Document:

Unassociated Document

    STOCK
      PURCHASE AGREEMENT

    

    THIS
      STOCK PURCHASE AGREEMENT (the “Agreement”)
      is
      made and entered into as of this _10th__
      day of
      November, 2008 (the “Effective
      Date”),
      by
      and between Theodore C. Jacoby, Jr. and EAU Technologies, Inc., a Delaware
      corporation (the “Corporation”).

     

    WITNESETH:

     

    WHEREAS,
      the Corporation desires to sell to Theodore C. Jacoby, Jr.(the “Purchaser”), and
      Purchaser desires to purchase from the Corporation, a total of 100,000 shares
      of
      the Common Stock of the Corporation at a purchase price of $1.00 per share
      upon
      the terms and conditions set forth in this Agreement.

    

    NOW,
      THEREFORE, in consideration of the mutual covenants and agreements herein
      contained, and other good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto agree as
      follows:

    

    1. Purchase
      and Sale of Shares.
      Subject
      to the terms of this Agreement, the Corporation hereby agrees to sell to
      Purchaser, and Purchaser herby agrees to purchase from the Corporation a total
      of 100,000 unregistered shares of the Common Stock of the Corporation (the
      “Purchased
      Shares”)
      at a
      purchase price of $1.00 per share. 

    

    2. Purchase
      Price; Issuance of Shares.
      The
      aggregate cash consideration for the Purchased Shares shall be $100,000 (the
      “Purchase
      Price”),
      which
      shall be paid by Purchaser to the Corporation by wire transfer of immediately
      available funds, on the following date: November 10, 2008. Upon
      receipt by the Corporation of the Purchase Price, the Corporation shall cause
      its transfer agent to issue
      in
      the name of, and deliver to, Purchaser a certificate evidencing the number
      of
      Purchased Shares purchased for the applicable Purchase Price
      payment.

    

    3. Representations
      and Warranties of the Corporation.
      The
      Corporation hereby represents and warrants to Purchaser as follows:

    

    3.1 Authority.
      The
      Corporation has the corporate power and authority to execute and deliver the
      Agreement,
      to sell the Purchased Shares to Purchaser, and
      to
      perform its obligations hereunder, and such execution, delivery and performance
      will not violate any agreement, contract, law, rule, decree or other legal
      restriction by which the Corporation is bound.
      The
      execution of the Agreement and the issuance of the Purchased Shares hereunder
      have been approved by the Board of Directors of the Corporation.

    

    3.2 Shares.
      Upon
      payment of the applicable Purchase Price amount, the Purchased Shares for which
      the Corporation has actually received payment shall be duly authorized, validly
      issued, fully-paid and non-assessable. 

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    4. Representations
      and Warranties of Purchaser.
      Purchaser hereby represents and warrants to the Corporation as
      follows:

    

    4.1 Legal
      Capacity.
      Purchaser has the company power and authority to execute and deliver the
Agreement,
      to purchase the Purchased Shares from the Corporation, and
      to
      perform its obligations hereunder, and such execution, delivery and performance
      will not violate any agreement, contract, law, rule, decree or other legal
      restriction by which Purchaser is bound. The
      execution of the Agreement by Purchaser
      and the
      performance of its obligations hereunder has been approved by all company action
      and no further company action is necessary for Purchaser
      to
      perform its obligations hereunder. Purchaser
      has duly
      executed and delivered this Agreement.

    

    4.2 Information.
      Purchaser has had a reasonable opportunity to conduct due diligence related
      to
      the purchase of the Purchased Shares, including the opportunity to ask questions
      and receive answers from the Corporation, and Purchaser has received all
      information requested by it from the Corporation in connection with the purchase
      of the Purchased Shares. Purchaser has had an opportunity to consult with its
      own legal counsel, tax and financial advisors regarding the purchase of the
      Purchased Shares.

    

