NUTRACEA (Form: 8-K, Received: 05/08/2009 16:09:53)

CERTIFICATE OF DETERMINATION, PREFERENCES AND RIGHTS OF THE

SERIES E CONVERTIBLE PREFERRED STOCK OF

NUTRACEA

We, David Bensol and Olga Hernandez-Longan, hereby certify that we are the Chairman of the Board of Directors and Chief Financial Officer, respectively, of NutraCea (the “ Company ”), a corporation organized and existing under the Corporations Code of the State of California (the “ Corporations Code ”), and further do hereby certify:

That pursuant to the authority conferred upon the Board of Directors of the Company (the “ Board ”) by the Company’s Articles of Incorporation, as amended (the “ Articles of Incorporation ”), the Board on April 29, 2009, adopted the following resolutions creating a series of Two Thousand Seven Hundred Forty Three (2,743) shares of Preferred Stock designated as Series E Convertible Preferred Stock, none of which shares have been issued:

RESOLVED, that the Board of Directors of the Company designates the Series E Convertible Preferred Stock and the number of shares constituting such series, and fixes the rights, preferences, privileges and restrictions relating to such series in addition to any set forth in the Articles of Incorporation as follows:

TERMS OF SERIES E CONVERTIBLE PREFERRED STOCK

1. Designation and Number of Shares . There shall hereby be created and established a series of preferred stock of the Company designated as “Series E Convertible Preferred Stock” (the “ Series E Preferred Stock ”). The authorized number of shares of Series E Preferred stock shall be Two Thousand Seven Hundred Forty Three (2,743) shares.

2. Dividends . Each holder of a share of Series E Preferred Stock (each, a “ Holder ” and collectively, the “ Holders ”) shall be entitled to receive dividends (“ Dividends ”) payable on the Stated Value (as defined below) of each share of Series E Preferred Stock held by such Holder at the Dividend Rate (as defined below) in the manner provided below in this Section 2. Dividends on each share of Series E Preferred Stock shall accrue daily at the Dividend Rate, commence accruing on the Initial Issuance Date (as defined below), be computed on the basis of a 360-day year consisting of twelve 30-day months and be payable (in the manner provided below in this Section 2) in arrears for each Calendar Quarter (as defined below) on the first day following the end of each Calendar Quarter during the period beginning on the Initial Issuance Date and ending on, and including, the Final Redemption Date (each, a “ Dividend Date ”), with the first Dividend Date being July 1, 2009. If a Dividend Date is not a Business Day (as defined below), then the applicable Dividends shall be due and payable on the first (1 st ) Business Day immediately following such Dividend Date. Dividends shall be payable in shares of Common Stock (as defined below) (“ Dividend Shares ”) or, at the option of the Company, in cash; provided, however, that unless the Equity Conditions (as defined below) are and remain satisfied (or are waived by the applicable Holder) during the entire period commencing twenty (20) Trading Days prior to the applicable Dividend Date through the later of such Dividend Date or the date on which the applicable Dividends are paid, the applicable Dividends shall be payable only in cash; and provided further that, except to the extent Dividends are required to be paid in cash pursuant to the foregoing proviso, Dividends shall be paid in cash only if the Company has elected to pay in cash in the applicable Dividend Notice (as defined below). The Company shall provide a written notice (the “ Dividend Notice ”) to each Holder of shares of Series E Preferred Stock at least twenty (20) Trading Days prior to each applicable Dividend Date (the “ Dividend Notice Date ”) indicating either that the entire Dividends are to be paid in cash or confirming that the entire Dividends shall be paid in Dividend Shares (any election by the Company to pay in cash shall apply to all Holders of the then outstanding shares of Series E Preferred Stock); provided, that if the applicable Dividend Notice indicates payment in Dividend Shares, such Dividend Notice shall contain a certification that the Equity Conditions are satisfied as of the applicable Dividend Notice Date (unless waived by the applicable Holder). If the Equity Conditions were satisfied as of the applicable Dividend Notice Date but the Equity Conditions are no longer satisfied at any time prior to or on the Dividend Date, the Company shall provide each Holder a subsequent notice to that effect indicating that unless such Holder waives the Equity Conditions, the applicable Dividends shall be paid in cash to such Holder, and if such waiver is not received from such Holder by the applicable Dividend Date then the applicable Dividends shall be paid in cash to such Holder. The Company shall be required to provide a Dividend Notice electing to pay Dividends in cash if any of the Equity Conditions are not satisfied as of the applicable Dividend Notice Date, and the applicable Dividends shall be paid in cash to a Holder if a waiver of the Equity Conditions is not received from such Holder by the applicable Dividend Date. The amount payable on a Dividend Date in respect of Dividends on each share of Series E Preferred Stock shall equal the Additional Amount (as defined below) thereon. Dividends paid in Dividend Shares shall be paid in a number of freely tradable, fully paid and non-assessable shares of Common Stock equal to the quotient of (i) the Additional Amount divided by (ii) the Stock Dividend Rate (as defined below), provided that no fractional shares of Common Stock shall be issued pursuant to the foregoing quotient and the portion of such Additional Amount that would result in the issuance of fractional shares of Common Stock shall instead be payable by the Company in cash on the applicable Dividend Date. If any Dividend Shares are to be issued on a Dividend Date, then the Company shall (X) provided the Company’s designated transfer agent (the “ Transfer Agent ”) is participating in The Depository Trust Company (“ DTC ”) Fast Automated Securities Transfer Program, upon the request of a Holder made before the applicable Dividend Date, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, within three (3) Trading Days of the applicable Dividend Date, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to such Holder, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled within two (2) Trading Days of the applicable Dividend Date. Notwithstanding anything contained in this Certificate of Determination to the contrary, no certificate representing Dividend Shares or shares of Common Stock issued upon conversion of a share of Series E Preferred Stock shall bear any restrictive or other legend (other than the legend expressly required by Section 3(d)(vii)).

3. Conversion . Each share of Series E Preferred Stock shall be convertible into shares of Common Stock (as defined below) on the terms and conditions set forth in this Section 3.

(a) Certain Defined Terms . For purposes of this Certificate of Determination, the following terms shall have the following meanings:

(i) “ 1934 Act ” means the Securities Exchange Act of 1934, as amended.

(ii) “ Additional Amount ” means, as of a particular date of determination, with respect to each share of Series E Preferred Stock, the product of (x) the result of the following formula: (1) the Dividend Rate multiplied by (2) the quotient of N divided by 360; multiplied by (y) the Stated Value.

(iii) “ Aggregate Redemption Amount ” means (i) with respect to each Redemption Date (other than the Final Redemption Date), $914,000 and (ii) with respect to the Redemption Date that is the Final Redemption Date, the aggregate Stated Value of all shares of Series E Preferred Stock issued and outstanding as of the Final Redemption Date.

(iv) “ Automatic Conversion Price ” means, as of a particular date of determination, the lower of (i) the then applicable Conversion Price and (ii) the price which shall be computed as 90% of the arithmetic average of the VWAP of the Common Stock on each of the twenty (20) (or, solely with respect to the Redemption Date that is June 1, 2009, sixteen (16)) consecutive Trading Days immediately preceding the applicable Redemption Date (each such period, an “ Automatic Conversion Measuring Period ”). All such determinations to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such Automatic Conversion Measuring Period.

