder.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Holder”
or
      “Holders”
means
      the holder or holders, as the case may be, from time to time of Registrable
      Securities.

    

    “Indemnified
      Party”
shall
      have the meaning set forth in Section 6(c) hereof.

    

    “Indemnifying
      Party”
shall
      have the meaning set forth in Section 6(c) hereof.

    

    “Legal
      Counsel”
shall
      have the meaning set forth in Section 4.

    

    “Losses”
shall
      have the meaning set forth in Section 6(a).

     

    “Proceeding”
means
      an action, claim, suit, investigation or proceeding (including, without
      limitation, an investigation or partial proceeding, such as a deposition),
      whether commenced or threatened in writing.

    

    “Prospectus”
means
      the prospectus included in a Registration Statement (including, without
      limitation, a prospectus that includes any information previously omitted from
      a
      prospectus filed as part of an effective registration statement in reliance
      upon
      Rule 430A promulgated under the Securities Act), as amended or supplemented
      by
      any prospectus supplement, with respect to the terms of the offering of any
      portion of the Registrable Securities covered by a Registration Statement,
      and
      all other amendments and supplements to the Prospectus, including post-effective
      amendments, and all material incorporated by reference or deemed to be
      incorporated by reference in such Prospectus.

    

    “Registrable
      Securities”
means,
      as of the date in question, (i) all of the shares of Common Stock issuable
      upon
      conversion in full of the shares of Preferred Stock, (ii) all Warrant Shares
      and
      (iii) any securities issued or issuable upon any stock split, dividend or other
      distribution recapitalization or similar event with respect to the foregoing.
      The foregoing Company securities, or any of them, shall cease to be Registrable
      Securities upon the earlier to occur of (i) the date on which such securities
      have been effectively registered under the Securities Act and disposed of in
      accordance with the Registration Statement, (ii) the date on which such
      securities have been sold pursuant to Rule 144, or (iii) the date on which
      such
      securities (together with all other such securities held by the Investor) may
      be
      sold or transferred by a Person who is not an Affiliate of the Company pursuant
      to Rule 144(k) under the Securities Act (or any other similar provision then
      in
      force).

     

    “Registration
      Statement”
means
      the registration statements required to be filed hereunder and any additional
      registration statements contemplated by Section 3(c), including (in each case)
      the Prospectus, amendments and supplements to such registration statement or
      Prospectus, including pre- and post-effective amendments, all exhibits thereto,
      and all material incorporated by reference or deemed to be incorporated by
      reference in such registration statement.

    

    “Rule
      415”
means
      Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or

     

    
      
        
        

      

      
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    regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.

    

    “Rule
      424”
means
      Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
      Rule may be amended from time to time, or any similar rule or regulation
      hereafter adopted by the Commission having substantially the same purpose and
      effect as such Rule.

    

    

    
      	 	
              2.

            	
              Shelf
                Registration

            

    

    

    (a)   On
      or prior to each
      Filing Date, the Company shall prepare and file with the Commission a “Shelf”
Registration Statement covering the resale of the Registrable Securities on
      such
      Filing Date for an offering to be made on a continuous basis pursuant to Rule
      415. The Registration Statement shall be on Form SB-2 (or on such other form
      appropriate for such purpose) and shall contain (except if otherwise required
      pursuant to comments received from the Commission upon a review of such
      Registration Statement) substantially the “Plan
      of Distribution”
      attached hereto as Annex
      A.
      Subject
      to the terms of this Agreement, the Company shall use its best efforts to cause
      the Registration Statement to be declared effective under the Securities Act
      as
      promptly as possible after the filing thereof, but in any event prior to the
      applicable Effectiveness Date, and shall use its best efforts to keep such
      Registration Statement continuously effective under the Securities Act until
      the
      date which is the earlier of (i) three years after the Closing Date, (ii) such
      time as all of the Registrable Securities covered by such Registration Statement
      have been publicly sold, or (iii) such time as all Registrable Securities
      covered by such Registration Statement have been sold or may be sold without
      volume restrictions pursuant to Rule 144(k) as determined by the counsel to
      the
      Company pursuant to a written opinion letter to such effect, addressed and
      acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness
      Period”).
      The
      Company shall immediately notify the Holders via facsimile or e-mail of the
      effectiveness of the Registration Statement within two trading days of the
      day
      that the Company receives notification of the effectiveness from the Commission.
      

    

    (b)   If:
      (i) a
      Registration Statement is not filed on or prior to its Filing Date, or (ii)
      the
      Company fails to file with the Commission a request for acceleration in
      accordance with Rule 461 promulgated under the Securities Act, within five
      Trading Days of the date that the Company is notified (orally or in writing,
      whichever is earlier) by the Commission that a Registration Statement will
      not
      be “reviewed,” or not subject to further review, or (iii) prior to its
      Effectiveness Date, the Company fails to file a pre-effective amendment and
      otherwise respond in writing to comments made by the Commission in respect
      of
      such Registration Statement within 10 calendar days after the receipt of
      comments by or notice from the Commission that such amendment is required in
      order for a Registration Statement to be declared effective, unless such delay
      is caused by the unavailability of required financial statements, or (iv) a
      Registration Statement filed or required to be filed hereunder is not declared
      effective by the Commission by its Effectiveness Date, or (v) after the
      Effectiveness Date, a Registration Statement ceases for any reason to remain
      continuously effective as to all Registrable Securities for which it is required
      to be effective, or the Holders are not permitted to utilize the Prospectus
      therein to resell

    
      
        
        

      

      
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    such
      Registrable Securities for 15 consecutive Trading Days but no more than an
      aggregate of 30 Trading Days during any 12-month period (which need not be
      consecutive Trading Days) or (vi) the Company is in material breach of the
      provisions of Section 4.13 of the Purchase Agreement (any such failure or breach
      being referred to as an “Event”,
      and
      for purposes of clause (i) or (iv) the date on which such Event occurs, or
      for
      purposes of clause (ii) the date on which such five Trading Day period is
      exceeded, or for purposes of clause (iii) the date which such 10 calendar day
      period is exceeded, or for purposes of clause (v) the date on which such 15
      or
      30 Trading Day period or for the purposes of clause (vi), the date on which
      such
      material breach occurred, as applicable, is exceeded being referred to as
“Event
      Date”),
      then
      in addition to any other rights the Holders may have hereunder or under the
      Purchase Agreement in the case of clause (vi), or under applicable law, on
      each
      such Event Date and on each monthly anniversary of each such Event Date until
      the applicable Event is cured, the Company shall pay to each Holder an amount,
      as partial liquidated damages and not as a penalty, equal to 2% of the aggregate
      purchase price paid by such Holder pursuant to the Purchase Agreement for any
      Registrable Securities then held by such Holder. The foregoing liquidated
      damages may be paid, at the option of the Holders, in cash or in shares of
      the
      Company’s common stock. For purposes of this Section 2, the per share value of
      the Company’s common stock shall equal the average of the last reported sales
      price of the Company’s common stock on the Trading Market for each of the ten
      (10) trading days up to and including the first trading day preceding the date
      that the payment is due. The partial liquidated damages pursuant to the terms
      hereof shall apply on a daily pro-rata basis for any portion of a month prior
      to
      the cure of an Event. If the Company fails to pay any partial liquidated damages
      pursuant to this Section in full within seven calendar days after the date
      payable, the Company will pay interest thereon at the rate per annum equal
      to
      the Prime Rate plus ten percent (10%) (or such lesser maximum amount that is
      permitted to be paid by applicable law) to the Holder, accruing daily from
      the
      date such partial liquidated damages are due until such amounts, plus all such
      interest thereon, are paid in full. The partial liquidated damages pursuant
      to
      the terms hereof shall apply on a daily pro-rata basis for any portion of a
      month prior to the cure of an Event.