    4.3 Investment.
      (a)
      Purchaser is acquiring the Purchased Shares solely for its own account for
      investment purposes and not with a view or interest of participating, directly
      or indirectly, in the resale or distribution of all or any part thereof; (b)
      Purchaser acknowledges that all of the Purchased Shares acquired by it are
      to be
      issued and sold to Purchaser without registration and in reliance upon certain
      exemptions under the Federal Securities Act of l933, as amended, and in reliance
      upon certain exemptions from registration requirements under applicable state
      securities laws; (c) Purchaser will make no transfer or assignment of any of
      the
      Purchased Shares except in compliance with the Securities Act of l933, as
      amended, and any other applicable securities laws; (d) Purchaser consents,
      agrees and acknowledges that the certificate or certificates representing the
      Purchased Shares will be inscribed with the following legend, or another legend
      to the same effect and agrees to the restrictions set forth therein:
“The
      shares represented by this certificate have not been registered under the
      Securities Act of 1933, as amended, or under the securities laws of any other
      jurisdiction, in reliance upon exemptions from the registration requirements
      of
      such laws. The shares represented by this certificate may not be sold or
      otherwise transferred, nor will an assignee or endorsee hereof be recognized
      as
      an owner of the shares by the issuer unless: (i) a registration statement under
      the Securities Act of 1933 and other applicable securities laws with respect
      to
      the shares and the transfer shall then be in effect; or (ii) in the opinion
      of
      counsel satisfactory to the issuer, the shares are transferred in a transaction
      which is exempt from the registration requirements of such laws.”;
      (e)
      Purchaser is aware that no federal or state agency has made any recommendation
      or endorsement of the Purchased Shares or any finding or determination as to
      the
      fairness of the investment in such Purchased Shares; (f) neither the Corporation
      nor any person acting on its behalf has offered the Purchased Shares to it
      by
      means of general or public solicitation or general or public advertising, such
      as by newspaper or magazine advertisements, by broadcast media, or at any
      seminar or meeting whose attendees were solicited by such means; (g) Purchaser
      hereby acknowledges and represents that no commission or other remuneration
      has
      been paid or given directly or indirectly in connection with the offer or sale
      of the Purchased Shares to him; (h) it acknowledges that no public or secondary
      market exists or may ever exist for the Purchased Shares and, accordingly,
      it
      may not be able to readily liquidate its investment in the Purchased Shares;
      and
      (i) it acknowledges that the Purchased Shares are a speculative investment
      and
      represents that it can bear the economic risks of such an investment for an
      indefinite period of time.

     

    
      
        
        

      

      
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    4.4 Indemnification.
      Each
      party hereby agrees to indemnify the other and hold harmless each other and
      all
      of its affiliates, attorneys, accountants, employees, officers, directors,
      shareholders and agents from any liability, claims, costs, damages, losses
      or
      expenses incurred or sustained by them as a result of either party’s
      representations and warranties being untrue or inaccurate, or because of a
      breach of this Agreement by either party.

    

    4.5 Brokers.
      Purchaser has not retained or utilized the services of any broker, finder,
      intermediary, or paid or agreed to pay any fee or commission to any person
      or
      entity for or on account of the transactions contemplated hereby, or had any
      communications with any person or entity thereto which would obligate Purchaser
      or the Corporation to pay any such fees or commissions.

    

    5. Survival
      of Representations and Warranties.
      All
      representations and warranties of the parties contained in this Agreement shall
      survive the execution and delivery of this Agreement.

    

    6. Amendment
      and Modification.
      Subject
      to applicable law, this Agreement may be amended, modified and supplemented
      in
      any and all respects, only by written agreement signed by Purchaser
      and the
      Corporation.

    

    7. Notices.
      All
      notices, consents and other communications hereunder shall be in writing and
      shall be deemed to have been duly given when delivered by hand or by Federal
      Express or a similar overnight courier to the party for whom intended, at the
      address for such party set forth below (or at such other address for a party
      as
      shall be specified by like notice, provided,
      however,
      that
      any notice of change of address shall be effective only upon
      receipt):

    

    if
      to
Purchaser:                        
         Theodore
      C. Jacoby, Jr.

    1716
      Hidden Creek Court

    St.
      Louis, MO  63131

    

    if
      to the
      Corporation:                           
  EAU
      Technologies, Inc.

    1890
      Cobb
      International Blvd., Suite A

    Kennesaw,
      Georgia 30152

    Attention:
      Wade R. Bradley, President and CEO

    

    The
      parties hereto agree that notices or other communications that are sent in
      accordance herewith (i) by personal delivery will be deemed received on the
      day
      sent or on the first business day thereafter if not sent on a business day,
      (ii)
      by overnight delivery, will be deemed received on the first business day
      immediately following the date sent, and (iii) by U.S. mail, will be deemed
      received three (3) business days immediately following the date
      sent.

     

    
      
        
        

      

      
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    8. Counterparts.
      This
      Agreement may be executed in multiple counterparts, all of which shall together
      be considered one and the same agreement.

    

    9. Entire
      Agreement; Third Party Beneficiaries.
      This
      Agreement and any exhibits thereto constitute the entire agreement of the
      parties with respect to the subject matter hereof and supersede and terminate
      all prior agreements and understandings, both written and oral, among the
      parties with respect to the subject matter hereof, and is not intended to confer
      upon any person other than the parties hereto any rights or remedies
      hereunder.

    

    10. Severability.
      If any
      term, provision, covenant or restriction of this Agreement is held by a court
      of
      competent jurisdiction or other authority to be invalid, void, unenforceable
      or
      against its regulatory policy, the remainder of the terms, provisions, covenants
      and restrictions of this Agreement shall remain in full force and effect and
      shall in no way be affected, impaired or invalidated.

