Document:

[GRAPHIC OMITTED] ROTH Capital Partners

                                                               Exhibit No. 10.30
                                    May 24, 2006

Mr. James M. Williams
President & CEO
Monterey Gourmet Foods, Inc.
1528 Moffett Street
Salinas, CA 93905

         Re:      Engagement Letter

Dear Jim:

Roth Capital Partners, LLC ("we" or "Roth") is pleased to act as the exclusive
financial advisor and placement agent for Monterey Gourmet Foods, Inc. ("you" or
the "Company") in connection with your proposed private placement. The terms of
our engagement are set forth below. We look forward to working with you.

         1.  The Offering.

         (a) We currently anticipate raising approximately $15 million through a
"PIPE" transaction involving the sale of securities to institutional investors.
The actual terms of the offering will depend on market conditions, and will be
subject to negotiation between the Company and Roth and prospective investors.

         (b) Although we cannot guarantee you that we will be able to raise new
capital, we will conduct the offering on a best efforts basis.

         (c) In turn, during the term of our engagement, you agree not to use
any other investment banking firm to raise capital (including debt) for you.

         2.  Fees and Expenses.

         (a) Concurrently with the consummation of the offering, the Company
will pay us in cash a fee equal to 6% of the gross proceeds received from the
sale of securities.

         (b) In addition, the Company agrees to reimburse Roth upon request for
its out-of-pocket expenses, including the fees and disbursements of Roth's legal
counsel, up to $35,000.

                           ROTH CAPITAL PARTNERS, LLC
    24 CORPORATE PLAZA, NEWPORT BEACH, CA 926600 800.678.9147 www.rothcp.com
                                Member SIPC/NASD
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 2

         3.  Term of Engagement.

         (a) The term of our engagement will be three months; however, either
party may terminate our engagement at any time upon 10 days written notice to
the other party. Upon termination, we will be entitled to collect all fees
earned and expenses incurred through the date of termination.

         (b) If the offering is not consummated during the term, for reasons
other than termination of this engagement by us, and during the twelve months
following termination of this Agreement, either (i) the Company completes an
offering of its securities, or (ii) any person which we introduced to the
Company or with which we have discussions or negotiations during the term on
behalf of the Company, purchases securities from the Company (other than through
a underwritten public offering), you agree to pay us upon the closing a cash fee
in the amount that would otherwise have been payable to Roth had such
transaction occurred during the term. In the case of a merger, acquisition,
joint venture or other strategic transaction with such person, the cash fee will
be $720,000.00.

         4.  Offering Memorandum; Representations and Warranties.

         (a) You hereby authorize Roth to transmit to the prospective purchasers
of the securities a private placement memorandum prepared by the Company with
such exhibits and supplements as may from time to time be required or
appropriate or, alternatively, copies of the Company's most recent filings with
the Securities and Exchange Commission, together with summary materials prepared
by the Company, if we deem them appropriate (as the case may be, the
"Memorandum"). The Company represents and warrants that the Memorandum (i) will
be prepared by the management of the Company and reviewed and approved by its
Board of Directors; and (ii) will not contain any 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 or previously made, in light of the circumstances
under which they were made, not misleading. The Company will advise Roth
immediately of the occurrence of any event or any other change known to the
Company which results in the Memorandum containing an untrue statement of a
material fact or omitting to state a material fact required to be stated therein
or necessary to make the statements therein or previously made, in light of the
circumstances under which they were made, not misleading.

         (b) You agree that you will enter into subscription, registration
rights and other customary agreements, and that your counsel will supply an
opinion letter on the transaction, all of which will be in form and substance
reasonably acceptable to, and addressed to, us and the investors.
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 3

         (c) You further agree that we may rely upon, and are a third party
beneficiary of, the representations and warranties, and applicable covenants,
set forth in any agreements with investors in the offering.

         (d) In conjunction with the filing of the resale registration statement
for investors pursuant to the Registration Rights Agreement, if the Company does
not meet the requirements for S-3 eligibility that existed in October 1992
(essentially, that it have a non-affiliate float of $150 million, or a
non-affiliate float of $100 million and $3 million share annual trading volume,
within 60 days of filing, and that it have been subject to the reporting
requirements of the Securities Exchange Act of 1934 for 3 years, and current in
that reporting for one year), the Company will file with the NASD, via the COBRA
desk filing system, for approval of underwriting compensation under Section 2710
of the rules and regulations of the NASD, obtain from the NASD a standard
clearance letter, and coordinate with the placement agent on filings it will be
required to make upon sales under the registration statement.