(v) “ Bloomberg ” means Bloomberg, L.P.

(vi) “ Business Day ” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed.

(vii) “ Calendar Quarter ” means each of the following periods: (1) the period beginning on and including January 1 and ending on and including March 31; (2) the period beginning on and including April 1 and ending on and including June 30; (3) the period beginning on and including July 1 and ending on and including September 30; and (4) the period beginning on and including October 1 and ending on and including December 31.

(viii) “ Closing Bid Price ” and “ Closing Sale Price ” means, for any security as of any date, the last closing bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Required Holders. If the Company and the Required Holders are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 3(d)(iii). The resolution of such dispute shall be binding on all Holders. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.

(ix) “ Common Stock ” means (i) the Company’s shares of common stock, no par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

(x) “ Conversion Amount ” means, with respect to each share of Series E Preferred Stock, as of a particular date of determination, the sum of (1) the Stated Value thereof plus (2) the Additional Amount thereon.

(xi) “ Conversion Price ” means, with respect to each share of Series E Preferred Stock, as of any Conversion Date or other particular date of determination, $0.30, subject to adjustment as provided herein.

(xii) “Conversion Share Ratio ” means, as to any applicable Redemption Date, the quotient of (i) the number of Pre-Redemption Conversion Shares delivered in connection with such Redemption Date divided by (ii) the number of Post-Redemption Conversion Shares applicable to such Redemption Date.

(xiii) “ Convertible Securities ” means any stock or securities (other than Options) directly or indirectly convertible into or exercisable or exchangeable for shares of Common Stock.

(xiv) “ Dividend Rate ” means (i) seven percent (7%) per annum and (ii) for the period from and after the occurrence of a Triggering Event through such time that such Triggering Event is cured, sixteen percent (16%) per annum.

(xv) “ Dollar Failure ” means, with respect to a particular date of determination, that the aggregate dollar trading volume (as reported on Bloomberg) of the Common Stock on the Eligible Market on which the Common Stock is listed as of such date of determination over the twenty (20) consecutive Trading Day period ending on the Trading Day immediately preceding such date of determination is less than $500,000.

(xvi) “ Eligible Market ” means The New York Stock Exchange, Inc., the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the American Stock Exchange, the OTC Bulletin Board or the Principal Market.

(xvii) “ Equity Conditions ” means: (i) on each day during the period beginning one month prior to the applicable date of determination and ending on and including the applicable date of determination, all the Securities are freely tradable without restriction by the Holders; (ii) on each day during the period beginning one month prior to the applicable date of determination and ending on and including the applicable date of determination (the “ Equity Conditions Measuring Period ”), the shares of Common Stock are listed or designated for quotation on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two (2) days and occurring prior to the applicable date of determination due to business announcements by the Company or suspensions made on the same day that the Common Stock is listed or designated for quotation on a different Eligible Market) nor shall delisting or suspension by an Eligible Market have been threatened or pending (with a reasonable prospect of delisting occurring without the Common Stock being listed or designated for quotation on a different Eligible Market on the same day that such delisting occurs) either (A) in writing by such Eligible Market or (B) by falling below the minimum listing maintenance requirements of the Eligible Market on which the shares of Common Stock are then listed; (iii) on each day during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable upon conversion of the shares of Series E Preferred Stock on a timely basis as set forth in Section 3(d)(v) hereof and all other shares of capital stock required to be delivered by the Company on a timely basis as set forth in the other Transaction Documents (including, without limitation, under the Warrants); (iv) any shares of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating Section 7 hereof; (v) any shares of Common Stock to be issued in connection with the event requiring determination may be issued in full without violating the rules or regulations of the Eligible Market on which the shares of Common Stock are then listed; (vi) on each day during the Equity Conditions Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not been abandoned, terminated or consummated; (vii) the Company shall have no knowledge of any fact that would reasonably be expected to cause any of the Securities to not be freely tradable without restriction by the Holders; (viii) no Holder shall be in possession of any material, non-public information provided to any of them by the Company or any of its affiliates or representatives; (ix) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with and shall not have breached in any material respect any provision, covenant, representation or warranty of any of the Exchange Agreements or any other Transaction Document; (x) on each day during the Equity Conditions Measuring Period, the Company otherwise shall have been in compliance with and shall not have breached in any material respect any covenant of the Securities Purchase Agreement; and (xi) on each day during the Equity Conditions Measuring Period, there shall not have occurred a Triggering Event or an event that with the passage of time or giving of notice would constitute a Triggering Event.

(xviii) “ Equity Conditions Failure ” means that on any day during the period commencing twenty (20) Trading Days prior to the applicable Company Redemption Notice Date through the later of the applicable Redemption Date and the date on which the applicable shares of Common Stock are actually delivered to the applicable Holder, any of the Equity Conditions have not been satisfied (or waived in writing by such Holder).

(xix) “ Equity Value Redemption Premium ” means 135%.

(xx) “ Exchange Agreements ” means, collectively, the separate exchange agreements, each dated as of the Subscription Date, entered into between the Company and each of the holders of Series D Convertible Preferred Stock of the Company (each individually being an “ Exchange Agreement ”).

(xxi) “ Excluded Securities ” means, collectively, (A) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers, employees or consultants of the Company in connection with their service as directors or officers of the Company, their employment by the Company or their retention as consultants by the Company pursuant to an equity compensation program or other contract or arrangement approved by the Board (or the compensation committee of the Board) for consideration per share or having an exercise price (as the case may be) (as determined pursuant to the provisions of Section 3(f)(i) hereof) less than the Conversion Price in effect on the date of issuance, provided that all such issuances of shares of Common Stock (including, shares issuable upon exercise of such standard options) after the Subscription Date pursuant to this clause (A) that are not described in clause (B) below do not, in the aggregate, exceed more than 2.5% of the Common Stock issued and outstanding immediately prior to October 16, 2008 (as adjusted for any stock dividend, stock split, stock combination or other similar transaction occurring after the date thereof) (excluding, for purposes of the foregoing 2.5% calculation, shares of Common Stock issuable upon exercise of such standard options issued after the Subscription Date that have been terminated or forfeited), provided further that all such issuances must be for consideration per share or have an exercise price (as the case may be) (as determined pursuant to the provisions of Section 3(f)(i) hereof) greater than or equal to the Closing Sale Price of the Common Stock on the date of such issuance; (B) shares of Common Stock issued upon the conversion or exercise of Convertible Securities or Options issued prior to the Subscription Date, provided that such Convertible Securities or Options have not been amended since the Subscription Date to increase the number of shares issuable thereunder or to lower the exercise or conversion price thereof or otherwise materially change the terms or conditions thereof in any manner that adversely affects any of the Holders; (C) shares of Common Stock issuable upon conversion of the shares of Series E Preferred Stock; (D) the Warrant Shares; (E) the Dividend Shares; (F) up to (i) 545,455 shares of Common Stock issuable pursuant to warrants issued to the Placement Agent in connection with the transactions contemplated by the Securities Purchase Agreement and (ii) 545,455 shares of Common Stock issuable pursuant to warrants issued to the Placement Agent (in each case, as adjusted for any stock dividend, stock split, stock combination or other similar transaction occurring after the date thereof); (G) shares of Common Stock issued by the Company solely as a penalty pursuant to the Prior Registration Rights Agreements; and (H) shares of Common Stock issued in connection with strategic transactions or acquisitions (the primary purpose of which is not to raise capital, and which are approved in good faith by the Board) having a price per share (as determined pursuant to the provisions of Section 3(f)(i) hereof) less than the Conversion Price in effect on the date of issuance, provided that (i) any such issuance pursuant to this clause (H) shall only be to a Person that is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company; (ii) all such issuances after the Subscription Date pursuant to this clause (H) do not, in the aggregate, exceed more than 10% of the shares of Common Stock issued and outstanding immediately prior to October 16, 2008 (as adjusted for any stock dividend, stock split, stock combination or other similar transaction occurring after October 16, 2008) and (iii) all such issuances pursuant to this clause (H) must have a price per share (as determined pursuant to the provisions of Section 3(f)(i) hereof) greater than or equal to the Closing Sale Price of the Common Stock on the date of such issuance.