    

    
      	 	
              3.

            	
              Registration
                Procedures

            

    

    

    In
      connection with the Company's registration obligations hereunder, the Company
      shall:

    

    (a)   Not
      less
      than five Trading Days prior to the filing of each Registration Statement or
      any
      related Prospectus or any amendment or supplement thereto, the Company shall
      furnish to each Holder copies of the “Selling Stockholders” and “Plan of
      Distribution” sections of such document, as proposed to be filed, which
      documents will be subject to the review of such Holders. The Company shall
      not
      file the Registration Statement or any such Prospectus or any amendments or
      supplements thereto to which the Holders of a majority of the Registrable
      Securities shall reasonably object in good faith, provided that, the Company
      is
      notified of such objection, including the substance of such objection, in
      writing no later than two Trading Days after the Holders have been so furnished
      copies of such documents. However, the Company shall not be required to pay
      any
      liquidated damages under Section 2(b) for any period of time in which the filing
      of Registration Statement, or any Prospectus or any amendments or supplements
      thereto is delayed because of such objection. Each Holder agrees to furnish
      to
      the Company a

    
      
        
        

      

      
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    completed
      Questionnaire in the form attached to this Agreement as Annex B (a “Selling
      Holder Questionnaire”)
      not
      less than two Trading Days prior to the Filing Date or by the end of the third
      Trading Day following the date on which such Holder receives draft materials
      in
      accordance with this Section. The Company shall not be required to include
      the
      Registrable Securities of a Holder in the Registration Statement and shall
      not
      be required to pay any liquidated or other damages under Section 2(b) to any
      Holder who fails to furnish to the Company a true and fully completed Selling
      Holder Questionnaire in accordance with this Section.

     

    (b)   (i)
      Prepare and file with the Commission such amendments, including post-effective
      amendments, to a Registration Statement and the Prospectus used in connection
      therewith as may be necessary to keep a Registration Statement continuously
      effective as to the applicable Registrable Securities for the Effectiveness
      Period and to the extent any Registrable Securities are not included in such
      Registration Statement for reasons other than the failure of the Holder to
      comply with Sections 3(a) and 7(o) hereof, and prepare and file with the
      Commission such additional Registration Statements or post-effective amendments
      in order to register for resale under the Securities Act all of the Registrable
      Securities; (ii) cause the related Prospectus to be amended or supplemented
      by
      any required Prospectus supplement (subject to the terms of this Agreement),
      and
      as so supplemented or amended to be filed pursuant to Rule 424; (iii) respond
      as
      promptly as reasonably possible to any comments received from the Commission
      with respect to a Registration Statement or any amendment thereto; and (iv)
      comply in all material respects with the provisions of the Securities Act and
      the Exchange Act with respect to the disposition of all Registrable Securities
      covered by a Registration Statement during the applicable period in accordance
      (subject to the terms of this Agreement) with the intended methods of
      disposition by the Holders thereof set forth in such Registration Statement
      as
      so amended or in such Prospectus as so supplemented.

     

    (c)   If
      during
      the Effectiveness Period, the number of Registrable Securities at any time
      exceeds the number of shares of Common Stock then registered in a Registration
      Statement other than for failure by the Holders to comply with Sections 3(a)
      and
      7(o), then the Company shall file as soon as reasonably practicable but in
      any
      case prior to the applicable Filing Date, an additional Registration Statement
      covering the resale by the Holders of such additional Registrable
      Securities.

    

    (d)   Notify
      the Holders of Registrable Securities to be sold (which notice shall, pursuant
      to clauses (ii) through (vi) hereof, be accompanied by an instruction to suspend
      the use of the Prospectus until the requisite changes have been made) as
      promptly as reasonably possible (and, in the case of (i)(A) below, not less
      than
      five Trading Days prior to such filing) and (if requested by any such Person
      in
      writing) confirm such notice in writing no later than one Trading Day following
      the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
      amendment to a Registration Statement is proposed to be filed; (B) when the
      Commission notifies the Company whether there will be a “review” of such
      Registration Statement and whenever the Commission comments in writing on such
      Registration Statement (the Company shall provide true and complete copies
      thereof and all written responses thereto to the each Holder that pertain to
      such Holder as a Selling Stockholder or to the Plan of Distribution, but not
      information which the Company believes would constitute material and non public
      information); and (C) with respect to a Registration Statement or any
      post-effective

    
      
        
        

      

      
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    amendment,
      when the same has become effective; (ii) of any request by the Commission or
      any
      other Federal or state governmental authority for amendments or supplements
      to a
      Registration Statement or Prospectus or for additional information; (iii) of
      the
      issuance by the Commission or any other federal or state governmental authority
      of any stop order suspending the effectiveness of a Registration Statement
      covering any or all of the Registrable Securities or the initiation of any
      Proceedings for that purpose; (iv) of the receipt by the Company of any
      notification with respect to the suspension of the qualification or exemption
      from qualification of any of the Registrable Securities for sale in any
      jurisdiction, or the initiation or threatening of any Proceeding for such
      purpose; (v) of the occurrence of any event or passage of time that makes the
      financial statements included in a Registration Statement ineligible for
      inclusion therein or any statement made in a Registration Statement or
      Prospectus or any document incorporated or deemed to be incorporated therein
      by
      reference untrue in any material respect or that requires any revisions to
      a
      Registration Statement, Prospectus or other documents so that, in the case
      of a
      Registration Statement or the Prospectus, as the case may be, it will not
      contain any untrue statement of a material fact or omit to state any material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading; and
      (vi) the occurrence or existence of any pending corporate development with
      respect to the Company that the Company believes may be material and that,
      in
      the determination of the Company, makes it not in the best interest of the
      Company to allow continued availability of the Registration Statement or
      Prospectus; provided that any and all of such information shall remain
      confidential to each Holder until such information otherwise becomes public,
      unless disclosure by a Holder is required by law; provided,
      further,
      notwithstanding each Holder’s agreement to keep such information confidential,
      the Holders make no acknowledgement that any such information is material,
      non-public information. 

     

    (e)   Use
      its
      best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
      of
      (i) any order suspending the effectiveness of a Registration Statement, or
      (ii)
      any suspension of the qualification (or exemption from qualification) of any
      of
      the Registrable Securities for sale in any jurisdiction, at the earliest
      practicable moment.

    

    (f)   Furnish
      to each Holder, without charge, at least one conformed copy of each such
      Registration Statement and each amendment thereto and all exhibits to the extent
      requested by such Person (including those previously furnished) promptly after
      the filing of such documents with the Commission.

    

    (g)   Promptly
      deliver to each Holder, without charge, as many copies of the Prospectus or
      Prospectuses (including each form of prospectus) and each amendment or
      supplement thereto as such Persons may reasonably request in connection with
      resales by the Holder of Registrable Securities. Subject to the terms of this
      Agreement, the Company hereby consents to the use of such Prospectus and each
      amendment or supplement thereto by each of the selling Holders in connection
      with the offering and sale of the Registrable Securities covered by such
      Prospectus and any amendment or supplement thereto, except after the giving
      on
      any notice pursuant to Section 3(d).