    

    11. Governing
      Law.
      This
      Agreement and the rights and obligations of the parties under this Agreement
      shall be governed by, and construed and interpreted in accordance with, the
      law
      of the State of Georgia.

    

    12. Assignment.
      Neither
      this Agreement nor any of the rights, interests or obligations hereunder shall
      be assigned by any of the parties hereto (whether by operation of law or
      otherwise) without the prior written consent of the other parties. Subject
      to
      the preceding sentence, this Agreement will be binding upon, inure to the
      benefit of and be enforceable by the parties and their respective permitted
      successors and assigns.

    

    13. Expenses.
      Except
      as otherwise provided herein, all costs and expenses incurred in connection
      with
      this Agreement and the consummation of the transactions contemplated herein
      shall be paid by the party incurring such costs and expenses, whether or not
      the
      transactions contemplated hereby are consummated.

    

    14. Headings.
      Headings of the articles and sections of this Agreement are for convenience
      of
      the parties only, and shall be given no substantive or interpretative effect
      whatsoever.

    

    15. Waivers.
      Except
      as otherwise provided in this Agreement, any failure of any of the parties
      to
      comply with any obligation, covenant, agreement or condition herein may be
      waived by the party or parties entitled to the benefits thereof only by a
      written instrument signed by the party granting such waiver, but such waiver
      or
      failure to insist upon strict compliance with such obligation, covenant,
      agreement or condition shall not operate as a waiver of, or estoppel with
      respect to, any subsequent or other failure.

    

    [Signatures
      begin on following page.]

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF,
      the
      parties have executed and delivered this Stock Purchase Agreement on the date
      first written above.

    
      	 	 	 
	 	
              CORPORATION:

               

              EAU
                TECHNOLOGIES,
                INC.

            
	 
 	 
 	 
 
	
            	By:  	/s/ Wade
              R.
              Bradley
	 	
              
Wade
              R. Bradley
	 	Chief Executive Officer 

      	 	 	 
	 	PURCHASER:
	 
 	 
 	 
 
	
            	  	/s/ Theodore
              C. Jacoby, Jr. 
	 	
              
Theodore
              C. Jacoby, Jr.
	 	
            

    
      
        
        

      

      
        5EMPLOYMENT
      AGREEMENT

    

    This
      Employment Agreement (“Agreement”)
      is
      entered into by and between NutraCea, a California corporation with principal
      offices at 5090 40th
      North
      Street, Suite 400, Phoenix, Arizona 85018 (“NutraCea”)
      and
      Olga Hernandez Longan, 22012 N. 36th
      Way,
      Phoenix, AZ 85050 (“Employee”)
      effective as of November 6, 2008 (the
      “CFO Effective
      Date”),
      as
      follows:

    

    AGREEMENT

    

    1.    Employment.
      NutraCea wishes to employ Employee and Employee agrees to provide services
      for
      NutraCea on the terms and conditions set forth below. 

    

    2.    Employment;
      Scope of Employment.
      Employee
      shall be employed as Chief Financial Officer of NutraCea, and shall have the
      authority, duties and responsibilities as are assigned or modified by
NutraCea’s
      Chief
      Executive Officer, provided, that such authority,
      duties and responsibilities shall be commensurate and consistent with Employee’s
      position as Chief Financial Officer of NutraCea. 

    

    2.1    Best
      Efforts; Full Working Time. Employee
      agrees to devote her full working time and best efforts to perform her duties
      hereunder. 

    

    2.2    Supervision
      and Direction of Services.
      All of
      Employee’s services hereunder shall be under the supervision and direction of
      the Chief Executive Officer of NutraCea and the Board of Directors of NutraCea.
      

    

    2.3    Rules. Employee
      shall be bound by all the policies, rules and regulations of NutraCea now in
      force and by all such other policies, rules and regulations as may be hereafter
      implemented and shall faithfully observe and abide by the same. In the event
      that there is any conflict between the terms of this Agreement and any of
      NutraCea’s policies, rules and regulations, the terms of this Agreement shall
      govern.

    

    2.4    Exclusive
      Services.
      During
      the Term of this Agreement and any extension of this Agreement, Employee shall
      not, directly or indirectly, whether as a partner, employee, creditor,
      shareholder, independent contractor or otherwise, promote, participate or engage
      in any activity or other business which is competitive with NutraCea’s business
      operations; provided, however, that this provision shall not preclude or
      prohibit Employee from holding or obtaining an indirect and passive beneficial
      ownership, through a mutual fund or similar arrangement, of up to one percent
      of
      any publicly-held company which is competitive with NutraCea as long as she
      does
      not otherwise promote, participate or engage in the business operations of
      such
      company. Employee agrees that Employee shall not enter into an agreement to
      establish, form, contract with or become employed by a competing business of
      NutraCea while Employee is employed by NutraCea. 