(xxii) “ Final Redemption Date ” means, with respect to each share of Series E Preferred Stock, August 1, 2009.

(xxiii) “ Fundamental Transaction ” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company is the surviving corporation) another Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company or any material Subsidiary to another Person, or (3) allow another Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize, recapitalize or reclassify its Common Stock (for clarification purposes, excluding customary stock splits and stock dividends occurring after the Subscription Date), or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock.

(xxiv) “ Fundamental Transaction Redemption Premium ” means 135%.

(xxv) “ Initial Issuance Date ” means May 7, 2009.

(xxvi) “ Liquidation Event ” means, in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution or winding up of the Company or such Subsidiaries, the assets of which constitute all or substantially all of the assets or business of the Company and its Subsidiaries taken as a whole.

(xxvii) “ N ” means the number of days from and including the last Dividend Date with respect to which Dividends have been paid by the Company on shares of Series E Preferred Stock, or the Initial Issuance Date if no Dividend Date has occurred, through and including the day immediately before the Conversion Date or other date of determination for each share of Series E Preferred Stock (as the case may be) for which such determination is being made.

(xxviii) “ Options ” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

(xxix) “ Parent Entity ” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

(xxx) “ Person ” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity, a government or any department or agency thereof.

(xxxi) “ Placement Agent ” means Rodman & Renshaw LLC.

(xxxii) “ Pro Rata Amount ” means, as of the applicable date of determination, with respect to a particular Holder, a fraction (i) the numerator of which is the aggregate number of shares of Series E Preferred Stock held by such Holder as of such date and (ii) the denominator of which is the aggregate number of shares of Series E Preferred Stock outstanding as of such date.

(xxxiii) “ Post-Redemption Conversion Shares ” means that number of shares of Common Stock that would be required to be delivered pursuant to Section 5 on the applicable Redemption Date without taking into account the delivery of any Pre-Redemption Conversion Shares.

(xxxiv) “ Pre-Redemption Conversion Price ” means the lower of (i) the then applicable Conversion Price and (ii) the price which shall be computed as 90% of the arithmetic average of the VWAP of the Common Stock on each of the twenty (20) consecutive Trading Days immediately preceding the delivery or deemed delivery of the applicable Company Redemption Notice. All such determinations to be appropriately adjusted for any stock split, stock dividend, stock combination or other similar transaction during such twenty (20) Trading Day period.

(xxxv) “ Principal Market ” means the “pink sheets” over-the-counter market.

(xxxvi) “ Prior Registration Rights Agreements ” means, collectively, (i) that certain Registration Rights Agreement that was entered into by the Company and certain investors in connection with the Company’s issuance of its Series B Convertible Preferred Stock on October 4, 2005, (ii) that certain Registration Rights Agreement that was entered into by the Company and certain investors in connection with the Company’s issuance of its Series C Convertible Preferred Stock on May 12, 2006 and (iii) that certain Registration Rights Agreement that was entered into by the Company and certain investors in connection with the Company’s issuance of Common Stock on February 15, 2007.

(xxxvii) “ Redemption Amount ” means, as of the applicable date of determination, with respect to a particular Holder, an amount equal to (i) the product of (1) the Aggregate Redemption Amount multiplied by (2) such Holder’s Pro Rata Amount or (ii) the aggregate Stated Value of all shares of Series E Preferred Stock then held by such Holder only if such aggregate Stated Value is less than the amount determined under the immediately preceding clause (i).

(xxxviii) “ Redemption Date ” means each of the following dates: (i) June 1, 2009, (ii) July 1, 2009, and (iii) the Final Redemption Date.

(xxxix) “ Required Holders ” means, as of a particular date of determination, the Holders of all of the shares of Series E Preferred Stock outstanding as of such date.

(xl) “ SEC ” means the Securities and Exchange Commission.

(xli) “ Securities ” means, collectively, the shares of Series E Preferred Stock, the shares of Common Stock issuable upon conversion of the shares of Series E Preferred Stock, the Warrants, the Warrant Shares and the Dividend Shares.

(xlii) “ Securities Purchase Agreement ” means that certain securities purchase agreement by and among the Company and the initial holders of Series D Convertible Preferred Stock of the Company, dated as of October 16, 2008, as such agreement may be amended from time to time as provided in such agreement.

(xliii) “ Series A Warrants ” means, collectively, all of the Series A Warrants to purchase Common Stock issued by the Company pursuant to the terms of the Securities Purchase Agreement.

(xliv) “ Stated Value ” means $1,000 (adjusted for any stock dividend, stock split or other similar transaction occurring after the Subscription Date with respect to the shares of Series E Preferred Stock).

(xlv) “ Stock Dividend Rate ” means, with respect to each applicable Dividend Date, the price which shall be computed as 90% of the arithmetic average of the VWAP of the Common Stock on each of the twenty (20) consecutive Trading Days immediately preceding (but not including) such Dividend Date. All such determinations shall be appropriately adjusted for any stock dividend, stock split or other similar transaction during such period.

(xlvi) “ Subscription Date ” means May 7, 2009.

(xlvii) “ Subsidiaries ” means, collectively, Persons in which the Company, directly or indirectly, owns any capital stock or holds any equity or similar interest (and individually, each a “ Subsidiary ”).

(xlviii) “ Successor Entity ” means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction shall have been entered into.

(xlix) “ Trading Day ” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded; provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time).

(l) “ Transaction Documents ” means the Exchange Agreements, this Certificate of Determination and the Warrants.

(li) “ Triggering Event Redemption Premium ” means 135%.

(lii) “ Warrants ” means, collectively, the warrants to purchase Common Stock issued by the Company pursuant to the Exchange Agreements in exchange for the Series A Warrants.

(liii) “ Warrant Shares ” means, collectively, the shares of Common Stock issuable upon exercise of the Warrants.

(liv) “ Volume Failure ” means, with respect to a particular date of determination, the average daily volume of the Common Stock on the Eligible Market on which the Common Stock is listed (as reported on Bloomberg) as of such date of determination over the twenty (20) consecutive Trading Day period ending on the Trading Day immediately preceding such date of determination is less than 350,000 shares (adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period)

(lv) “ VWAP ” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.). If VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the applicable Holder. If the Company and such Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 3(d)(iii). All such determinations shall be appropriately adjusted for any stock dividend, stock split or other similar transaction during such period.