    

    (h)   Prior
      to
      any public offering of Registrable Securities by a Holder, use its commercially
      reasonable efforts to register or qualify or cooperate with the selling Holders
      in

    
      
        
        

      

      
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    connection
      with the registration or qualification (or exemption from the Registration
      or
      qualification) of such Registrable Securities for offer and sale by the Holder
      under the securities or Blue Sky laws of such jurisdictions within the United
      States as any Holder reasonably requests in writing, to keep each registration
      or qualification (or exemption therefrom) effective during the Effectiveness
      Period and to do any and all other acts or things reasonably necessary to enable
      the disposition in such jurisdictions of the Registrable Securities covered
      by
      each Registration Statement; provided, that the Company shall not be required
      to
      qualify generally to do business in any jurisdiction where it is not then so
      qualified, subject the Company to any material tax in any such jurisdiction
      where it is not then so subject or file a general consent to service of process
      in any such jurisdiction.

    

    (i)   If
      requested by the Holders, cooperate with the Holders to facilitate the timely
      preparation and delivery of certificates representing Registrable Securities
      to
      be delivered to a transferee pursuant to a Registration Statement, which
      certificates shall be free, to the extent permitted by the Purchase Agreement,
      of all restrictive legends, and to enable such Registrable Securities to be
      in
      such denominations and registered in such names as any such Holders may
      request.

    

    (j)   Upon
      the
      occurrence of any event contemplated by Section 3(d)(v), as promptly as
      reasonably possible under the circumstances taking into account the Company’s
      good faith assessment of any adverse consequences to the Company and its
      stockholders of the premature disclosure of such event, prepare a supplement
      or
      amendment, including a post-effective amendment, to a Registration Statement
      or
      a supplement to the related Prospectus or any document incorporated or deemed
      to
      be incorporated therein by reference, and file any other required document
      so
      that, as thereafter delivered, neither a Registration Statement nor such
      Prospectus will contain an untrue statement of a material fact or omit 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. If
      the
      Company notifies the Holders in accordance with clauses (ii) through (v) of
      Section 3(d) above to suspend the use of any Prospectus until the requisite
      changes to such
      Prospectus have been made, then the Holders shall suspend use of such
      Prospectus. The Company will use its best efforts to ensure that the use of
      the
      Prospectus may be resumed as promptly as is practicable. The Company shall
      be
      entitled to exercise its right under this Section 3(j) to suspend the
      availability of a Registration Statement and Prospectus, subject to the payment
      of partial liquidated damages pursuant to Section 2(b), for a period not to
      exceed 60 days (which need not be consecutive days) in any 12 month
      period.

     

    (k)   Comply
      with all applicable rules and regulations of the Commission.

    

    (l)   The
      Company may require each selling Holder to furnish to the Company a separate
      certified statement as to the number of shares of Common Stock beneficially
      owned by such Holder and the person thereof that has voting and dispositive
      control over the Shares, and the status of Holder as, or the affiliation of
      Holder with, a broker-dealer. In addition, the Company will require that each
      of
      the Holders provide complete and accurate information as requested in the
      Selling Holder Questionnaire. During any periods that the Company is unable
      to
      meet its obligations hereunder with respect to the registration of the
      Registrable Securities solely because any Holder fails to furnish such
      information within two Trading Days of the Company’s

    
      
        
        

      

      
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    request,
      any liquidated damages that are accruing at such time as to such Holder only
      shall be tolled and any Event that may otherwise occur solely because of such
      delay shall be suspended as to such Holder only, until such information is
      delivered to the Company.

    

    4.    
      Legal
      Counsel.
      The
      Buyers holding securities representing at least two-thirds (2/3) of the
      Registrable Securities shall have the right to select one legal counsel to
      review, on behalf of the Buyers, any registration pursuant to Section 2
      (“Legal
      Counsel”),
      which
      shall be Paul, Weiss, Rifkind, Wharton & Garrison LLP, or such other counsel
      as thereafter designated in writing to the Company by the holders of at least
      two-thirds (2/3) of the Registrable Securities. The Company shall reasonably
      cooperate with Legal Counsel in performing the Company’s obligations under this
      Agreement. 

    

    5.    
      Registration
      Expenses.
      All
      fees and expenses incident to the performance of or compliance with this
      Agreement by the Company shall be borne by the Company whether or not any
      Registrable Securities are sold pursuant to the Registration Statement. The
      fees
      and expenses referred to in the foregoing sentence shall include, without
      limitation, (i) all registration and filing fees (including, without limitation,
      fees and expenses (A) with respect to filings required to be made with the
      Trading Market on which the Common Stock is then listed for trading, and (B)
      in
      compliance with applicable state securities or Blue Sky laws reasonably agreed
      to by the Company in writing (including, without limitation, fees and
      disbursements of counsel for the Company in connection with Blue Sky
      qualifications or exemptions of the Registrable Securities and determination
      of
      the eligibility of the Registrable Securities for investment under the laws
      of
      such jurisdictions as requested by the Holders), (ii) printing expenses
      (including, without limitation, expenses of printing certificates for
      Registrable Securities and of printing prospectuses if the printing of
      prospectuses is reasonably requested by the holders of a majority of the
      Registrable Securities included in a Registration Statement), (iii) messenger,
      telephone and delivery expenses, (iv) fees and disbursements of counsel for
      the
      Company, (v) Securities Act liability insurance, if the Company so desires
      such
      insurance, (vi) fees and expenses of all other Persons retained by the Company
      in connection with the consummation of the transactions contemplated by this
      Agreement and (vii) fees and disbursements of Legal Counsel to Buyers, not
      to
      exceed $25,000 in the aggregate. In addition, the Company shall be responsible
      for all of its internal expenses incurred in connection with the consummation
      of
      the transactions contemplated by this Agreement (including, without limitation,
      all salaries and expenses of its officers and employees performing legal or
      accounting duties), the expense of any annual audit and the fees and expenses
      incurred in connection with the listing of the Registrable Securities on any
      securities exchange as required hereunder. In no event shall the Company be
      responsible for any broker or similar commissions or, except to the extent
      provided for in the Transaction Documents, any legal fees or other costs of
      the
      Holders.

    

    
      	 	
              6.

            	
              Indemnification

            

    

    

    (a)   Indemnification
      by the Company.
      The
      Company shall, notwithstanding any termination of this Agreement, indemnify
      and
      hold harmless each Holder, the officers, directors, agents, investment advisors
      and employees of each of them, each Person who controls any such Holder (within
      the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
      Act) and the officers, directors, agents and employees of each such controlling
      Person, to the

    
      
        
        

      