    

    2.5    Non-Solicitation.
      To the
      fullest extent permissible under applicable law, Employee agrees that both
      during the term of this Agreement and for a period of two (2) year following
      termination of this Agreement, Employee shall not take any action to induce
      employees or independent contractors of NutraCea to sever their relationship
      with NutraCea and accept an employment or an independent contractor relationship
      with any other business.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
3.    Term
      and Termination; Payments upon Termination.
      

    

    3.1    Term
      and Termination.
      Unless
      earlier terminated as described below, NutraCea hereby employs the Employee
      for
      a period commencing on the CFO Effective Date and ending on November 6, 2011
      (the “Term”).
      The
      twelve (12) month period commencing on the CFO Effective Date and ending on
      the
      day before the one-year anniversary of the CFO Effective Date and each
      succeeding twelve (12) month period during the Term are each referred to herein
      as a “Contract
      Year.”
The
      Term shall be extended automatically for successive one-year terms unless either
      party notifies the other party in writing at least ninety (90) days prior to
      the
      expiration of the then-effective Term of such party’s intention not to renew
      this Agreement. Other
      than with respect to a termination for Good Reason (as defined below) as to
      which the requirements of Section 3.1.2 shall apply, Employee agrees to provide
      written notice of voluntary termination to NutraCea (“Voluntary
      Termination Notice”)
      at
      least ninety (90) days before the effective date of such voluntarily termination
      (“Voluntary
      Termination”)
      and
      shall specify in such notice a fixed date for the Voluntary Termination. In
      addition to any other remedies available to NutraCea, if in connection with
      Employee’s Voluntary Termination Employee does not provide the Voluntary
      Termination Notice to NutraCea in the time and manner set forth above, all
      unvested stock options held by Employee, including the Options (as described
      in
      Section 4.3 below), shall immediately terminate at the time of Employee’s
      termination.

    

    3.1.1    Termination
      for Cause.
      “Cause”
for
      termination of Employee’s employment shall mean the occurrence of any of the
      following: 

    

    (a)    Employee
      has breached a material term hereof, which remains uncured for thirty (30)
      days
      after a written notice of breach (which notice shall describe the particulars
      of
      Employee’s breach in sufficient detail to allow Employee the reasonable
      opportunity to cure the breach, if susceptible of being cured within such thirty
      (30) day period) and written demand for performance are delivered to Employee
      by
      the CEO or Board;

    

    (b)    Employee
      has been grossly negligent or engaged in material willful or gross misconduct
      in
      the performance of her duties;

    

    (c)    Employee
      has committed, as determined by the Board of Directors of NutraCea, or has
      been
      convicted by a court of law of, fraud, moral turpitude, embezzlement, theft,
      or
      dishonesty, or other similar criminal conduct, and such misconduct is committed
      in connection with Employee’s employment with NutraCea;

    

    (d)    Employee
      has been convicted by a court of law of a felony involving fraud, moral
      turpitude, embezzlement, theft, or dishonesty or other similar criminal conduct
      or a felony that does not comprise misconduct covered by Section 3.1.1(c);
      

    

    (e)    Habitual
      misuse of alcohol or drugs; or

    

    
      
         

      

      
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    (f)    Employee’s
      breach of the Proprietary Information Agreement attached hereto as Exhibit
      A,
      and
      described in paragraph 6 herein.

    

    3.1.2    Termination
      for Good Reason.
      

    

    (a)    Employee
      may terminate this Agreement for “Good Reason.” As used herein, “Good
      Reason”
means
      (i) any material breach by NutraCea
      of this
      Agreement; (ii) the assignment of duties to Employee by NutraCea
      that are
      not consistent or commensurate with and her position as Chief Financial Officer
      of NutraCea
      (other than any duties that are consistent and commensurate with a higher
      position, and not including any reduction in Employee’s duties during any
      investigation or proceedings initiated by NutraCea in good faith pursuant to
      Section 3.1.1 with regard to a possible termination of Employee for
      Cause);
      (iii)
      the relocation of Employee’s primary office location to outside of the Phoenix
      metropolitan area without Employee’s prior consent; (iv)
      the
      reduction of Employee’s Base Salary; (v) the failure of NutraCea to obtain at
      least forty-five (45) days in advance of an event described in Section 4.3.1(x)
      or (y) an agreement from a successor or purchaser to assume and perform the
      terms of this Agreement; or (vi)
      NutraCea’s termination of Employee’s status as Chief Financial Officer of
NutraCea.