         5. Indemnification, Contribution, and Confidentiality. The Company
agrees to indemnify Roth and its controlling persons, representatives and agents
in accordance with the indemnification provisions set forth in Appendix I, and
the parties agree to the confidentiality provisions of Appendix II, all of which
are incorporated herein by this reference. These provisions will apply
regardless of whether the proposed offering is consummated.

         6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the state of California applicable to contracts
executed and to be wholly performed therein without giving effect to its
conflicts of laws principles or rules. The Company and Roth agree that any
dispute concerning this Agreement this Agreement shall be resolved through
binding arbitration before the NASD pursuant to its arbitration rules.
Arbitration will be venued in Los Angeles County.

         7. Announcement of Offering. If the Offering is consummated, Roth may,
at its expense, place an announcement in such newspapers and periodicals as Roth
may desire.

         8. Advice to the Board. The Company acknowledges that any advice given
by us to you is solely for benefit and use of the Board of Directors of the
Company and may not be used, reproduced, disseminated, quoted or referred to,
other than to members of the Board of Directors, without our prior written
consent.

         9. Entire Agreement. This Agreement constitutes the entire Agreement
between the parties and supersedes and cancels any and all prior or
contemporaneous arrangements, understandings and agreements, written or oral,
between them relating to the subject matter hereof.
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 4

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 5

         We look forward to working with you toward the successful conclusion of
this engagement, and developing a long-term relationship with the Company.

Very truly yours,

ROTH CAPITAL PARTNERS, LLC

By: ____________________________________
    Joseph Schimmelpfennig
    Managing Director

    Confirmed and accepted as of
    this _____________ day of _________, 2006:

MONTEREY GOURMET FOODS, INC.

By: ____________________________________
    Mr. James M. Williams
    President & CEO
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 6

                                   APPENDIX I
                                   ----------

                        INDEMNIFICATION AND CONTRIBUTION

         The Company agrees to indemnify and hold harmless Roth and its
affiliates (as defined in Rule 405 under the Securities Act of 1933, as amended)
and their respective directors, officers, employees, agents and controlling
persons (Roth and each such person being an "Indemnified Party") from and
against all losses, claims, damages and liabilities (or actions, including
shareholder actions, in respect thereof), joint or several, to which such
Indemnified Party may become subject under any applicable federal or state law,
or otherwise, which are related to or result from the performance by Roth of the
services contemplated by or the engagement of Roth pursuant to, this Agreement
and will promptly reimburse any Indemnified Party for all reasonable expenses
(including reasonable counsel fees and expenses) as they are incurred in
connection with the investigation of, preparation for or defense arising from
any threatened or pending claim, whether or not such Indemnified Party is a
party but excluding from such right to reimbursement of expenses as they are
incurred expenses incurred by an Indemnified Party in connection with any claim,
action or proceeding which is initiated or brought by the Company. The Company
will not be liable to any Indemnified Party under the foregoing indemnification
and reimbursement provisions, (i) for any settlement by an Indemnified Party
effected without its prior written consent (not to be unreasonably withheld); or
(ii) to the extent that any loss, claim, damage or liability is found in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted primarily from Roth's willful misconduct or gross negligence. The
Company also agrees that no Indemnified Party shall have any liability (whether
direct or indirect, in contract or tort or otherwise) to the Company or its
security holders or creditors related to or arising out of the engagement of
Roth pursuant to, or the performance by Roth of the services contemplated by,
this Agreement except to the extent that any loss, claim, damage or liability is
found in a final, non-appealable judgment by a court of competent jurisdiction
to have resulted primarily from Roth's willful misconduct or gross negligence.

         Promptly after receipt by an Indemnified Party of notice of any
intention or threat to commence an action, suit or proceeding or notice of the
commencement of any action, suit or proceeding, such Indemnified Party will, if
a claim in respect thereof is to be made against the Company pursuant hereto,
promptly notify the Company in writing of the same. In case any such action is
brought against any Indemnified Party and such Indemnified Party notifies the
Company of the commencement thereof, the Company may elect to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Party, and an
Indemnified Party may employ counsel to participate in the defense of any such
action provided, that the employment of such counsel shall be at the Indemnified
Party's own expense, unless (i) the employment of such counsel has been
authorized in writing by the Company, (ii) the Indemnified Party has reasonably
concluded (based upon advice of counsel to the Indemnified Party) that there may
be legal defenses available to it or other Indemnified Parties that are
different from or in addition to those available to the Company, or that a
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 7