      
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    fullest
      extent permitted by applicable law, from and against any and all losses, claims,
      damages, liabilities, costs (including, without limitation, reasonable
      attorneys' fees) and expenses (collectively, “Losses”),
      as
      incurred, arising out of or relating to: (1) any untrue or alleged untrue
      statement of a material fact contained in a Registration Statement, any
      Prospectus or any form of prospectus or in any amendment or supplement thereto
      or in any preliminary prospectus, or arising out of or relating to any omission
      or alleged omission of a material fact required to be stated therein or
      necessary to make the statements therein (in the case of any Prospectus or
      form
      of prospectus or supplement thereto, in light of the circumstances under which
      they were made) not misleading, (2) any violation or alleged violation by the
      Company of the 1933 Act, the 1934 Act, or any other law, including any state,
      provincial or foreign securities law, or any rule or regulation thereunder
      relating to the offer or sale of the Registrable Securities pursuant to a
      Registration Statement or (3) any material violation of this Agreement by the
      Company, except to the extent, but only to the extent, that (i) such untrue
      statements or omissions are based solely upon information regarding such Holder
      furnished in writing to the Company by such Holder expressly for use therein,
      or
      to the extent that such information relates to such Holder or such Holder's
      proposed method of distribution of Registrable Securities and was reviewed
      and
      expressly approved in writing by such Holder expressly for use in a Registration
      Statement, such Prospectus or such form of Prospectus or in any amendment or
      supplement thereto (it being understood that the Holder has approved Annex
      A
      hereto for this purpose) or (ii) in the case of an occurrence of an event of
      the
      type specified in Section 3(d)(ii)-(vi), the use by such Holder of an outdated
      or defective Prospectus after the Company has notified such Holder in writing
      that the Prospectus is outdated or defective and prior to the receipt by such
      Holder of the Advice contemplated in Section 7(c); provided, however, that
      in
      connection with any Proceeding in the same jurisdiction, the Company will not
      be
      liable for the reasonable legal fees and expenses of more than one separate
      firm
      of attorneys at any time for all Holder Indemnified Parties. The Company shall
      notify the Holders promptly of the institution or written threat or assertion
      of
      any Proceeding of which the Company is aware pursuant to which indemnification
      could be required under this Section 6(a). 

    

    (b)   Indemnification
      by Holders.
      Each
      Holder shall, severally and not jointly, indemnify and hold harmless the
      Company, its directors, officers, agents and employees, each Person who controls
      the Company (within the meaning of Section 15 of the Securities Act and Section
      20 of the Exchange Act), and the directors, officers, agents or employees of
      such controlling Persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, to the extent arising out of or based
      solely upon: (x) such Holder’s failure to comply with the prospectus delivery
      requirements of the Securities Act or (y) any untrue or alleged untrue statement
      of a material fact contained in any Registration Statement, any Prospectus,
      or
      any form of prospectus, or in any amendment or supplement thereto or in any
      preliminary prospectus, or arising out of or relating to any omission or alleged
      omission of a material fact required to be stated therein or necessary to make
      the statements therein not misleading (i) to the extent, but only to the extent,
      that such untrue statement or omission is contained in any information so
      furnished in writing by such Holder to the Company specifically for inclusion
      in
      such Registration Statement or such Prospectus or (ii) to the extent that (1)
      such untrue statements or omissions are based solely upon information regarding
      such Holder furnished in writing to the Company by such Holder expressly for
      use
      therein, or to the extent that such information relates to such Holder or such
      Holder's proposed method of distribution of Registrable Securities
      and

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    was
      reviewed and expressly approved in writing by such Holder expressly for use
      in
      the Registration Statement (it being understood that the Holder has approved
      Annex A hereto for this purpose), such Prospectus or such form of Prospectus
      or
      in any amendment or supplement thereto or (2) in the case of an occurrence
      of an
      event of the type specified in Section 3(d)(ii)-(vi), the use by such Holder
      of
      an outdated or defective Prospectus after the Company has notified such Holder
      in writing that the Prospectus is outdated or defective and prior to the receipt
      by such Holder of the Advice contemplated in Section 7(c). In no event shall
      the
      liability of any selling Holder hereunder be greater in amount than the dollar
      amount of the net proceeds received by such Holder upon the sale of the
      Registrable Securities giving rise to such indemnification
      obligation.

    

    (c)   Conduct
      of Indemnification Proceedings.
      If any
      Proceeding shall be brought or asserted against any Person entitled to indemnity
      hereunder (an “Indemnified
      Party”),
      such
      Indemnified Party shall promptly notify the Person from whom indemnity is sought
      (the “Indemnifying
      Party”)
      in
      writing, and the Indemnifying Party shall be entitled to participate in such
      Proceeding and have the right to assume the defense thereof, including the
      employment of counsel reasonably satisfactory to the Indemnified Party and
      the
      payment of all fees and expenses incurred in connection with defense thereof;
      provided, that the failure of any Indemnified Party to give such notice shall
      not relieve the Indemnifying Party of its obligations or liabilities pursuant
      to
      this Agreement, except (and only) to the extent that it shall be finally
      determined by a court of competent jurisdiction (which determination is not
      subject to appeal or further review) that such failure shall have prejudiced
      the
      Indemnifying Party.

    

    An
      Indemnified Party shall have the right to employ separate counsel in any such
      Proceeding and to participate in the defense thereof, but the fees and expenses
      of such counsel shall be at the expense of such Indemnified Party or Parties
      unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
      expenses; (2) the Indemnifying Party shall have failed promptly to assume the
      defense of such Proceeding and to employ counsel reasonably satisfactory to
      such
      Indemnified Party in any such Proceeding; or (3) the named parties to any such
      Proceeding (including any impleaded parties) include both such Indemnified
      Party
      and the Indemnifying Party, and such Indemnified Party shall reasonably believe
      that a material conflict of interest is likely to exist if the same counsel
      were
      to represent such Indemnified Party and the Indemnifying Party (in which case,
      if such Indemnified Party notifies the Indemnifying Party in writing that it
      elects to employ separate counsel at the expense of the Indemnifying Party,
      the
      Indemnifying Party shall not have the right to assume the defense thereof and
      the reasonable fees and expenses of one separate counsel shall be at the expense
      of the Indemnifying Party). The Indemnifying Party shall not be liable for
      any
      settlement of any such Proceeding effected without its written consent, which
      consent shall not be unreasonably withheld. No Indemnifying Party shall, without
      the prior written consent of the Indemnified Party (which consent shall not
      be
      unreasonably withheld or delayed), effect any settlement of any pending
      Proceeding in respect of which any Indemnified Party is a party, unless such
      settlement includes an unconditional release of such Indemnified Party from
      all
      liability on claims that are the subject matter of such Proceeding.

    

    Subject
      to the terms of this Agreement, all reasonable fees and expenses of the
      Indemnified Party (including reasonable fees and expenses to the extent incurred
      in connection

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    with
      investigating or preparing to defend such Proceeding in a manner not
      inconsistent with this Section) shall be paid to the Indemnified Party, as
      incurred, within ten Trading Days of written notice thereof to the Indemnifying
      Party, which notice shall be delivered no more frequently than on a monthly
      basis; provided, that the Indemnified Party shall promptly reimburse the
      Indemnifying Party for that portion of such fees and expenses applicable to
      such
      actions for which such Indemnified Party is not entitled to indemnification
      hereunder, determined based upon the relative faults of the
      parties.

    

    (d)   Contribution.
      If a
      claim for indemnification under Section 6(a) or 6(b) is unavailable to an
      Indemnified Party (by reason of public policy or otherwise), then each
      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 Losses, in such proportion as is appropriate to reflect the relative
      fault of the Indemnifying Party and Indemnified Party in connection with the
      actions, statements or omissions that resulted in such Losses as well as any
      other relevant equitable considerations. The relative fault of such Indemnifying
      Party and Indemnified Party shall be determined by reference to, among other
      things, whether any action in question, including any untrue or alleged untrue
      statement of a material fact or omission or alleged omission of a material
      fact,
      has been taken or made by, or relates to information supplied by, such
      Indemnifying Party or Indemnified Party, and the parties' relative intent,
      knowledge, access to information and opportunity to correct or prevent such
      action, statement or omission. The amount paid or payable by a party as a result
      of any Losses shall be deemed to include, subject to the limitations set forth
      in this Agreement, any reasonable attorneys' or other reasonable fees or
      expenses incurred by such party in connection with any Proceeding to the extent
      such party would have been indemnified for such fees or expenses if the
      indemnification provided for in this Section was available to such party in
      accordance with its terms.