    

    (b)    In
      order
      to terminate this Agreement for Good Reason, Employee shall provide NutraCea
      with (i) written notice of the Good Reason (which notice shall describe the
      particulars of NutraCea’s breach in sufficient detail to allow NutraCea the
      reasonable opportunity to remedy or eliminate the Good Reason(s) if susceptible
      of being remedied or eliminated); and (ii) shall allow NutraCea thirty (30)
      days
      within which to remedy or eliminate the Good Reason(s). In the event that
      Employee provides such notice and NutraCea fails to remedy or eliminate the
      Good
      Reason(s) within such thirty-day period, Employee shall be entitled to provide
      NutraCea with written notice (of not less that thirty (30) days) that Employee
      is terminating this Agreement as a result of such Good Reason(s). 

    

    3.2    Payments
      upon Termination.
      

     

    3.2.1    For
      Cause or Voluntary Termination.
      Following a termination of this Agreement by NutraCea
      for
      Cause, or a Voluntary Termination by Employee, or any other termination by
      Employee other than for Good Reason or due to her death, Employee shall be
      entitled to receive in cash payment (less
      normal and customary deductions and withholdings) an
      amount
      equal to all accrued but unpaid compensation (including accrued but unused
      vacation leave) as of the date of such termination. By
      way of
      example, if NutraCea were to terminate this Agreement for Cause on June 30,
      2009, Employee would be entitled to receive any compensation she had earned
      through June 30, 2009, but which had not been paid to her as of June 30, 2009.
      

    

    3.2.2    Without
      Cause.
      Following any termination of this Agreement by NutraCea other than for Cause,
      or
      a termination by Employee for Good Reason or due to Employee’s death,
Employee
      (or Employee’s estate) shall be entitled to receive in cash payment an amount
      equal to all previously accrued but unpaid compensation (including accrued
      but
      unused vacation leave) as of the date of such termination, and a lump sum
      payment (less normal and customary deductions and withholdings) equal to the
      amount of Base Salary that Employee would have earned if she had remained
      employed with NutraCea during the remaining portion of the then-current Term
      of
      this Agreement. By way of example, if NutraCea were to terminate this Agreement
      for no Cause on June 30, 2009, Employee would be entitled to receive any
      compensation she had earned through June 30, 2009, but which had not been paid
      to her as of June 30, 2009, and an amount equal to the Base Salary that Employee
      would have earned under this Agreement if she had worked until November 6,
      2011.

    

    
      
         

      

      
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    4.    Compensation;
      Benefits.
      

    

    4.1    Salary.
      Employee
      shall be paid at a rate which, on an annualized basis, equals two hundred thirty
      thousand dollars ($230,000) per year, as adjusted pursuant to this Section
      4.1
(“Base
      Salary”).
      The
      Base Salary shall be
      subject
      to normal payroll withholdings and NutraCea’s standard payroll practices. On the
      first anniversary of the
      CFO
      Effective
      Date and
      each anniversary date thereafter , Employee’s Base
      Salary
      shall be
      increased annually by a minimum of a cost of living factor determined as
      follows: (i) Employee’s Base Salary as of the last day of the prior Contract
      Year shall be multiplied by a fraction equal to (A) the published Consumer
      Price
      Index selected by NutraCea (“CPI”)
      for
      the first day of the new Contract Year (“New
      Year”),
      divided by (B) the CPI for the first day of the Contract Year immediately
      preceding such New Year, and (ii) the resulting product shall be added to
      Employee’s Base Salary, and shall be the Base Salary for the New
      Year.

     

    4.2    Moving
      Expense Reimbursement; Bonus Amounts.
      

    

    4.2.1.    Moving
      Expense
      Reimbursement. NutraCea
      shall pay Employee a
      moving
      expense reimbursement of up to Forty Thousand dollars ($40,000) on the
CFO
      Effective Date,
      but
      only after
      Employee
      has provided to NutraCea evidence of Employee’s commitment to relocate her
      primary residence to Phoenix, Arizona (for example, an executed lease for
      residential space or an executed contract to purchase a residential property).
      Should Employee subsequently fail to relocate her primary residence to Phoenix,
      Arizona within a reasonable time thereafter, then upon written demand from
      NutraCea to Employee, Employee promptly shall return such moving expense
      reimbursement amount to NutraCea. 

    

    4.2.2.    Annual
      Bonus.
      Employee shall be eligible to participate in any NutraCea bonus program that
      is
      applicable to officers of NutraCea as may be adopted and in effect from time
      to
      time (subject to the terms and conditions of any such program). In addition,
      Employee shall be eligible for an annual discretionary bonus of up to
      one-hundred percent (100%) of her Base Salary, as then in effect pursuant to
      Section 4.1 (and pro-rated for any partial year), as determined by the NutraCea
      Compensation Committee or Board of Directors, after first obtaining the
      recommendations of such third party compensation consultants as may be selected
      by NutraCea, and the Chief Executive Officer of NutraCea. 