conflict or potential conflict exists (based upon advice of counsel to the
Indemnified Party) between the Indemnified Party and the Company that makes it
impossible or inadvisable for counsel to the Indemnifying Party to conduct the
defense of both the Company and the Indemnified Party (in which case the Company
will not have the right to direct the defense of such action on behalf of the
Indemnified Party), or (iii) the Company has not in fact employed counsel
reasonably satisfactory to the Indemnified Party to assume the defense of such
action within a reasonable time after receiving notice of the action, suit or
proceeding, in each of which cases the reasonable fees, disbursements and other
charges of such counsel will be at the expense of the Company; provided,
further, that in no event shall the Company be required to pay fees and expenses
for more than one firm of attorneys representing Indemnified Parties unless the
defense of one Indemnified Party is unique or separate from that of another
Indemnified Party subject to the same claim or action. Any failure or delay by
an Indemnified Party to give the notice referred to in this paragraph shall not
affect such Indemnified Party's right to be indemnified hereunder, except to the
extent that such failure or delay causes actual harm to the Company, or
prejudices its ability to defend such action, suit or proceeding on behalf of
such Indemnified Party.

         If the indemnification provided for in this Agreement is for any reason
held unenforceable by an Indemnified Party, the Company agrees to contribute to
the losses, claims, damages and liabilities for which such indemnification is
held unenforceable (i) in such proportion as is appropriate to reflect the
relative benefits to the Company, on the one hand, and Roth on the other hand,
of the Offering as contemplated whether or not the Offering is consummated or,
(ii) if (but only if) the allocation provided for in clause (i) is for any
reason unenforceable, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) but also the relative fault of
the Company, on the one hand and Roth, on the other hand, as well as any other
relevant equitable considerations. The Company agrees that for the purposes of
this paragraph the relative benefits to the Company and Roth of the Offering as
contemplated shall be deemed to be in the same proportion that the total value
received or contemplated to be received by the Company or its shareholders, as
the case may be, as a result of or in connection with the Offering bear to the
fees paid or to be paid to Roth under this Agreement. Notwithstanding the
foregoing, the Company expressly agrees that Roth shall not be required to
contribute any amount in excess of the amount by which fees paid Roth hereunder
(excluding reimbursable expenses), exceeds the amount of any damages which Roth
has otherwise been required to pay.

         The Company agrees that without Roth's prior written consent, which
shall not be unreasonably withheld, it will not settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding in respect of which indemnification could be sought under the
indemnification provisions of this Agreement (in which Roth or any other
Indemnified Party is an actual or potential party to such claim, action or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising out
of such claim, action or proceeding.
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 8

         In the event that an Indemnified Party is requested or required to
appear as a witness in any action brought by or on behalf of or against the
Company in which such Indemnified Party is not named as a defendant, the Company
agrees to promptly reimburse Roth on a monthly basis for all expenses incurred
by it in connection with such Indemnified Party's appearing and preparing to
appear as such a witness, including, without limitation, the reasonable fees and
disbursements of its legal counsel.

         If multiple claims are brought with respect to at least one of which
indemnification is permitted under applicable law and provided for under this
Agreement, The Company agrees that any judgment or arbitrate award shall be
conclusively deemed to be based on claims as to which indemnification is
permitted and provided for, except to the extent the judgment or arbitrate award
expressly states that it, or any portion thereof, is based solely on a claim as
to which indemnification is not available.
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 9

                                   APPENDIX II
                                   -----------

                  INFORMATION TO BE SUPPLIED; CONFIDENTIALITY.

         In connection with Roth's activities on behalf of the Company, the
Company will furnish Roth with all financial and other information regarding the
Company that Roth reasonably believes appropriate to its assignment (all such
information so furnished by the Company, whether furnished before or after the
date of this Agreement, being referred to herein as the "Information"). The
Company will provide Roth with access to the officers, directors, employees,
independent accountants, legal counsel and other advisors and consultants of the
Company. The Company recognizes and agrees that Roth (i) will use and rely
primarily on the Information and information available from generally recognized
public sources in performing the services contemplated by this Agreement without
independently verifying the Information or such other information, (ii) does not
assume responsibility for the accuracy of the Information or such other
information, and (iii) will not make an appraisal of any assets or liabilities
owned or controlled by the Company or its market competitors.