    

    The
      parties hereto agree that it would not be just and equitable if contribution
      pursuant to this Section 6(d) were determined by pro rata allocation or by
      any
      other method of allocation that does not take into account the equitable
      considerations referred to in the immediately preceding paragraph.
      Notwithstanding the provisions of this Section 6(d), no Holder shall be required
      to contribute, in the aggregate, any amount in excess of the amount by which
      the
      proceeds actually received by such Holder from the sale of the Registrable
      Securities subject to the Proceeding exceeds the amount of any damages that
      such
      Holder has otherwise been required to pay by reason of such untrue or alleged
      untrue statement or omission or alleged omission, except in the case of fraud
      by
      such Holder.

    

    The
      indemnity and contribution agreements contained in this Section are in addition
      to any liability that the Indemnifying Parties may have to the Indemnified
      Parties.

    

    
      	 	
              7.

            	
              Miscellaneous

            

    

    

    (a)   Remedies.
      In the
      event of a breach by the Company or by a Holder, of any of their obligations
      under this Agreement, each Holder or the Company, as the case may be, in
      addition to being entitled to exercise all rights granted by law and under
      this
      Agreement, including recovery of damages, will be entitled to specific
      performance of its rights under this Agreement. The Company and each Holder
      agree that monetary damages would not provide

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    adequate
      compensation for any losses incurred by reason of a breach by it of any of
      the
      provisions of this Agreement and hereby further agrees that, in the event of
      any
      action for specific performance in respect of such breach, it shall waive the
      defense that a remedy at law would be adequate.

    

    (b)   Compliance.
      Each
      Holder covenants and agrees that it will comply with the prospectus delivery
      requirements of the Securities Act as applicable to it in connection with sales
      of Registrable Securities pursuant to the Registration Statement.

    

    (c)   Discontinued
      Disposition.
      Each
      Holder agrees by its acquisition of such Registrable Securities that, upon
      receipt of a notice from the Company of the occurrence of any event of the
      kind
      described in Section 3(d), such Holder will forthwith discontinue disposition
      of
      such Registrable Securities under a Registration Statement until such Holder's
      receipt of the copies of the supplemented Prospectus and/or amended Registration
      Statement, or until it is advised in writing (the “Advice”)
      by the
      Company that the use of the applicable Prospectus may be resumed, and, in either
      case, has received copies of any additional or supplemental filings that are
      incorporated or deemed to be incorporated by reference in such Prospectus or
      Registration Statement. The Company may provide appropriate stop orders to
      enforce the provisions of this paragraph. The Company will use its commercially
      reasonable efforts to ensure that the use of the Prospectus may be resumed
      as
      promptly as it practicable. The Company agrees and acknowledges that any periods
      during which the Holder is required to discontinue the disposition of the
      Registrable Securities hereunder shall be subject to the provisions of Section
      2(b).

    

    (d)   No
      Piggyback on Registrations.
      Except
      as set forth on Schedule
      7(d)
      attached
      hereto, neither the Company nor any of its security holders (other than the
      Holders in such capacity pursuant hereto) may include securities of the Company
      in the initial Registration Statement other than the Registrable Securities.
      The
      Company shall not file any other registration statements other than on Form
      S-8
      until the initial Registration Statement required hereunder is declared
      effective by the Commission, provided that this Section 7(d) shall not prohibit
      the Company from filing amendments to registration statements already
      filed.

    

    (e)   Piggy-Back
      Registrations.
      If at
      any time during the Effectiveness Period there is not an effective Registration
      Statement covering all of the Registrable Securities and the Company shall
      determine to prepare and file with the Commission a registration statement
      relating to an offering for its own account or the account of others under
      the
      Securities Act of any of its equity securities, other than on Form S-4 or Form
      S-8 (each as promulgated under the Securities Act) or their then equivalents
      relating to equity securities to be issued solely in connection with any
      acquisition of any entity or business or equity securities issuable in
      connection with the stock option or other employee benefit plans, then the
      Company shall send to each Holder a written notice of such determination and,
      if
      within five days after the date of such notice, any such Holder shall so request
      in writing, the Company shall include in such registration statement all or
      any
      part of such Registrable Securities such holder requests to be registered,
      subject to customary underwriter cutbacks applicable to all holders of
      registration rights if such registration statement relates to an underwritten
      offering; provided, that, the Company shall not be required to register any
      Registrable Securities pursuant to this Section 6(e) that are eligible for
      resale pursuant to Rule 144(k) promulgated under the Securities Act or that
      are
      the subject of a then effective Registration Statement.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (f)   Amendments
      and Waivers.
      The
      provisions of this Agreement, including the provisions of this sentence, may
      not
      be amended, modified or supplemented, and waivers or consents to departures
      from
      the provisions hereof may not be given, unless the same shall be in writing
      and
      signed by the Company and the holders of a majority of the Registrable
      Securities. Notwithstanding the foregoing, a waiver or consent to depart from
      the provisions hereof with respect to a matter that relates exclusively to
      the
      rights of Holders and that does not directly or indirectly affect the rights
      of
      other Holders may be given by Holders of at least a majority of the Registrable
      Securities to which such waiver or consent relates; provided,
      however,
      that
      the provisions of this sentence may not be amended, modified, or supplemented
      except in accordance with the provisions of the immediately preceding sentence.
      

    

    (g)   Notices.
      Any and
      all notices or other communications or deliveries required or permitted to
      be
      provided hereunder shall be delivered as set forth in the Purchase Agreement.
      

    

    (h)   Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of and be binding upon the successors
      and
      permitted assigns of each of the parties and shall inure to the benefit of
      each
      Holder. The Company may not assign its rights or obligations hereunder without
      the prior written consent of at least a majority of the Registrable Securities;
      provided, however, that the Company may assign its rights and delegate its
      duties hereunder to any surviving, acquiring or successor corporation in
      connection with a merger or consolidation of the Company with another
      corporation, or a sale, transfer or other disposition of all or substantially
      all of the Company’s assets to another corporation, or similar transaction,
      without the prior written consent of the Holders, after notice duly given by
      the
      Company to the Holders.. Each Holder may assign their respective rights
      hereunder in the manner and to the Persons as permitted under the Purchase
      Agreement.

    

    (i)    Execution
      and Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which when
      so
      executed shall be deemed to be an original and, all of which taken together
      shall constitute one and the same Agreement. In the event that any signature
      is
      delivered by facsimile transmission, such signature shall create a valid binding
      obligation of the party executing (or on whose behalf such signature is
      executed) the same with the same force and effect as if such facsimile signature
      were the original thereof.

    

    (j)    Governing
      Law.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be determined with the provisions of the Purchase
      Agreement.

    

    (k)   Cumulative
      Remedies.
      The
      remedies provided herein are cumulative and not exclusive of any remedies
      provided by law.

    

    (l)    Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction to be invalid, illegal, void or unenforceable, the
      remainder of the terms, provisions, covenants and restrictions set forth herein
      shall remain in full

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    force
      and
      effect and shall in no way be affected, impaired or invalidated, and the parties
      hereto shall use their commercially reasonable efforts to find and employ an
      alternative means to achieve the same or substantially the same result as that
      contemplated by such term, provision, covenant or restriction. It is hereby
      stipulated and declared to be the intention of the parties that they would
      have
      executed the remaining terms, provisions, covenants and restrictions without
      including any of such that may be hereafter declared invalid, illegal, void
      or
      unenforceable.