    

    4.3    Stock
      Options.
      Employee acknowledges that she has received those stock option grants described
      in Section 4 of the Consulting and Employment Agreement previously entered
      into
      by Employee and the Company (“Consulting
      Agreement”),
      comprising the “Initial
      Option”
as
      defined in Section 4.1.1 of the Consulting Agreement and the “Second
      Option”
as
      defined in Section 4.1.2 of the Consulting Agreement (collectively the
“Options”).

     

    
      
         

      

      
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    4.3.1.    Change
      of Control.
      The
      parties agree that upon a Qualifying Change of Control (as defined below):
      (i)
      the Initial Option shall vest and shall be exercisable; and (ii) the Second
      Option shall vest with respect to the time vesting criteria for such Second
      Option, but Consultant’s right to exercise the Second Option shall remain
      subject to satisfaction of the “Performance Vesting Criteria”, as defined in the
      Initial Option agreement, and the Second Option shall be exercisable if the
      Performance Vesting Criteria established by NutraCea’s Board of Directors
      pursuant to the terms of the Second Option have been satisfied. For purposes
      of
      this Section 4.3.1, a “Qualifying Change
      of Control”
shall
      mean (x) the consummation of a merger or consolidation of NutraCea with any
      other corporation or other legal entity which results in the voting securities
      of NutraCea outstanding immediately prior thereto failing to represent (either
      by remaining outstanding or by being converted into voting securities of the
      surviving entity) more than fifty percent (50%) of the total voting power
      represented by the voting securities of NutraCea or such surviving entity
      outstanding immediately after such merger or consolidation, or
      (y) the
      consummation of the sale or disposition by NutraCea of all or substantially
      all
      of its assets, and
      (z) the
      termination without Cause of Employee’s employment and/or of the employment of
      Brad Edson, the Chief Executive Officer of NutraCea, within sixty (60) days
      prior to or ninety (90) days after the occurrence of an event described in
      item
      (x) or (y) above. 

    

    4.4    Car
      Allowance.
      Employer shall provide Employee with an automobile allowance in the amount
      of
      Eight Hundred dollars ($800.00) per month, payable in accordance with
NutraCea’s
      payroll periods. Notwithstanding the foregoing, NutraCea shall not be obligated
      to make any down payments for the purchase of any automobile by or on behalf
      of
      Employee.

    

    4.5    Vacation
      and other Standard Benefits.
      Employee
      shall be entitled to four (4) weeks of paid vacation time per year. Employee
      may
      not accrue vacation time in excess of such four (4) week maximum. Accrual of
      vacation time shall be subject to the terms and conditions of NutraCea’s
      vacation policy. Employee shall be entitled to health benefits in accordance
      with NutraCea’s standard policies. In addition, Employee is entitled to paid
      holidays, sick leave and other benefits in accordance with NutraCea’s standard
      policies. 

    

    4.6    Business
      Expenses.
      Employee shall be reimbursed for reasonable business expenses which she incurs
      in the performance of her duties hereunder, in accordance with NutraCea’s
      standard reimbursement policies. 

    

    5.    Employment
      Information.
      Employee represents and warrants to NutraCea that information provided by
      Employee in connection with Employee’s employment and any supplemental
      information provided to NutraCea is, to the best of Employee’s knowledge and
      information after good faith diligence and investigation, complete, true and
      materially correct. Employee has not omitted any information that is necessary
      to evaluate the information provided by Employee to NutraCea. Employee shall
      promptly notify NutraCea of any change in the accuracy or completeness of all
      such information.

     

    
      
         

      

      
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    6.    Trade
      Secrets.
      Employee acknowledges that NutraCea has gone to great time and expense to
      develop customers and to develop procedures and processes for development of
      products and services and the sales of products and services. Such procedures
      and processes in addition to various other types of proprietary information
      are
      included as part of the “confidential information” described in the “Proprietary
      Information Agreement” attached hereto as Exhibit
      A.
      Employee has previously executed the Proprietary Information Agreement or agrees
      to execute NutraCea’s Proprietary Information Agreement contemporaneously with
      the execution of this Agreement and employment. 