         Roth will maintain the confidentiality of the Information and, unless
and until such information shall have been made publicly available by the
Company or by others without breach of a confidentiality agreement, shall
disclose the Information only as authorized by the Company or as required by law
or by order of a governmental authority or court of competent jurisdiction. In
the event that Roth is legally required to make disclosure of any of the
Information, Roth will give notice to the Company prior to such disclosure, to
the extent that Roth can practically do so.

The foregoing paragraph shall not apply to information that:

         (i)   at the time of disclosure by the Company is, or thereafter
               becomes, generally available to the public or within the
               industries in which the Company or Roth or its affiliates conduct
               business, other than as a direct result of a breach by Roth of
               its obligations under this Agreement;

         (ii)  prior to or at the time of disclosure by the Company, was already
               in the possession of, or conceived by, Roth or any of its
               affiliates, or could have been developed by them from information
               then in their possession, by the application of other information
               or techniques in their possession, generally available to the
               public, or available to Roth or its affiliates other than from
               the Company;

         (iii) at the time of disclosure by the Company or thereafter, is
               obtained by Roth or any of its affiliates from a third party who
               Roth reasonably believes to be in possession of the information
               not in violation of any contractual, legal or fiduciary
               obligation to the Company with respect to that information; or
<PAGE>

Mr. James M. Williams
Monterey Gourmet Foods, Inc
May 24, 2006
Page 10

         (iv) is independently developed by Roth or its affiliates.

         Nothing in this Agreement shall be construed to limit the ability of
Roth or its affiliates to pursue, investigate, analyze, invest in, or engage in
investment banking, financial advisory or any other business relationship with
entities other than the Company, notwithstanding that such entities may be
engaged in a business which is similar to or competitive with the business of
the Company, and notwithstanding that such entities may have actual or potential
operations, products, services, plans, ideas, customers or supplies similar or
identical to the Company's, or may have been identified by the Company as
potential merger or acquisition targets or potential candidates for some other
business combination, cooperation or relationship. The Company expressly
acknowledges and agrees that it does not claim any proprietary interest in the
identity of any other entity in its industry or otherwise, and that the identity
of any such entity is not confidential information.Exhibit 10.31

                                                                       EXHIBIT B

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, THEY MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
BY SUCH SECURITIES.

                          MONTEREY GOURMET FOODS, INC.

                                     WARRANT

Warrant No. [  ]                             Original Issue Date: June [ ], 2006

         Monterey Gourmet Foods, Inc., a Delaware corporation (the "Company"),
hereby certifies that, for value received, [      ] or its registered assigns
(the "Holder"), is entitled to purchase from the Company up to a total of
[        ](1) shares of Common Stock (each such share, a "Warrant Share" and all
such shares, the "Warrant Shares"), at any time and from time to time from and
after the Original Issue Date and through and including June __, 2011 (the
"Expiration Date"), and subject to the following terms and conditions:

         1.       Definitions. As used in this Warrant, the following terms
shall have the respective definitions set forth in this Section 1. Capitalized
terms that are used and not defined in this Warrant that are defined in the
Purchase Agreement (as defined below) shall have the respective definitions set
forth in the Purchase Agreement.

------------------------
(1)  A number of shares as equals 30% of the Shares issuable to such investor at
     Closing under the Purchase Agreement.
<PAGE>

         "Business Day" means any day except Saturday, Sunday and any day that
is a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close.

         "Common Stock" means the common stock of the Company, par value $0.001
per share, and any securities into which such common stock may hereafter be
reclassified.

         "Exercise Price" means $7.50, subject to adjustment in accordance with
Section 9.

         "Fundamental Transaction" means any of the following: (1) the Company
effects any merger or consolidation of the Company with or into another Person,
(2) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (3) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (4) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property.

         "Original Issue Date" means the Original Issue Date first set forth on
the first page of this Warrant.

         "New York Courts" means the state and federal courts sitting in the
City of New York, Borough of Manhattan.

         "Purchase Agreement" means the Securities Purchase Agreement, dated
June [ ], 2006, to which the Company and the original Holder are parties.

         "Trading Day" means (i) a day on which the Common Stock is traded on a
Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock
is not listed on a Trading Market (other than the OTC Bulletin Board), a day on
which the Common Stock is traded in the over-the-counter market, as reported by
the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any
Trading Market, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its functions
of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day
shall mean a Business Day.

         "VWAP" means on any particular Trading Day or for any particular
period, the volume weighted average trading price per share of Common Stock on
such date or for such period as reported by Bloomberg L.P., or by any successor
performing similar functions.