    

    (m)   Headings.
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof.

    

    (n)   Independent
      Nature of Holders’ Obligations and Rights.
      The
      obligations of each Holder hereunder are several and not joint with the
      obligations of any other Holder hereunder, and no Holder shall be responsible
      in
      any way for the performance of the obligations of any other Holder hereunder.
      Nothing contained herein or in any other agreement or document delivered at
      any
      closing, and no action taken by any Holder pursuant hereto or thereto, shall
      be
      deemed to constitute the Holders as a partnership, an association, a joint
      venture or any other kind of entity, or create a presumption that the Holders
      are in any way acting in concert with respect to such obligations or the
      transactions contemplated by this Agreement. Each Holder shall be entitled
      to
      protect and enforce its rights, including without limitation the rights arising
      out of this Agreement, and it shall not be necessary for any other Holder to
      be
      joined as an additional party in any proceeding for such purpose.

    

    (o)   Holder
      Cooperation. The Holders shall cooperate with the Company, as reasonably
      requested by the Company, in connection with the preparation and filing of
      any
      Registration Statement hereunder. The Company may require a Holder to promptly
      furnish in writing to the Company such information as may be required in
      connection with such registration including, without limitation, all such
      information as may be requested by the Commission or the NASD or any state
      securities commission and all such information regarding the Holder, the
      Registrable Securities held by the Holder and the intended method of disposition
      of the Registrable Securities. Each Holder agrees to provide such information
      requested in connection with such registration within a reasonable time after
      receiving such written request. The Company may exclude from such
      registration the Registrable Securities of any such Holder who fails to furnish
      such information within a reasonable time prior to the filing of each
      Registration Statement, supplemented Prospectus and/or amended Registration
      Statement.

    

    Each
      Holder shall be responsible for the delivery of the Prospectus to the Persons
      to
      whom the Holder sells the Registrable Securities to the extent required by
      applicable law, and each Holder agrees to dispose of Registrable Securities
      in
      compliance with the plan of distribution described in the Registration Statement
      and otherwise in compliance with applicable federal and state securities
      laws.

     

    ********************

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
      as
      of the date first written above.

    

    

    
      	 	
              NUTRACEA

            
	 	 
	 	
              By:

            	
                

            
	 	 	
              Name:
                Bradley Edson

            
	 	 	
              Title:
                President

            

    

    

     

    [SIGNATURE
      PAGE OF HOLDERS FOLLOWS]

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    [PURCHASER’S
      SIGNATURE PAGE TO NUTRACEA REGISTRATION RIGHTS AGREEMENT]

    

    Entity
      Investors

    

    Name
      of
      Investing Entity: __________________________

    

    Signature
      of Authorized Signatory of Investing Entity:
      __________________________

    Name
      of
      Authorized Signatory: _________________________

    Title
      of
      Authorized Signatory: __________________________

    

    

    Individual
      Investors

    

    Name
      of
      Investing Individual: __________________________

    

    Signature
      of Investing Individual:
      __________________________

     

    [SIGNATURE
      PAGES CONTINUE]

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    ANNEX
      A

    

    Plan
      of Distribution

     

    Each
      Selling Stockholder (the “Selling
      Stockholders”)
      of the
      common stock (“Common
      Stock”)
      of
      NutraCea, a California corporation (the “Company”)
      and
      any of their pledgees, assignees and successors-in-interest may, from time
      to
      time, sell any or all of their shares of Common Stock on the Trading Market
      or
      any other stock exchange, market or trading facility on which the shares are
      traded or in private transactions. These sales may be at fixed or negotiated
      prices. A Selling Stockholder may use any one or more of the following methods
      when selling shares:

     

    
      	 	
              ·

            	
              ordinary
                brokerage transactions and transactions in which the broker-dealer
                solicits purchasers;

            

    

     

    
      	 	
              ·

            	
              block
                trades in which the broker-dealer will attempt to sell the shares
                as agent
                but may position and resell a portion of the block as principal to
                facilitate the transaction;

            

    

     

    
      	 	
              ·

            	
              purchases
                by a broker-dealer as principal and resale by the broker-dealer for
                its
                account;

            

    

     

    
      	 	
              ·

            	
              an
                exchange distribution in accordance with the rules of the applicable
                exchange;

            

    

     

    
      	 	
              ·

            	
              privately
                negotiated transactions;

            

    

     

    
      	 	
              ·

            	
              settlement
                of short sales entered into after the date of this
                prospectus;

            

    

     

    
      	 	
              ·

            	
              broker-dealers
                may agree with the Selling Stockholders to sell a specified number
                of such
                shares at a stipulated price per
                share;

            

    

     

    
      	 	
              ·

            	
              a
                combination of any such methods of
                sale;

            

    

     

    
      	 	
              ·

            	
              through
                the writing or settlement of options or other hedging transactions,
                whether through an options exchange or otherwise;
                or

            

    

     

    
      	 	
              ·

            	
              any
                other method permitted pursuant to applicable
                law.

            

    

     

    The
      Selling Stockholders may also sell shares under Rule 144 under the Securities
      Act of 1933, as amended (the “Securities
      Act”),
      if
      available, rather than under this prospectus.

    

    Broker-dealers
      engaged by the Selling Stockholders may arrange for other brokers-dealers to
      participate in sales. Broker-dealers may receive commissions or discounts from
      the Selling Stockholders (or, if any broker-dealer acts as agent for the
      purchaser of shares, from the purchaser) in amounts to be negotiated. Each
      Selling Stockholder does not expect these commissions and discounts relating
      to
      its sales of shares to exceed what is customary in the types of transactions
      involved.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    In
      connection with the sale of our common stock or interests therein, the Selling
      Stockholders may enter into hedging transactions with broker-dealers or other
      financial institutions, which may in turn engage in short sales of the common
      stock in the course of hedging the positions they assume. The Selling
      Stockholders may also sell shares of our common stock short and deliver these
      securities to close out their short positions, or loan or pledge the common
      stock to broker-dealers that in turn may sell these securities. The Selling
      Stockholders may also enter into option or other transactions with
      broker-dealers or other financial institutions or the creation of one or more
      derivative securities which require the delivery to such broker-dealer or other
      financial institution of shares offered by this prospectus, which shares such
      broker-dealer or other financial institution may resell pursuant to this
      prospectus (as supplemented or amended to reflect such
      transaction).

    

    The
      Selling Stockholders and any broker-dealers or agents that are involved in
      selling the shares may be deemed to be “underwriters” within the meaning of the
      Securities Act in connection with such sales. In such event, any commissions
      received by such broker-dealers or agents and any profit on the resale of the
      shares purchased by them may be deemed to be underwriting commissions or
      discounts under the Securities Act. Discounts, concessions, commissions and
      similar selling expenses, if any, that can be attributed to the sale of
      securities will be paid by the Selling Stockholders and/or the purchasers.
      Each
      Selling Stockholder has informed the Company that it does not have any agreement
      or understanding, directly or indirectly, with any person to distribute the
      Common Stock.

    

    The
      Company is required to pay certain fees and expenses incurred by the Company
      incident to the registration of the shares. The Company has agreed to indemnify
      the Selling Stockholders against certain losses, claims, damages and
      liabilities, including liabilities under the Securities Act. 