(b) Holder’s Conversion Right . Subject to the provisions of Section 7 and, if applicable, the proviso in the last sentence of Section 5(c), at any time or times on or after the Initial Issuance Date, each Holder shall be entitled to convert any whole number of shares of Series E Preferred Stock into fully paid and nonassessable shares of Common Stock in accordance with Section 3(d) at the Conversion Rate (as defined below).

(c) Conversion Rate . The number of shares of Common Stock issuable upon conversion of each share of Series E Preferred Stock pursuant to Section 3(b) shall be determined according to the following formula (the “ Conversion Rate ”):

Conversion Amount

Conversion Price

No fractional shares of Common Stock are to be issued upon the conversion of any share Series E Preferred Stock, and in lieu thereof, the Company shall pay cash to the Holder on the applicable Share Delivery Date (as defined below) equal to the product of such fractional share multiplied by the Closing Sale Price of the Common Stock for the Trading Day immediately preceding the applicable Conversion Date (as defined below).

(d) Mechanics of Conversion . The conversion of each share of Series E Preferred Stock shall be conducted in the following manner:

(i) Holder’s Delivery Requirements . To convert a share of Series E Preferred Stock into shares of Common Stock on any date (a “ Conversion Date ”), a Holder shall (A) transmit or otherwise deliver (whether via facsimile or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of a fully completed notice of conversion executed by the registered Holder of the share(s) of Series E Preferred Stock subject to such conversion in the form attached hereto as Exhibit I (the “ Conversion Notice ”) to the Company and (B) if required by Section 3(d)(vii), surrender to a common carrier for delivery to the Company as soon as practicable following such date the original certificates representing the share(s) of Series E Preferred Stock being converted (or comply with the procedures set forth in Section 15) (the “ Preferred Share Certificates ”).

(ii) Company’s Response . Upon receipt by the Company of a copy of a fully completed Conversion Notice, the Company shall as soon as practicable, but in any event within two (2) Trading Days, send, via facsimile, a confirmation of receipt of such Conversion Notice to such Holder and the Transfer Agent, which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the third (3 rd ) Trading Day following the date of receipt by the Company of such fully completed Conversion Notice (the “ Share Delivery Date ”), the Company shall (1) provided the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s or its designee’s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder shall be entitled. If the number of shares of Series E Preferred Stock represented by the Preferred Share Certificate(s) submitted for conversion, as may be required pursuant to Section 3(d)(vii), is greater than the number of shares of Series E Preferred Stock being converted, then the Company shall, as soon as practicable and in no event later than three (3) Trading Days after receipt of the Preferred Share Certificate(s) (the “ Preferred Share Delivery Date ”) and at its own expense, issue and deliver to such Holder a new Preferred Share Certificate representing the number of shares of Series E Preferred Stock not converted.

(iii) Dispute Resolution . In the case of a dispute as to the determination of the Closing Sale Price, the Closing Bid Price or fair market value or the arithmetic calculation of the Conversion Rate (as the case may be), the Company shall instruct the Transfer Agent to issue to such Holder the number of shares of Common Stock that is not disputed and shall transmit an explanation of the disputed determinations or arithmetic calculations (as the case may be) to such Holder via facsimile within two (2) Business Days of receipt of such Holder’s Conversion Notice or other date of determination. If such Holder and the Company are unable to agree upon the determination of the Closing Sale Price, the Closing Bid Price or fair market value (as the case may be) or arithmetic calculation of the Conversion Rate (as the case may be) within two (2) Business Days of such disputed determination or arithmetic calculation (as the case may be) being transmitted to such Holder, then the Company shall within one (1) Business Day submit via facsimile (A) the disputed determination of the Closing Sale Price, Closing Bid Price or fair market value (as the case may be) to an independent, reputable investment bank selected by the Company and approved by the such Holder or (B) the disputed arithmetic calculation of the Conversion Rate to the Company’s independent, outside accountant. The Company shall cause, at the Company’s expense, the investment bank or the accountant (as the case may be) to perform the determinations or calculations and notify the Company and such Holder of the results no later than four (4) Business Days from the time it receives the disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall be binding upon all parties absent manifest error (provided such determination is approved by the Required Holders).

(iv) Record Holder . The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of shares of Series E Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.

(v) Company’s Failure to Timely Convert .

(A) Damages . If (I) within three (3) Trading Days after the Company’s receipt of a fully completed Conversion Notice (whether via facsimile or otherwise) the Company shall fail to credit the applicable Holder’s balance account with DTC or issue and deliver a certificate to such Holder for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion of shares of Series E Preferred Stock (as the case may be) (a “ Conversion Failure ”) or (II) within three (3) Trading Days of the Company’s receipt of a Preferred Share Certificate the Company shall fail to issue and deliver a new Preferred Share Certificate representing the number of shares of Series E Preferred Stock to which such Holder is entitled pursuant to Section 3(d)(ii), then in addition to all other available remedies which such holder may pursue hereunder and under the Securities Purchase Agreement and/or such Holder’s Exchange Agreement (including indemnification pursuant to Section 9(k) thereof), the Company shall pay additional damages to such Holder for each day after the Share Delivery Date that such conversion is not timely effected and/or each day after the Preferred Share Delivery Date that each Preferred Share Certificate is not delivered (as the case may be) in an amount equal to 2% of the product of (I) the sum of the number of shares of Common Stock not issued to such Holder on or prior to the Share Delivery Date and to which such Holder is entitled as set forth in the applicable Conversion Notice and, in the event the Company has failed to deliver a Preferred Share Certificate to such Holder on or prior to the Preferred Share Delivery Date, the number of shares of Common Stock issuable upon conversion of the shares of Series E Preferred Stock represented by the Preferred Share Certificate as of the Preferred Share Delivery Date and (II) the Closing Sale Price of the Common Stock on the Share Delivery Date, in the case of the failure to deliver shares of Common Stock, or the Preferred Share Delivery Date, in the case of failure to deliver a Preferred Share Certificate (as the case may be). In addition to the foregoing, if within three (3) Trading Days after the Company’s receipt of a fully completed Conversion Notice (whether via facsimile or otherwise) the Company shall fail to issue and deliver a certificate to a Holder or credit such Holder’s balance account with DTC (as the case may be) for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s conversion of shares of Series E Preferred Stock, and if on or after such Business Day such Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of the shares of Common Stock issuable upon such conversion that such Holder anticipated receiving from the Company (a “ Buy-In ”), then the Company shall, in addition to all other rights and remedies available to such Holder, within three (3) Business Days after such Holder’s request and in such Holder’s discretion, either (i) pay cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased (the “ Buy-In Price ”), at which point the Company’s obligation to deliver such certificate or credit such Holder’s balance account with DTC (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to such Holder a certificate or certificates representing such shares of Common Stock or credit such Holder’s balance account with DTC (as the case may be) and pay cash to such Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Sale Price of the Common Stock on the Conversion Date.

(B) Void Conversion Notice; Adjustment of Conversion Price . If for any reason a Holder has not received all of the shares of Common Stock to which such Holder is entitled prior to the fifth (5 th ) Trading Day after the Share Delivery Date with respect to a conversion of shares of Series E Preferred Stock, then such Holder, upon written notice to the Company, with a copy to the Transfer Agent, may void its Conversion Notice with respect to, and retain or have returned (as the case may be) any shares of Series E Preferred Stock that have not been converted pursuant to such Holder’s Conversion Notice; provided that the voiding of a Holder’s Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such notice pursuant to Section 3(d)(v)(A) or otherwise. Thereafter, the Conversion Price of any shares of Series E Preferred Stock returned or retained by such Holder for failure to timely convert shall be adjusted to the lesser of (I) the Conversion Price relating to the voided Conversion Notice and (II) the lowest Closing Bid Price of the Common Stock during the period beginning on the Conversion Date and ending on the date such Holder voided the Conversion Notice, subject to further adjustment as provided in this Certificate of Determination.