     

    7.    Remedies
      for Breach of Covenant Regarding Confidentiality.
      The
      parties agree that the breach by Employee of any covenants contained in Sections
      2.4, 2.5, and 6 will result in immediate and irreparable injury to NutraCea.
      In
      the event of any breach by Employee of the covenants contained in Sections
      2.4,
      2.5, or 6, NutraCea shall be entitled to seek recourse through all available
      legal and equitable remedies necessary or useful to prevent any likelihood
      of
      immediate or irreparable injury to NutraCea. The parties agree that, in the
      case
      of such a breach or threat of breach by Employee of any of the provisions of
      such Sections, NutraCea may take any appropriate legal action, including without
      limitation an action for injunctive relief, consisting of orders temporarily
      restraining and preliminarily and permanently enjoining such actual or
      threatened breach. 

     

    8.    Miscellaneous.
      

    

    8.1    Choice
      of Law, Jurisdiction, Venue.
      The
      rights and obligations of the parties and the interpretation and performance
      of
      this Agreement shall be governed by the laws of Arizona, excluding its conflict
      of laws rules, except as such laws may be interpreted, enforced, or pre-empted
      by federal law. 

    

    8.2    Entire
      Agreement.
      This
      Agreement, the Proprietary Information Agreement dated November 6, 2008 and
      described in Section 6, and the Option agreements referenced in Section 4.3,
      contain the entire Agreement among the parties hereto with respect to the
      subject matter hereof, and supersede all prior and contemporaneous oral and
      written agreements, understandings and representations among the parties. There
      are no representations, agreements, arrangements, or understandings, whether
      oral or written, between or among the parties relating to the subject matter
      of
      this Agreement that are not fully expressed herein and therein.

    

    8.3    Notices.
      Any
      notice under this Agreement shall be in writing, and any written notice or
      other
      document shall be deemed to have been duly given (i) on the date of personal
      service on the parties, (ii) on the third business day after mailing, if the
      document is mailed by registered or certified mail, (iii) one day after being
      sent by professional or overnight courier or messenger service guaranteeing
      one-day delivery, with receipt confirmed by the courier, or (iv) on the date
      of
      transmission if sent by telegram, telex, telecopy or other means of electronic
      transmission resulting in written copies, with receipt confirmed. Any such
      notice shall be delivered or addressed to the parties at the addresses set
      forth
      above or at the most recent address specified by the addressee through written
      notice under this provision. Failure to conform to the requirement that mailings
      be done by registered or certified mail shall not defeat the effectiveness
      of
      notice actually received by the addressee.

     

    
      
         

      

      
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    8.4    Severability.
      NutraCea and Employee agree that should any provision of this Agreement be
      declared or be determined by any court or other tribunal (including an
      arbitrator) of competent jurisdiction to be illegal, invalid or unenforceable,
      the legality, validity and enforceability of the remaining parts, terms and
      provisions shall not be affected thereby, and said illegal, unenforceable or
      invalid part, term or provision shall be deemed not to be part of this
      Agreement. 

     

    8.5    Intentionally
      Omitted. 

    

    8.6    Amendment.
      The
      provisions of this Agreement may be modified at any time by agreement of the
      parties; provided that such modification shall be ineffective unless in writing
      and signed by the parties hereto.

     

    8.7    No
      Transfer or Assignment; No Third-Party Beneficiaries.
      The
      rights of Employee hereunder have been granted by NutraCea with the
      understanding that this Agreement is personal to, and shall be performed by
      Employee individually. This Agreement is not transferable or assignable by
      Employee in any manner. No person or entity other than NutraCea and Employee
      shall have any rights whatsoever under this Agreement or to recover damages
      on
      account of a breach of this Agreement. No person or entity other than NutraCea
      or Employee shall have any right to enforce any provision of this Agreement.
      No
      heir, successor or assign of Employee, whether voluntarily or by operation
      of
      law, shall have or succeed to any rights of NutraCea or Employee
      hereunder.

     

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

     

    8.9    Resolution
      of Disputes.
      

     

    8.9.1    Resolution
      of Disputes.
      NutraCea and Employee agree that, except as otherwise provided herein, any
      claim
      or controversy arising out of or pertaining to this Agreement or the termination
      of Employee's employment, including but not limited to, claims of wrongful
      treatment or termination allegedly resulting from discrimination, harassment
      or
      retaliation on the basis of race, sex, age, national origin, ancestry, color,
      religion, marital status, status as a veteran of the Vietnam era, physical
      or
      mental disability, medical condition, or any other basis prohibited by law
      ("Dispute"),
      shall
      be resolved through binding arbitration, as provided in this Section 8.9.

    

    8.9.2    Binding
      Arbitration.
      The
      provisions of this Section 8.9 shall not preclude any party from seeking
      injunctive or other provisional or equitable relief in order to preserve the
      status quo of the parties pending resolution of a Dispute, and the filing of
      an
      action seeking injunctive or other provisional relief shall not be construed
      as
      a waiver of that party's arbitration rights. Except as provided herein, the
      arbitration of any Dispute between the parties to this Agreement shall be
      governed by the American Arbitration Association (“AAA”)
      Commercial Arbitration Rules (the “AAA Rules”).