    

    Because
      Selling Stockholders may be deemed to be “underwriters” within the meaning of
      the Securities Act, they will be subject to the prospectus delivery requirements
      of the Securities Act. In addition, any securities covered by this prospectus
      which qualify for sale pursuant to Rule 144 under the Securities Act may be
      sold
      under Rule 144 rather than under this prospectus. Each Selling Stockholder
      has
      advised us that they have not entered into any agreements, understandings or
      arrangements with any underwriter or broker-dealer regarding the sale of the
      resale shares. There is no underwriter or coordinating broker acting in
      connection with the proposed sale of the resale shares by the Selling
      Stockholders.

    

    We
      agreed
      to keep this prospectus effective until the earlier of (i) three years after
      the
      initial sale of the resale shares, (ii) the date on which the shares may be
      resold by the Selling Stockholders without registration and without regard
      to
      any volume limitations by reason of Rule 144(e) under the Securities Act or
      any
      other rule of similar effect or (iii) all of the shares have been sold pursuant
      to the prospectus or Rule 144 under the Securities Act or any other rule of
      similar effect. The resale shares will be sold only through registered or
      licensed brokers or dealers if required under applicable state securities laws.
      In addition, in certain states, the resale shares may not be sold unless they
      have been registered or qualified for sale in the applicable state or an
      exemption from the registration or qualification requirement is available and
      is
      complied with.

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    Under
      applicable rules and regulations under the Exchange Act, any person engaged
      in
      the distribution of the resale shares may not simultaneously engage in market
      making activities with respect to our common stock for a period of two business
      days prior to the commencement of the distribution. In addition, the Selling
      Stockholders will be subject to applicable provisions of the Exchange Act and
      the rules and regulations thereunder, including Regulation M, which may limit
      the timing of purchases and sales of shares of our common stock by the Selling
      Stockholders or any other person. We will make copies of this prospectus
      available to the Selling Stockholders and have informed them of the need to
      deliver a copy of this prospectus to each purchaser at or prior to the time
      of
      the sale.

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    Annex
      B

     

    NUTRACEA

     

    Selling
      Securityholder Notice and Questionnaire

     

    The
      undersigned beneficial owner of common stock, par value $0.001 per share (the
      “Common
      Stock”),
      of
      NutraCea, a California corporation (the “Company”),
      (the
“Registrable
      Securities”)
      understands that the Company has filed or intends to file with the Securities
      and Exchange Commission (the “Commission”)
      a
      registration statement on Form SB-2 (the “Registration
      Statement”)
      for
      the registration and resale under Rule 415 of the Securities Act of 1933, as
      amended (the “Securities
      Act”),
      of
      the Registrable Securities, in accordance with the terms of the Registration
      Rights Agreement, dated as of September 28, 2005 (the “Registration
      Rights Agreement”),
      among
      the Company and the Purchasers named therein. A copy of the Registration Rights
      Agreement is available from the Company upon request at the address set forth
      below. All capitalized terms not otherwise defined herein shall have the
      meanings ascribed thereto in the Registration Rights Agreement. BENEFICIAL
      OWNERS THAT DO NOT COMPLETE THIS NOTICE AND QUESTIONNAIRE AND TIMELY DELIVER
      IT
      TO NUTRACEA SHALL NOT BE NAMED AS SELLING SECURITYHOLDERS IN THE PROSPECTUS
      INCLUDED IN THE REGISTRATION STATEMENT AND THEREFORE SHALL NOT BE PERMITTED
      TO
      SELL ANY REGISTRABLE SHARES PURSUANT TO THE RESALE REGISTRATION
      STATEMENT.

    

    Certain
      legal consequences arise from being named as a selling securityholder in the
      Registration Statement and the related prospectus. Accordingly, holders and
      beneficial owners of Registrable Securities are advised to consult their own
      securities law counsel regarding the consequences of being named or not being
      named as a selling securityholder in the Registration Statement and the related
      prospectus.

    

    NOTICE

     

    The
      undersigned beneficial owner (the “Selling
      Securityholder”)
      of
      Registrable Securities hereby elects to include the Registrable Securities
      owned
      by it and listed below in Item 3 (unless otherwise specified under such Item
      3)
      in the Registration Statement. The undersigned, by signing and returning this
      Notice and Questionnaire, understands that it will be bound by the terms and
      conditions of this Notice and Questionnaire and the Registration Rights
      Agreement. Upon any sale of Registrable Securities pursuant to the Registration
      Statement, the undersigned will be required to deliver to the Company the Notice
      of Transfer (completed and signed) set forth in Exhibit
      1
      attached
      hereto and hereby undertakes to do so.

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    The
      undersigned hereby provides the following information to the Company and
      represents and warrants that such information is accurate:

     

    QUESTIONNAIRE

     

    
      
        
          	1.	
                  Name.

                

        

      

       

      
        	
                (a)

              	
                Full
                  Legal Name of Selling Securityholder

              
	 	 
	 	
                  

              
	 	 
	
                (b)

              	
                Full
                  Legal Name of Registered Holder (if not the same as (a) above)
                  through
                  which Registrable Securities Listed in Item 3 below are
                  held:

              
	 	 
	 	
                  

              
	 	 
	
                (c)

              	
                Full
                  Legal Name of Natural Control Person (which means a natural person
                  who
                  directly you indirectly alone or with others has power to vote
                  or dispose
                  of the securities covered by the questionnaire):

              
	 	 
	 	
                  

              

      

    

    

     

    
      	
              2.

            	
              Address
                for Notices to Selling
                Securityholder:

            

    

     

    
      	
                

            
	
                

            
	
                

            
	
              Telephone:

            	
                

            
	
              Fax:

            	
                

            
	
              Contact
                Person:

            	
                

            

    

     

    
      
        
          	3.	
                  Beneficial
                    Ownership of Registrable
                    Securities:

                

        

         

      

      
        	
                (a)

              	
                Type
                  and Number of Registrable Securities beneficially
                  owned:

              
	 	 
	 	
                  

              
	 	
                  

              
	 	
                  

              

      

    

    

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

     

    
      	
              4.

            	
              Broker-Dealer
                Status:

            

    

     

    
      	 	
              (a)

            	
              Are
                you a broker-dealer?

            

    

     

    
      	
              Yes
                o

            	 	
              No
                o

            

    

     

    
      	 	
              Note:

            	
              If
                yes, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.

            

    

     

    
      	 	
              (b)

            	
              Are
                you an affiliate of a
                broker-dealer?

            

    

     

    
      	
              Yes
                o

            	 	
              No
                o

            

    

     

    
      	 	
              (c)

            	
              If
                you are an affiliate of a broker-dealer, do you certify that you
                bought
                the Registrable Securities in the ordinary course of business, and
                at the
                time of the purchase of the Registrable Securities to be resold,
                you had
                no agreements or understandings, directly or indirectly, with any
                person
                to distribute the Registrable
                Securities?

            

    

     

    
      	
              Yes
                o

            	 	
              No
                o

            

    

     

    
      	 	
              Note:

            	
              If
                no, the Commission’s staff has indicated that you should be identified as
                an underwriter in the Registration
                Statement.

            

    

     

    
      	
              5.

            	
              Beneficial
                Ownership of Other Securities of the Company Owned by the Selling
                Securityholder.

            

    

     

    Except
      as set forth below in this Item 5, the undersigned is not the beneficial or
      registered owner of any securities of the Company other than the Registrable
      Securities listed above in Item 3.