(vi) Pro Rata Conversion; Disputes . In the event the Company receives a Conversion Notice from more than one Holder for the same Conversion Date and the Company can convert some, but not all, of such shares of Series E Preferred Stock, the Company shall convert from each Holder electing to have shares of Series E Preferred Stock converted at such time a pro rata amount of such Holder’s shares of Series E Preferred Stock submitted for conversion based on the number of shares of Series E Preferred Stock submitted for conversion on such date by such Holder relative to the number of shares of Series E Preferred Stock submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable to a Holder in connection with a conversion of shares of Series E Preferred Stock, the Company shall issue to such Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 3(d)(iii).

(vii) Book-Entry . Notwithstanding anything to the contrary set forth herein, upon conversion of shares of Series E Preferred Stock in accordance with the terms hereof, any Holder thereof shall not be required to physically surrender the certificate representing the shares of Series E Preferred Stock to the Company unless (A) the full or remaining number of shares of Series E Preferred Stock represented by the certificate are being converted or redeemed or (B) such Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting reissuance of shares of Series E Preferred Stock upon physical surrender of any shares of Series E Preferred Stock. Each Holder and the Company shall maintain records showing the number of shares of Series E Preferred Stock so converted by such Holder and the dates of such conversions or shall use such other method, reasonably satisfactory to such Holder and the Company, so as not to require physical surrender of the certificate representing the shares of Series E Preferred Stock upon each such conversion. In the event of any dispute or discrepancy, such records of the Company establishing the number of shares of Series E Preferred Stock to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if shares of Series E Preferred Stock represented by a certificate are converted as aforesaid, a Holder may not transfer the certificate representing the shares of Series E Preferred Stock unless such Holder first physically surrenders the certificate representing the shares of Series E Preferred Stock to the Company, whereupon the Company will forthwith issue and deliver upon the order of such Holder a new certificate of like tenor, registered as such Holder may request, representing in the aggregate the remaining number of shares of Series E Preferred Stock represented by such certificate. A Holder and any assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of any shares of Series E Preferred Stock, the number of shares of Series E Preferred Stock represented by such certificate may be less than the number of shares of Series E Preferred Stock stated on the face thereof. Each certificate for shares of Series E Preferred Stock shall bear the following legend:

ANY TRANSFEREE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE COMPANY’S CERTIFICATE OF DETERMINATION RELATING TO THE SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 3(d)(vii) THEREOF. THE NUMBER OF SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES E PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 3(d)(vii) OF THE CERTIFICATE OF DETERMINATION RELATING TO THE SHARES OF SERIES E PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.

(e) Taxes . The Company shall pay any and all documentary, stamp, transfer (but only in respect of the registered holder thereof) and other similar taxes that may be payable with respect to the issuance and delivery of shares of Common Stock upon the conversion of shares of Series E Preferred Stock.

(f) Adjustments to Conversion Price . The Conversion Price will be subject to adjustment from time to time as provided in this Section 3(f).

(i) Adjustment of Conversion Price upon Issuance of shares of Common Stock . If and whenever on or after the Subscription Date the Company issues or sells, or in accordance with this Section 3(f) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration per share (the “ New Issuance Price ”) less than a price equal to the Conversion Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Conversion Price then in effect is referred to as the “ Applicable Price ”) (the foregoing a “ Dilutive Issuance ”), then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For purposes of determining the adjusted Conversion Price under this Section 3(f), the following shall be applicable:

(A) Issuance of Options . If the Company in any manner grants or sells any Options and the lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price per share. For purposes of this Section 3(f)(i)(A), the “lowest price per share for which one share of Common Stock is issuable upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option. Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock or of such Convertible Securities upon the exercise of such Options or upon the actual issuance of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities.

(B) Issuance of Convertible Securities . If the Company in any manner issues or sells any Convertible Securities and the lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section 3(f)(i)(B), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security. Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such share of Common Stock upon conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions of this Section 3(f)(i), except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issue or sale.

(C) Change in Option Price or Rate of Conversion . If the purchase or exercise price provided for in any Options, the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes of this Section 3(f)(i)(C), if the terms of any Option or Convertible Security that was outstanding as of the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 3(f)(i) shall be made if such adjustment would result in an increase of the Conversion Price then in effect.

(D) Calculation of Consideration Received . In case any Option is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction in which no specific consideration is allocated to such Options by the parties thereto, the Options will be deemed to have been issued for a consideration of $0.01. If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the amount of consideration received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average of the VWAP of such security for the five (5) Trading Day period immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and the Required Holders. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “ Valuation Event ”), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10 th ) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest error (provided such determination is approved by the Required Holders) and the fees and expenses of such appraiser shall be borne by the Company.

(E) Record Date . If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock, Options or Convertible Securities or (B) to subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).

(ii) Adjustment of Conversion Price upon Subdivision or Combination of shares of Common Stock . If the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section 3(f)(ii) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this Section 3(f)(ii) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.

(iii) Other Events . In the event that the Company (or any direct or indirect Subsidiary thereof) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holders from dilution or if any event occurs of the type contemplated by the provisions of this Section 3(f) but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Board shall in good faith determine and implement an appropriate adjustment in the Conversion Price (subject to the approval of the Required Holders) so as to protect the rights of the Holders; provided that no such adjustment pursuant to this Section 3(f)(iii) will increase the Conversion Price as otherwise determined pursuant to this Section 3(f), provided further that if a Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Board and such Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error (provided such determination is approved by the Required Holders) and whose fees and expenses shall be borne by the Company.

4. Redemption at Option of Holders .

(a) Triggering Event . A “ Triggering Event ” shall be deemed to have occurred at such time as any of the following events:

(i) any of the Securities are not freely tradable without restriction by the Holders;

(ii) the suspension from trading or failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period of five (5) consecutive days or for more than an aggregate of ten (10) days in any 365-day period;

(iii) the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or (B) notice, written or oral, to any Holder of shares of Series E Preferred Stock, including, without limitation, by way of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any shares of Series E Preferred Stock into shares of Common Stock that is requested in accordance with the provisions of this Certificate of Determination;

(iv) at any time following the tenth (10 th ) consecutive day that any Holder’s Authorized Share Allocation is less than the number of shares of Common Stock that such Holder would be entitled to receive upon a conversion of the Conversion Amount of all shares of Series E Preferred Stock held by such Holder (without regard to any limitations on conversion set forth in Section 7 or otherwise);

(v) the Company’s failure to pay to any Holder any amount when and as due under this Certificate of Determination (including, without limitation, the Company’s failure to pay any Dividends, redemption payments or amounts hereunder), the Securities Purchase Agreement or any other Transaction Document, and any such failure continues uncured for at least two (2) days after notice from any Holder;

(vi) any restrictive or other legend (other than the legend expressly required by Section 3(d)(vii)) is placed on any certificate representing any of the Securities;