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    8.9.3    Appointment
      of Arbitrator.
      Within
      thirty (30) days of service of a demand for arbitration by a party to this
      Agreement, the parties shall endeavor in good faith to select from the AAA
      list
      of labor and employment arbitrators a single arbitrator, who must be a licensed
      attorney; if the parties fail to do so within such 30-day period, an arbitrator
      shall be selected in accordance with the AAA Rules. 

    

    8.9.4    Initiation
      of Arbitration.
      In the
      case of any Dispute between the parties to this Agreement, either party shall
      have the right to initiate the binding arbitration process provided for in
      this
      paragraph by serving upon the other party a demand for arbitration within the
      statutory time period from the date the Dispute first arose. 

    

    8.9.5    Location
      of Arbitration.
      Any
      arbitration hearing shall be conducted in Phoenix, Arizona.

    

    8.9.6    Applicable
      Law.
      The law
      applicable to the arbitration of any Dispute shall be, as provided in Section
      8.1 and the Federal Arbitrator Act (Title 9, US Code, Section 1 et
      Seq.).

    

    8.9.7    Arbitration
      Procedures.
      In
      addition to any of the procedures or processes available under the AAA Rules,
      the parties shall be entitled to conduct discovery sufficient to adequately
      arbitrate their claims and/or defenses, including access to relevant documents
      and witnesses, as determined by the arbitrator(s). In addition, either party
      may
      choose, at that party’s discretion, to request that the arbitrator(s) resolve
      any dispositive motions prior to the taking of evidence on the merits of the
      Dispute. In the event a party to the arbitration requests that the arbitrator(s)
      resolve a dispositive motion, the arbitrator(s) shall receive and consider
      any
      written or oral arguments regarding the dispositive motion, and shall receive
      and consider any evidence specifically relating thereto, and shall render a
      decision thereon, before hearing any evidence on the merits of the Dispute.
      

    

    8.9.8    Scope
      of Arbitrators' Award or Decision.
      NutraCea and Employee agree that if the arbitrators find any Disputed claim
      to
      be meritorious, the arbitrators shall have the authority to order all forms
      of
      legal and/or equitable relief that would otherwise be available in court and
      that is appropriate to the claim. Any decision or award by the arbitrators
      shall
      be a reasoned opinion in writing citing facts and law and shall be specific
      enough to permit limited judicial review if necessary. 

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    8.9.9    Costs
      of Arbitration; Attorneys’ Fees.
      NutraCea and Employee agree that the arbitrators, in their discretion and
      consistent with applicable law, may award to the prevailing party the costs
      and
      attorneys’ fees incurred by that party in participating in the arbitration
      process as long as they do not exceed those that would be incurred by Employee
      in a court action.

    

    8.9.10   Acknowledgment
      of Consent to Arbitration.
      NOTICE:
      BY EXECUTING THIS AGREEMENT THE PARTIES AGREE TO HAVE ANY DISPUTE ARISING OUT
      OF
      THE MATTERS INCLUDED IN THE "RESOLUTION OF DISPUTES" PROVISION DECIDED BY
      NEUTRAL ARBITRATION AS PROVIDED HEREIN AND WAIVE ANY RIGHTS THEY MAY HAVE TO
      HAVE THE DISPUTE DECIDED BY A JUDGE OR A JURY. BY EXECUTING THIS AGREEMENT,
      THE
      PARTIES WAIVE THEIR JUDICIAL RIGHTS TO APPEAL. IF EITHER PARTY REFUSES TO SUBMIT
      TO ARBITRATION AFTER AGREEING TO THIS PROVISION, SUCH PARTY MAY BE COMPELLED
      TO
      ARBITRATE. THE PARTIES’ AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
      THE PARTIES REPRESENT THAT THEY HAVE READ AND UNDERSTAND THE FOREGOING AND
      AGREE
      TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THIS PROVISION TO
      NEUTRAL ARBITRATION.

    

    8.10    Exhibits.
      All
      exhibits to which reference is made are deemed incorporated in this Agreement
      whether or not actually attached.

     

    
      	 	 	 
	 	NUTRACEA
	 
 	 
 	 
 
	 	       
              	/s/ Bradley
              D. Edson
	 	
              
By:   
Bradley
              D. Edson
	 	Title:
              CEO
	 	 
	 	 
	 	Employee: 
	 	 
	 	/s/ Olga Hernandez Longan
	 	
              
Olga
              Hernandez Longan

    

     

     

     

    [SIGNATURE
      PAGE TO EMPLOYMENT
      AGREEMENT]

     

    
      
         

      

      
        9

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