     

    
      	
              (a)

            	
              Type
                and Amount of Other Securities beneficially owned by the Selling
                Securityholder:

            
	 	 
	 	
                

            
	 	
                

            

    

     

    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

     

    
      	
              6.

            	
              Relationships
                with the Company:

            

    

     

    Except
      as set forth below, neither the undersigned nor any of its affiliates, officers,
      directors or principal equity holders (owners of 5% of more of the equity
      securities of the undersigned) has held any position or office or has had any
      other material relationship with the Company (or its predecessors or affiliates)
      during the past three years.

     

    
      	
              State
                any exceptions here:

            
	 
	
                

            
	
                

            

    

    

     

    By
      signing below, the undersigned acknowledges that it understands its obligation
      to comply with the provisions of the Securities Exchange Act of 1934, as
      amended, and the Rules thereunder relating to stock manipulation, particularly
      Regulation M thereunder (or any successor Rules or regulations), in connection
      with any offering of Registrable Securities pursuant to a Registration
      Statement. The undersigned agrees that neither it nor any person acting on
      its
      behalf will engage in any transaction in violation of such provisions. The
      undersigned agrees to promptly notify the Company of any inaccuracies or changes
      in the information provided herein that may occur subsequent to the date hereof
      at any time while the Registration Statement remains effective. All notices
      hereunder shall be made in writing at the address set forth below.

    

    By
      signing below, the undersigned consents to the disclosure of the information
      contained herein in its answers to Items 1 through 6 and the inclusion of such
      information in the Registration Statement and the related prospectus. The
      undersigned understands that such information will be relied upon by the Company
      in connection with the preparation or amendment of the Registration Statement
      and the related prospectus.

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
      and Questionnaire to be executed and delivered either in person or by its duly
      authorized agent.

    

    
      	
              Dated:

            	
                

            	 	
              Beneficial
                Owner:

            	
                

            

    

    

    
      	 	
              By:

            	
                

            
	 	 	
              Name:

            
	 	 	
              Title:

            

    

    

    PLEASE
      FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
      THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

    NutraCea,
      Inc.

    1261
      Hawk’s Flight Court

    El
      Dorado
      Hills, CA 95762

    Attention:
      CFO

    Fax
      No.
      (916) 933-7001

     

    
      
        
          
          

        

        
          24

          
            

          

        

        
          
          

        

      

    

    

    EXHIBIT
      1

    NOTICE
      OF
      TRANSFER PURSUANT TO REGISTRATION STATEMENT

    

    Weintraub
      Genshlea Chediak law corporation

    400
      Capitol Mall, Suite 1100

    Sacramento,
      CA 95814

    Telephone
      No.: (916) 558-6110

    Facsimile
      No.:    (916) 446-1611

    Attention:
      Christopher Chediak, Esq.

    

    

    RE:
      NUTRACEA (THE "COMPANY") COMMON STOCK TRANSFER 

    

    Dear
      Sirs:

    

    Please
      be
      advised that __________ has transferred ___________ shares of the Company's
      Common Stock pursuant to the Registration Statement on Form SB-2 (File
      No.___-______) filed by the Company. We hereby certify that the prospectus
      delivery requirements, if any, of the Securities Act of 1933, as amended, have
      been satisfied with respect to the transfer described above and that the
      above-named beneficial owner of the Common Stock is named as a selling
      securityholder in the Prospectus dated __________, 200_ or in amendments or
      supplements thereto, and that the number of shares of Common Stock transferred
      are all/a portion (please circle as appropriate) of the Common Stock listed
      for
      resale in such Prospectus as amended or supplemented opposite such owner's
      name.

    

    
      	 	
              Very
                truly yours,

            
	 	 
	 	
                

            
	 	
              (Name)

            

    

    

    
      	 	
              By:

            	
                

            
	 	 	
              (Authorized
                Signature)

            

    

     

    25PROMISSORY NOTE
                                  (Demand Note)

$156,210                                                            May 23, 2005

FOR VALUE RECEIVED, ACCUPOLL HOLDING CORP., a Nevada corporation ("Maker"),
hereby promises to pay to Philip G. Trubey ("Payee"), the principal sum of One
Hundred Fifty Six Thousand, Two Hundred and Ten and 00/100 Dollars ($156,210.00)
(the "Principal Amount"), plus interest in arrears on the unpaid Principal
Amount from and after the date hereof, at the Interest Rate (as such term is
defined below), subject to and in accordance with the following:

            1. Due on Demand. Payee may, by delivering a written demand notice
to Maker, demand payment of all or any portion of the Principal Amount of this
Note and/or accrued but unpaid interest at any time after the date hereof until
May 23, 2007 (the "Maturity Date") at which time the Principal Amount and all
accrued but unpaid interest shall be due in full. Any amounts demanded by Payee
prior to the Maturity Date, if any, shall be due and payable within 30 days of
receipt by Maker of the written demand notice.

            2. Interest Rate. The "Interest Rate" on the unpaid principal
balance shall be Ten Percent (10.00%) per annum. Interest hereon shall be
calculated on the basis of the actual number of days elapsed in a 360-day year.

            3. Manner of Payment. All payments of principal and interest on this
Note shall be made by check or cash at such place in the United States of
America as Payee shall designate to Maker in writing. If any payment of
principal or interest on this Note is due on a day which is not a Business Day,
such payment shall be due on the next succeeding Business Day and such extension
of time shall be taken into account in calculating the amount of interest
payable under this Note. "Business Day" means any day other than a Saturday,
Sunday or legal holiday in the State of California. All payments shall be first
applied to the payment of accrued interest due under this Note, and then to the
Principal Amount then remaining unpaid.

            4. Prepayment. Maker may, without premium or penalty, at any time,
prepay all or any portion of the outstanding principal balance due under this
Note. Any prepayment shall be accompanied by accrued interest on the amount of
principal prepaid calculated to the date of such prepayment.

            5. Remedies. If any required principal and/or interest payment is
not made by Maker to Payee within 30 days of demand by Payee or by the Maturity
Date, Payee may exercise any and all rights and remedies available to Payee
under applicable law, including, without limitation, the right to collect from
Maker all sums due under this Note.

            6. Waivers. Maker hereby waives delinquency in collection, demand
for payment, presentment for payment, protest, notice of protest and notice of
dishonor.

            7. No Action. Payee shall not commence or join with any other
creditor of Maker to commence any bankruptcy, insolvency, reorganization or
other similar proceeding against Maker.

                                      -1-
<PAGE>

            8. Miscellaneous. This Note (i) shall be interpreted and enforced in
accordance with the laws of the State of California, and shall be deemed to have
been executed and delivered in the State of California, (ii) may amended only by
an agreement in writing signed by the parties against whom enforcement of any
waiver, change, modification or discharge is sought, (iii) shall be binding upon
and inure to the benefit of the parties hereto, and their respective permitted
successors and assigns and (iv) may not be transferred or assigned by operation
of law or otherwise by Payee without Maker's prior written consent.

            IN WITNESS WHEREOF, Maker has executed this Note as of the date
first written above.

MAKER:                                          PAYEE:

ACCUPOLL HOLDING CORP.                          AGREED TO AND ACKNOWLEDGED
A NEVADA CORPORATION                            BY PAYEE THIS  23 DAY
                                                OF May 2005

--------------------------------                --------------------------------
By:                                             Philip G. Trubey
    ----------------------------

                                      -2-

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