         2.       Registration of Warrant. The Company shall register this
Warrant upon records to be maintained by the Company for that purpose (the
"Warrant Register"), in the name of the record Holder hereof from time to time.
The Company may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.

                                       2
<PAGE>

         3.       Registration of Transfers. The Company shall register the
transfer of any portion of this Warrant in the Warrant Register, upon surrender
of this Warrant, with the Form of Assignment attached hereto duly completed and
signed, to the Company at its address specified herein. Upon any such
registration or transfer, a new Warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new Warrant, a "New Warrant"),
evidencing the portion of this Warrant so transferred shall be issued to the
transferee and a New Warrant evidencing the remaining portion of this Warrant
not so transferred, if any, shall be issued to the transferring Holder. The
acceptance of the New Warrant by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Warrant.

         4.       Exercise and Duration of Warrants.
                  ---------------------------------

                  (a)      This Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the Original Issue Date
through and including the Expiration Date. At 6:30 p.m., New York City time on
the Expiration Date, the portion of this Warrant not exercised prior thereto
shall be and become void and of no value. Except as provided in Section 4(b)
below, the Company may not call or redeem any portion of this Warrant without
the prior written consent of the affected Holder.

                  (b)      Subject to the provisions of this Section 4(b), if at
any time following the eighteen month anniversary of the Effective Date: (i) the
VWAP of the Common Stock on each Trading Day during any 20 consecutive Trading
Day period, each following such eighteen month anniversary of the Effective Date
is equal to or greater than 200% of the Exercise Price (subject to adjustment
pursuant to Section 9), (ii) the Warrant Shares are either registered for resale
pursuant to an effective registration statement naming the Holder as a selling
stockholder thereunder (and the prospectus thereunder is available for use by
the Holder as to all Warrant Shares) or freely transferable without volume
restrictions pursuant to Rule 144(k) promulgated under the Securities Act
without utilizing the cashless exercise provisions of this Warrant, as
determined by counsel to the Company pursuant to a written opinion letter
addressed and in form and substance reasonably acceptable to the Holder and the
transfer agent for the Common Stock, during the entire 20 Trading Day period
referenced in (i) above through the expiration of the Call Date as set forth in
the Company's notice pursuant to this Section (the "Call Condition Period"),
(iii) the Common Stock shall at all times be listed or quoted on a Trading
Market, then, subject to the conditions set forth in this Section, the Company
may, in its sole discretion, elect to require the exercise of up to all of the
then unexercised portion of this Warrant, on the date that is the third Trading
Day after written notice thereof (a "Call Notice") is received by the Holder
(such third Trading Day shall be known as the "Call Date") at the address last
shown on the records of the Company for the Holder or given by the Holder to the
Company for the purpose of notice; provided, that the conditions to giving such
notice must be in effect at all times during the Call Condition Period (other
than as to clause (i) above which only needs to be satisfied up to the time of
the delivery of the Call Notice) or any such Call Notice shall be null and void.
The Company and the Holder agree that, if and to the extent Section 11 of this
Warrant would restrict the ability of the Holder to exercise this Warrant in the
event of a delivery of a Call Notice, then notwithstanding anything to the
contrary set forth in the Call Notice, the Call Notice shall be deemed
automatically amended to apply only to such portion of this Warrant as may be
exercised by the Holder by the Call Date in accordance with such Section. The

                                       3
<PAGE>

Holder will promptly (and, in any event, prior to the Call Date) notify the
Company in writing following receipt of a Call Notice if Section 11 would
restrict its exercise of the Warrant, specifying therein the number of Warrant
Shares so restricted. The Company covenants and agrees that it will honor all
Exercise Notices tendered through 6:30 p.m. (New York City time) on the Call
Date. Under no circumstances (even if Section 11 would require the amendment of
a Call Notice) may the Company deliver more than one Call Notice in any 90
calendar day period.