(vii) bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company or any material Subsidiary and, if instituted against the Company or any material Subsidiary by a third party, shall not be dismissed within forty-five (45) days of their initiation;

(viii) the commencement by the Company or any material Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any material Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any material Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company or any material Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a UCC foreclosure sale or any other similar action under federal, state or foreign law;

(ix) the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any material Subsidiary of a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any material Subsidiary as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company or any material Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any material Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period of forty-five (45) consecutive days;

(x) a final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or any of its material Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, that any judgment which is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $250,000 amount set forth above so long as the Company provides each Holder of shares of Series E Preferred Stock a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to each such Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within forty-five (45) days of the issuance of such judgment;

(xi) the Company and/or any Subsidiary, individually or in the aggregate, fails to pay, when due, or within any applicable grace period, any payment with respect to any indebtedness in excess of $250,000 due to any third party, other than, with respect to unsecured indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance with United States generally accepted accounting principles, or otherwise be in breach or violation of any agreement for monies owed or owing in an amount in excess of $250,000, which breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder that are in excess of $500,000;

(xii) a false certification by the Company that the Equity Conditions are satisfied, that there has been no Equity Conditions Failure, Dollar Failure or Volume Failure or as to whether or not a Triggering Event has occurred; or

(xiii) the Company breaches in any material respect any representation, warranty, covenant or other term or condition of the Securities Purchase Agreement or any Transaction Document, except, in the case of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of three (3) days following notice from any Holder.

(b) Redemption Option Upon Triggering Event . Within one (1) Business Day after the occurrence of a Triggering Event, the Company shall deliver written notice thereof via facsimile and overnight courier (with next day delivery specified) (“ Notice of Triggering Event ”) to each Holder. At any time after the earlier of a Holder’s receipt of a Notice of Triggering Event and such Holder becoming aware of a Triggering Event, such Holder shall have the right, at such Holder’s option, to require the Company to redeem up to all of such Holder’s shares of Series E Preferred Stock by delivering written notice thereof via facsimile and overnight courier (with next day delivery specified) (“ Notice of Redemption at Option of Holder ”) to the Company, which Notice of Redemption at Option of Holder shall indicate the number of shares of Series E Preferred Stock that such Holder is electing to redeem. In addition to all other rights of such Holder contained herein, each share of Series E Preferred Stock subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price per share of Series E Preferred Stock equal to the greater of (i) the product of (A) the Conversion Amount and (B) the Triggering Event Redemption Premium and (ii) the product of (X) the Conversion Rate with respect to the Conversion Amount in effect at such time as such Holder delivers a Notice of Redemption at Option of Holder and (Y) the product of (1) the Equity Value Redemption Premium and (2) the greatest of (I) the Closing Sale Price of the Common Stock on the date immediately preceding such Triggering Event, (II) the Closing Sale Price of the Common Stock on the date immediately after such Triggering Event and (III) the Closing Sale Price of the Common Stock on the date such Holder delivers the Notice of Redemption at Option of Holder (the “ Triggering Event Redemption Price ”).

(c) Payment of Redemption Price . Upon the Company’s receipt of the first Notice of Redemption at Option of Holder from any Holder, the Company shall immediately notify each other Holder by facsimile of the Company’s receipt of such notice. The Company shall deliver on the fifth (5 th ) Business Day after the Company’s receipt of the first Notice of Redemption at Option of Holder the applicable Triggering Event Redemption Price to all Holders that deliver a Notice of Redemption at Option of Holder prior to the fifth (5 th ) Business Day after the Company’s receipt of the first Notice of Redemption at Option of Holder. The Company shall deliver on the second (2 nd ) Business Day after the Company’s receipt of a Notice of Redemption at Option of Holder the applicable Triggering Event Redemption Price to a Holder who delivers a Notice of Redemption at Option of Holder at any time on or following the fifth (5 th ) Business Day after the Company’s receipt of such the first Notice of Redemption at Option of Holder. To the extent redemptions required by this Section 4 are deemed or determined by a court of competent jurisdiction to be prepayments of the shares of Series E Preferred Stock by the Company, such redemptions shall be deemed to be voluntary prepayments. If the Company is unable to redeem all of the shares of Series E Preferred Stock submitted for redemption, the Company shall (i) redeem a pro rata amount from each Holder based on the number of shares of Series E Preferred Stock submitted for redemption by such Holder relative to the total number of shares of Series E Preferred Stock submitted for redemption by all Holders and (ii) in addition to any remedy such Holder may have under this Certificate of Determination, the Securities Purchase Agreement and/or such Holder’s Exchange Agreement, pay to each Holder interest at the rate of 2% per month (prorated for partial months) in respect of each unredeemed share of Series E Preferred Stock until paid in full. In the event of the Company’s redemption of any shares of Series E Preferred Stock under this Section 4, a Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for such Holder. Accordingly, any redemption premium due under this Section 4 is intended by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty.

(d) Void Redemption . In the event that the Company does not pay the Redemption Price within the time period set forth in Section 4(c), at any time thereafter and until the Company pays such unpaid applicable Triggering Event Redemption Price in full, a Holder shall have the option to, in lieu of redemption, require the Company to promptly return to such Holder any or all of the shares of Series E Preferred Stock that were submitted for redemption by such Holder under this Section 4 and for which the applicable Triggering Event Redemption Price (together with any interest thereon) has not been paid, by sending written notice thereof to the Company (whether via facsimile or otherwise) (the “ Void Optional Redemption Notice ”). Upon the Company’s receipt of such Holder’s Void Optional Redemption Notice, (i) such Holder’s Notice of Redemption at Option of Holder shall be null and void with respect to those shares of Series E Preferred Stock subject to such Void Optional Redemption Notice, (ii) the Company shall immediately return to such Holder any shares of Series E Preferred Stock subject to such Void Optional Redemption Notice, and (iii) the Conversion Price of such returned shares of Series E Preferred Stock shall be adjusted to the lesser of (A) the Conversion Price as in effect on the date on which such Void Optional Redemption Notice is delivered to the Company and (B) the lowest Closing Bid Price of the Common Stock during the period beginning on and including the date on which such Holder’s Notice of Redemption at Option of Holder is delivered to the Company and ending on and including the date on which such Void Optional Redemption Notice is delivered to the Company.

(e) Disputes; Miscellaneous . In the event of a dispute as to the determination of the arithmetic calculation of the Triggering Event Redemption Price, such dispute shall be resolved pursuant to Section 3(d)(iii) above with the term “Triggering Event Redemption Price” being substituted for the term “Conversion Rate.” A Holder’s delivery of a Void Optional Redemption Notice and exercise of its rights following such notice shall not effect the Company’s obligations to make any payments which have accrued prior to the date of such notice. In the event of a redemption pursuant to this Section 4 of less than all of the shares of Series E Preferred Stock represented by a particular Preferred Share Certificate, the Company shall promptly cause to be issued and delivered to such Holder of such shares of Series E Preferred Stock a Preferred Share Certificate representing the remaining shares of Series E Preferred Stock which have not been redeemed, if necessary.