         5.       Delivery of Warrant Shares.
                  --------------------------

                  (a)      To effect exercises hereunder, the Holder shall not
be required to physically surrender this Warrant unless the aggregate Warrant
Shares represented by this Warrant is being exercised. Upon delivery of the
Exercise Notice (in the form attached hereto) to the Company (with the attached
Warrant Shares Exercise Log) at its address for notice set forth herein and upon
payment of the Exercise Price multiplied by the number of Warrant Shares that
the Holder intends to purchase hereunder, the Company shall promptly (but in no
event later than three Trading Days after the Date of Exercise (as defined
herein)) issue and deliver to the Holder, a certificate for the Warrant Shares
issuable upon such exercise, which, unless otherwise required by the Purchase
Agreement, shall be free of restrictive legends. The Company shall, upon request
of the Holder and subsequent to the date on which a registration statement
covering the resale of the Warrant Shares has been declared effective by the
Securities and Exchange Commission, use its reasonable best efforts to deliver
Warrant Shares hereunder electronically through the Depository Trust Corporation
or another established clearing corporation performing similar functions, if
available, provided, that, the Company may, but will not be required to change
its transfer agent if its current transfer agent cannot deliver Warrant Shares
electronically through the Depository Trust Corporation. A "Date of Exercise"
means the date on which the Holder shall have delivered to the Company: (i) the
Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
completed and duly signed and (ii) if such Holder is not utilizing the cashless
exercise provisions set forth in this Warrant, payment of the Exercise Price for
the number of Warrant Shares so indicated by the Holder to be purchased.

                  (b)      If by the third Trading Day after a Date of Exercise
the Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), then the Holder will have the right to
rescind such exercise.

                  (c)      If by the third Trading Day after a Date of Exercise
the Company fails to deliver the required number of Warrant Shares in the manner
required pursuant to Section 5(a), and if after such third Trading Day and prior
to the receipt of such Warrant Shares, the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the Holder of the Warrant Shares which the Holder anticipated receiving
upon such exercise (a "Buy-In"), then the Company shall (1) pay in cash to the
Holder the amount by which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so purchased
exceeds (y) the amount obtained by multiplying (A) the number of Warrant Shares
that the Company was required to deliver to the Holder in connection with the
exercise at issue by (B) the closing bid price of the Common Stock on the Date
of Exercise and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and

                                       4
<PAGE>

delivery obligations hereunder. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In.

                  (d)      The Company's obligations to issue and deliver
Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit a Holder's right to
pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares upon exercise of the Warrant as
required pursuant to the terms hereof.

         6.       Charges, Taxes and Expenses. Issuance and delivery of Warrant
Shares upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates, all
of which taxes and expenses shall be paid by the Company; provided, however,
that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the registration of any certificates for
Warrant Shares or Warrants in a name other than that of the Holder. The Holder
shall be responsible for all other tax liability that may arise as a result of
holding or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.

         7.       Replacement of Warrant. If this Warrant is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange
and substitution for and upon cancellation hereof, or in lieu of and
substitution for this Warrant, a New Warrant, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity (which shall not include a surety bond), if
requested. Applicants for a New Warrant under such circumstances shall also
comply with such other reasonable regulations and procedures and pay such other
reasonable third-party costs as the Company may prescribe. If a New Warrant is
requested as a result of a mutilation of this Warrant, then the Holder shall
deliver such mutilated Warrant to the Company as a condition precedent to the
Company's obligation to issue the New Warrant.

         8.       Reservation of Warrant Shares. The Company covenants that it
will at all times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the
purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as
herein provided, the number of Warrant Shares which are then issuable and
deliverable upon the exercise of this entire Warrant, free from preemptive
rights or any other contingent purchase rights of Persons other than the Holder
(taking into account the adjustments and restrictions of Section 9). The Company
covenants that all Warrant Shares so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with the
terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.

                                       5
<PAGE>

         9.       Certain Adjustments. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9.

                  (a)      Stock Dividends and Splits. If the Company, at any
time while this Warrant is outstanding, (i) pays a stock dividend on its Common
Stock or otherwise makes a distribution on any class of capital stock that is
payable in shares of Common Stock, (ii) subdivides outstanding shares of Common
Stock into a larger number of shares, or (iii) combines outstanding shares of
Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination.

                  (b)      Fundamental Transactions. If, at any time while this
Warrant is outstanding there is a Fundamental Transaction, then the Holder shall
have the right thereafter to receive, upon exercise of this Warrant, the same
amount and kind of securities, cash or property as it would have been entitled
to receive upon the occurrence of such Fundamental Transaction if it had been,
immediately prior to such Fundamental Transaction, the holder of the number of
Warrant Shares then issuable upon exercise in full of this Warrant (the
"Alternate Consideration"). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration. If holders of Common Stock are given any choice as
to the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction. The terms of any agreement pursuant to which a Fundamental
Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (b) and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

                  (c)      Number of Warrant Shares. Simultaneously with any
adjustment to the Exercise Price pursuant to this Section 9, the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant
Shares shall be the same as the aggregate Exercise Price in effect immediately
prior to such adjustment.

                                       6
<PAGE>

                  (d)      Calculations. All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Company, and
the disposition of any such shares shall be considered an issue or sale of
Common Stock.

                  (e)      Notice of Adjustments. Upon the occurrence of each
adjustment pursuant to this Section 9, the Company at its expense will promptly
compute such adjustment in accordance with the terms of this Warrant and prepare
a certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Warrant Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based. Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company's Transfer Agent.

                  (f)      Notice of Corporate Events. If the Company (i)
declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock of
the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such transaction
(but only to the extent such disclosure would not result in the dissemination of
material, non-public information to the Holder) at least 10 calendar days prior
to the applicable record or effective date on which a Person would need to hold
Common Stock in order to participate in or vote with respect to such
transaction, and the Company will take all steps reasonably necessary in order
to insure that the Holder is given the practical opportunity to exercise this
Warrant prior to such time so as to participate in or vote with respect to such
transaction; provided, however, that the failure to deliver such notice or any
defect therein shall not affect the validity of the corporate action required to
be described in such notice.

         10.      Payment of Exercise Price. The Holder may pay the Exercise
Price in one of the following manners:

                  (a)      Cash Exercise. The Holder may deliver immediately
available funds to an account specified by the Company to the Holder upon the
request of the Holder or otherwise; or

                  (b)      Cashless Exercise. If an Exercise Notice is delivered
at a time when a registration statement permitting the Holder to resell the
Warrant Shares is not then effective or the prospectus forming a part thereof is
not then available to the Holder for the resale of the Warrant Shares, then the
Holder may notify the Company in an Exercise Notice of its election to utilize
cashless exercise, in which event the Company shall issue to the Holder the
number of Warrant Shares determined as follows:

                                    X = Y [(A-B)/A]

                           where:

                                       7
<PAGE>

                                    X = the number of Warrant Shares to be
                                    issued to the Holder.

                                    Y = the number of Warrant Shares with
                                    respect to which this Warrant is being
                                    exercised.

                                    A = the average of the VWAP's for the five
                                    Trading Days immediately prior to (but not
                                    including) the Exercise Date.

                                    B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act and subject to its
terms, it is intended, understood and acknowledged that the Warrant Shares
issued in a cashless exercise transaction shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued.

         11.      Limitations on Exercise.
                  -----------------------

                  (a)      Notwithstanding anything to the contrary contained
herein, the number of Warrant Shares that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Exchange Act, does not exceed 4.99% of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. By written notice to
the Company, an Investor may waive the provisions of this Section 11(a) as to
itself but any such waiver will not be effective until the 61st day after
delivery thereof and such waiver shall have no effect on any other Investor.

                  (b)      Notwithstanding anything to the contrary contained
herein, the number of Warrant Shares that may be acquired by the Holder upon any
exercise of this Warrant (or otherwise in respect hereof) shall be limited to
the extent necessary to insure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership
of Common Stock would be aggregated with the Holder's for purposes of Section
13(d) of the Exchange Act, does not exceed 9.99% of the total number of issued
and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other

                                       8
<PAGE>

consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. This restriction may
not be waived, and notwithstanding anything to the contrary in any Transaction
Document, may not be amended by agreement of the parties.

         12.      No Fractional Shares. No fractional shares of Warrant Shares
will be issued in connection with any exercise of this Warrant. In lieu of any
fractional shares which would, otherwise be issuable, the Company shall pay cash
equal to the product of such fraction multiplied by the closing price of one
Warrant Share as reported by the applicable Trading Market on the date of
exercise.

         13.      Notices. Any and all notices or other communications or
deliveries hereunder (including, without limitation, any Exercise Notice) shall
be in writing and shall be deemed given and effective on the earliest of (i) the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number specified in this Section prior to 6:30 p.m. (New York
City time) on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in this Section on a day that is not a Trading Day or
later than 6:30 p.m. (New York City time) on any Trading Day, (iii) the Trading
Day following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice is
required to be given. The addresses for such communications shall be: (i) if to
the Company, to 1528 Moffett Street, Salinas, California 93905, Attn: President,
or to facsimile no.: (831) 755-0684 (or such other address as the Company shall
indicate in writing in accordance with this Section), or (ii) if to the Holder,
to the address or facsimile number appearing on the Warrant Register or such
other address or facsimile number as the Holder may provide to the Company in
accordance with this Section.