5. Automatic Conversion or Company Redemption .

(a) General . On each applicable Redemption Date, each Holder’s Redemption Amount applicable to such Redemption Date shall be automatically converted, provided that there is not then an Equity Conditions Failure, in accordance with this Section 5(a) into shares of Common Stock (an “ Automatic Conversion ”), provided that the Company may, at its option as described below, in lieu of such Automatic Conversion redeem such Holder’s Redemption Amount in cash (a “ Company Redemption ”), subject to the provisions of this Section 5, provided further that an Automatic Conversion shall not occur with respect to such Holder’s Redemption Amount and the Company shall instead be required to elect and to redeem such Holder’s Redemption Amount in cash pursuant to a Company Redemption if on the applicable Redemption Notice Due Date or on the applicable Redemption Date (as the case may be) there is an Equity Conditions Failure, a Volume Failure or a Dollar Failure. On or prior to the date which is the twentieth (20 th ) Trading Day prior to each Redemption Date (each, a “ Redemption Notice Due Date ”) (provided that the Redemption Notice Due Date for the Redemption Date that is June 1, 2009 shall be the Initial Issuance Date), the Company shall deliver written notice (each, a “ Company Redemption Notice ” and the date all of the Holders receive such notice is referred to as to the “ Company Redemption Notice Date ”), to each Holder of shares of Series E Preferred Stock which Company Redemption Notice shall (i) either (A) confirm that such Holder’s Redemption Amount shall be automatically converted in whole pursuant to an Automatic Conversion or (B) state that the Company elects to redeem, or is required to redeem in accordance with the provisions of this Certificate of Determination, such Holder’s Redemption Amount in whole pursuant to a Company Redemption and (ii) if such Holder’s Redemption Amount is to be converted pursuant to an Automatic Conversion, certify that there is not then an Equity Conditions Failure, a Dollar Failure or a Volume Failure as of the date of the Company Redemption Notice. Each Company Redemption Notice shall be irrevocable by the Company. If the Company does not timely deliver a Company Redemption Notice in accordance with this Section 5(a), then the Company shall be deemed to have delivered an irrevocable Company Redemption Notice confirming an Automatic Conversion and shall be deemed to have certified that there is not then an Equity Conditions Failure, a Dollar Failure or a Volume Failure in connection with any such conversion. No later than two (2) Trading Days after delivery of a Company Redemption Notice setting forth an Automatic Conversion, the Company shall deliver to such Holder’s account with DTC such number of shares of Common Stock (the “ Pre-Redemption Conversion Shares ”) equal to the quotient of (x) such Holder’s Redemption Amount divided by (y) the Pre-Redemption Conversion Price, and as to which such Holder shall be the owner thereof as of such time of delivery or deemed delivery (as the case may be) of such Company Redemption Notice. If the Company elects a Company Redemption with respect to any Holder for a Redemption Date, then the Company must elect a Company Redemption with respect to all Holders for such Redemption Date. An Automatic Conversion (whether set forth in the Company Redemption Notice or by operation of this Section 5(a)) shall be converted in accordance with Section 5(b) and a Company Redemption shall be redeemed in accordance with Section 5(c).

(b) Mechanics of Automatic Conversion . Subject to Section 5(a), if the Company delivers a Company Redemption Notice and confirms, or is deemed to have delivered a Company Redemption Notice and is deemed to have confirmed, in whole, an Automatic Conversion in accordance with Section 5(a), then the remainder of this Section 5(b) shall apply. Such Holder’s Redemption Amount shall be automatically converted as of the applicable Redemption Date on such Redemption Date at the Automatic Conversion Price and the Company shall, on the applicable Redemption Date, deliver to such Holder’s account with DTC such shares of Common Stock issued upon such Automatic Conversion (subject to the reduction contemplated by the immediately following sentence and, if applicable, the last sentence of this Section 5(b)), provided that the Equity Conditions are then satisfied (or waived in writing by such Holder) on such Redemption Date and an Automatic Conversion is not otherwise prohibited under any other provision of this Certificate of Determination (including, without limitation, as a result of the occurrence of a Dollar Failure (determined as of the applicable Redemption Date) or a Volume Failure (determined as of the applicable Redemption Date)), and upon such conversion and delivery the number of shares of Series E Preferred Stock then held by such Holder shall be reduced, due to such conversion, by a number of shares equal to the quotient of (1) such Holder’s Redemption Amount divided by (2) the Stated Value of one share of Series E Preferred Stock (with the quotient rounded down to the nearest whole number) (such rounded quotient being the “ Converted Shares ”). The number of shares of Common Stock to be delivered upon such Automatic Conversion shall be reduced by the amount of any Pre-Redemption Conversion Shares delivered to such Holder in connection with such Redemption Date. On each applicable Redemption Date, the Company shall also deliver to such Holder’s account with DTC such number of shares of Common Stock equal to the quotient of (A) the aggregate Additional Amount on each of the applicable Converted Shares by (B) the Automatic Conversion Price with respect to the applicable Redemption Date. If a Triggering Event occurs during any applicable Automatic Conversion Measuring Period, then either (i) such Holder shall return any Pre-Redemption Conversion Shares delivered in connection with the applicable Redemption Date or (ii) the Conversion Amount used to calculate the Triggering Event Redemption Price shall be reduced by the product of (x) such Holder’s Redemption Amount applicable to such Redemption Date multiplied by (y) the Conversion Share Ratio. If any of Equity Conditions are not satisfied (or waived in writing by such Holder) on such Redemption Date or an Automatic Conversion is not otherwise permitted under any other provision of this Certificate of Determination (including, without limitation, as a result of the occurrence of a Volume Failure (determined as of the applicable Redemption Date) or a Dollar Failure (determined as of the applicable Redemption Date)), then, at the option of such Holder designated in writing to the Company, such Holder may require the Company to do any one or more of the following: (i) the Company shall redeem all or any part designated by such Holder of such Holder’s Redemption Amount plus the Additional Amount thereon (such designated amount is referred to as the “ Designated Redemption Amount ”) and the Company shall pay to such Holder within three (3) days of such Redemption Date, by wire transfer of immediately available funds, an amount in cash equal to 135% (or, 110% only if clause (iv) of the Equity Conditions is not satisfied, a Volume Failure occurs (determined as of the applicable Redemption Date) or a Dollar Failure occurs (determined as of the applicable Redemption Date), in each case, with respect to the applicable Redemption Date) of such Designated Redemption Amount, and/or (ii) the Automatic Conversion shall be null and void with respect to all or any part designated by such Holder of such Holder’s Redemption Amount and such Holder shall be entitled to all the rights of a holder of shares of Series E Preferred Stock with respect to such part of such Holder’s Redemption Amount; provided, however, that the Conversion Price in respect of shares of Series E Preferred Stock, as may be designated from time to time by such Holder, having a Stated Value equal to such part of such Holder’s Redemption Amount shall thereafter be adjusted to equal the lesser of (A) the Automatic Conversion Price as in effect on the date on which such Holder voided such Automatic Conversion and (B) the Automatic Conversion Price that would be in effect on the date on which such Holder delivers a Conversion Notice relating thereto as if such date was a Redemption Date (provided that this proviso shall not apply with respect to the applicable Redemption Date only if clause (iv) of the Equity Conditions is not satisfied, a Volume Failure occurs (determined as of the applicable Redemption Date) or a Dollar Failure occurs (determined as of the applicable Redemption Date), in each case, with respect to such Redemption Date). In addition, if any of the Equity Conditions are not satisfied (or waived in writing by such Holder) on such Redemption Date or an Automatic Conversion is not otherwise permitted under any other provision of this Certificate of Determination (including, without limitation, as a result of the occurrence of a Volume Failure (determined as of the applicable Redemption Date) or a Dollar Failure (determined as of the applicable Redemption Date)), then, at such Holder’s option, either (I) such Holder shall return any Pre-Redemption Conversion Shares delivered in connection with the applicable Redemption Date or (II) the applicable Designated Redemption Amount shall be reduced by the product of (X) such Holder’s Redemption Amount applicable to such Redemption Date multiplied by (Y) the Conversion Share Ratio. If the Company fails to redeem any Designated Redemption Amount by the third (3 rd ) day following the applicable Redemption Date by payment of such amount on the applicable Redemption Date, then such Holder shall have the rights set forth in Section 5(d) as if the Company failed to pay the applicable Company Redemption Price (as defined below) and all other rights under this Certificate of Determination (including, without limitation, such failure constituting a Triggering Event described in Section 4(a)(v)). Notwithstanding anything to the contrary in this Section 5(b), but subject to 3(b), until the Company delivers Common Stock representing all or any portion of such Holder’s Redemption Amount to such Holder pursuant to an Automatic Conversion, such Holder’s Redemption Amount may be converted by such Holder into Common Stock pursuant to Section 3. If, with respect to a Redemption Date, the number of Pre-Redemption Conversion Shares delivered to a Holder exceeds the number of Post-Redemption Conversion Shares with respect to such Redemption Date, then the number of shares of Common Stock equal to such excess shall constitute a credit against the number of shares of Common Stock to be issued to such Holder pursuant to Sections 3 and 5(b) hereof and shall reduce the number of shares of Common Stock required to be actually issued by the Company to such Holder under such sections on a share-for-share basis until such time as the number of shares that would have been issued by the Company to such Holder (not taking account of such credit) equals the amount of such excess.