         14.      Warrant Agent. The Company shall serve as warrant agent under
this Warrant. Upon 10 calendar days' notice to the Holder, the Company may
appoint a new warrant agent. Any corporation into which the Company or any new
warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business shall
be a successor warrant agent under this Warrant without any further act. Any
such successor warrant agent shall promptly cause notice of its succession as
warrant agent to be mailed (by first class mail, postage prepaid) to the Holder
at the Holder's last address as shown on the Warrant Register.

         15.      Miscellaneous.

                  (a)      This Warrant shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns.
Subject to the preceding sentence, nothing in this Warrant shall be construed to
give to any Person other than the Company and the Holder any legal or equitable
right, remedy or cause of action under this Warrant. This Warrant may be amended
only in writing signed by the Company and the Holder and their successors and
assigns.

                  (b)      All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be governed by and
construed and enforced in accordance with the internal laws of the State of New

                                       9
<PAGE>

York (except for matters governed by corporate law in the State of Delaware),
without regard to the principles of conflicts of law thereof. Each party agrees
that all legal proceedings concerning the interpretations, enforcement and
defense of this Warrant and the transactions herein contemplated ("Proceedings")
(whether brought against a party hereto or its respective Affiliates, employees
or agents) shall be commenced exclusively in the New York Courts. Each party
hereto hereby irrevocably submits to the exclusive jurisdiction of the New York
Courts for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any New York Court, or that
such Proceeding has been commenced in an improper or inconvenient forum. Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Warrant and
agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
any and all right to trial by jury in any legal proceeding arising out of or
relating to this Warrant or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Warrant,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.

                  (c)      The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.

                  (d)      In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

                  (e)      Prior to exercise of this Warrant, the Holder hereof
shall not, by reason of being a Holder, be entitled to any rights of a
stockholder with respect to the Warrant Shares.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
                             SIGNATURE PAGE FOLLOWS]

                                       10
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its authorized officer as of the date first indicated above.

                                      MONTEREY GOURMET FOODS, INC.

                                      By: ____________________________________
                                          Name:
                                          Title:

                                       11
<PAGE>

                                 EXERCISE NOTICE
                          MONTEREY GOURMET FOODS, INC.
                           WARRANT DATED JUNE __, 2006

The undersigned Holder hereby irrevocably elects to purchase _____________
shares of Common Stock pursuant to the above referenced Warrant. Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.

(1)      The undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the Warrant.

(2)      The Holder intends that payment of the Exercise Price shall be made as
(check one):

                               ____     "Cash Exercise" under Section 10

                               ____     "Cashless Exercise" under Section 10

(3)      If the holder has elected a Cash Exercise, the holder shall pay the sum
of $____________ to the Company in accordance with the terms of the Warrant.

(4)      Pursuant to this Exercise Notice, the Company shall deliver to the
holder _______________ Warrant Shares in accordance with the terms of the
Warrant.

(5)      By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock (determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of this Warrant to which
this notice relates.

Dated:_____________________ ,______       Name of Holder:

                                          (Print)_______________________________

                                          By:___________________________________

                                          Name:_________________________________

                                          Title:________________________________

                                          (Signature must conform in all
                                          respects to name of holder as
                                          specified on the face of the Warrant)

                                       12
<PAGE>

                           Warrant Shares Exercise Log
                           ---------------------------

--------------------------------------------------------------------------------
Date            Number of Warrant      Number of Warrant     Number of Warrant
                Shares Available to    Shares Exercised      Shares Remaining to
                be Exercised                                 be Exercised

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

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

                                       13
<PAGE>

                          MONTEREY GOURMET FOODS, INC.
                     WARRANT ORIGINALLY ISSUED JUNE __, 2006
                                 WARRANT NO. [ ]

                               FORM OF ASSIGNMENT

         [To be completed and signed only upon transfer of Warrant]

         FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ________________________________ the right represented by the
above-captioned Warrant to purchase ____________ shares of Common Stock to which
such Warrant relates and appoints ________________ attorney to transfer said
right on the books of the Company with full power of substitution in the
premises.

Dated:   _______________, ____

                                    _______________________________________
                                    (Signature must conform in all respects to
                                    name of holder as specified on the face of
                                    the Warrant)

                                    _______________________________________
                                    Address of Transferee

                                    _______________________________________

                                    _______________________________________

In the presence of:

__________________________

                                       14

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