(c) Mechanics of Company Redemption . If the Company elects, or is required to elect, a Company Redemption in accordance with Section 5(a), then such Holder’s Redemption Amount shall be redeemed by the Company on the applicable Redemption Date, and the Company shall pay to such Holder on such Redemption Date, by wire transfer of immediately available funds, an amount in cash equal to 110% of such Holder’s Redemption Amount (the “ Company Redemption Price ”). Upon receipt by such Holder of the entire applicable Company Redemption Price, a number of shares of Series E Preferred Stock then held by such Holder equal to the quotient of (i) such Holder’s Redemption Amount divided by (ii) the Stated Value of one share of Series E Preferred Stock (with the quotient rounded down to the nearest whole number) shall be cancelled and no longer be outstanding (such rounded quotient being the “ Redeemed Shares ”). On each applicable Redemption Date, the Company shall also pay to such Holder an amount in cash equal to the aggregate Additional Amount with respect to each of the applicable Redeemed Shares. If the Company fails to redeem such Holder’s Redemption Amount or pay such aggregate Additional Amount on the applicable Redemption Date by payment of the Company Redemption Price or the aggregate Additional Amount on such date, then, at the option of such Holder designated in writing to the Company (any such designation shall be a “Conversion Notice” for purposes of this Certificate of Determination), such Holder may require the Company to convert all or any part of such Holder’s Redemption Amount plus the aggregate Additional Amount at the Automatic Conversion Price (determined as of the date of such designation). Conversions required by this Section 5(c) shall be made in accordance with the provisions of Section 3(b). Notwithstanding anything to the contrary in this Section 5(c), but subject to Section 3(b), until the Company Redemption Price is paid in full, such Holder’s Redemption Amount may be converted, in whole or in part, by such Holder into Common Stock pursuant to Section 3; provided, however, such Holder may not deliver a Conversion Notice to the Company solely relating to the shares of Series E Preferred Stock subject to a Company Redemption beginning on the date that is two (2) Trading Days prior to the applicable Redemption Date through such Redemption Date.

(d) Miscellaneous . To the extent redemptions required by this Section 5 are deemed or determined by a court of competent jurisdiction to be prepayments of the shares of Series E Preferred Stock by the Company, such redemptions shall be deemed to be voluntary prepayments. In the event of the Company’s redemption of any shares of Series E Preferred Stock under this Section 5, a Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for such Holder. Accordingly, any redemption premium due under this Section 5 is intended by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty. In the event that the Company does not effect an Automatic Conversion or Company Redemption (as the case may be) on the applicable Redemption Date, then, in addition to all other rights and remedies available to such Holder, such Holder shall have the right to void the conversion or redemption (as the case may be) pursuant to Section 4(d) with the term “Redemption Amount” being substituted for “Triggering Event Redemption Price” and “Company Redemption Notice” being substituted for “Notice of Redemption at Option of Holder,” shall have all rights of a Holder under Section 4(d) and Section 4(e) as if they were part of this Section 5 and applied to this Section 5 and the Company shall pay to such Holder interest at the rate of 2% per month (prorated for partial months) in respect of such Holder’s Redemption Amount until converted or redeemed (as the case may be) in full.

6. Other Rights of Holders .

(a) Assumption . The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing all of the obligations of the Company under this Certificate of Determination in accordance with the provisions of this Section 6(a) pursuant to written agreements in form and substance satisfactory to the Required Holders and approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of shares of Series E Preferred Stock in exchange for such shares of Series E Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Certificate of Determination, including, without limitation, having a stated value and dividend rate equal to the stated value and dividend rate of the shares of Series E Preferred Stock held by the Holders and having similar ranking to the shares of Series E Preferred Stock, and reasonably satisfactory to the Required Holders and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose shares of common stock are quoted on or listed for trading on an Eligible Market (other than the “pink sheets” over-the-counter market). Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Determination, the other Transaction Documents and the Securities Purchase Agreement referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Certificate of Determination, the other Transaction Documents and the Securities Purchase Agreement with the same effect as if such Successor Entity had been named as the Company herein and therein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to each Holder confirmation that there shall be issued upon conversion or redemption of the shares of Series E Preferred Stock at any time after the consummation of such Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 6(b) and 13, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption of the shares of Series E Preferred Stock prior to such Fundamental Transaction, such shares of publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity) which each Holder would have been entitled to receive upon the happening of such Fundamental Transaction had the shares of Series E Preferred Stock held by each Holder been converted immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of the Series E Preferred Stock contained in this Certificate of Determination), as adjusted in accordance with the provisions of this Certificate of Determination. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any limitations on the conversion or redemption of the shares of Series E Preferred Stock.

(b) Purchase Rights . In addition to any adjustments pursuant to Section 3(f) above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all the record holders of any class of Common Stock (the “ Purchase Rights ”), then each of the Holders will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares of Common Stock acquirable upon complete conversion of the shares of Series E Preferred Stock (without taking into account any limitations or restrictions on the convertibility of the shares of Series E Preferred Stock) held by such Holder immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the extent that a Holder’s right to participate in any such Purchase Right would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for such Holder until such time, if ever, as its right thereto would not result in such Holder exceeding the Maximum Percentage).

(c) Other Corporate Events . In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “ Corporate Event ”), the Company shall make appropriate provision to insure that each Holder will thereafter have the right to receive upon a conversion of the shares of Series E Preferred Stock held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the Series E Preferred Stock contained in this Certificate of Determination) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Series E Preferred Stock held by such Holder initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of the shares of Series E Preferred Stock contained in this Certificate of Determination.

7. Limitation on Beneficial Ownership . Notwithstanding anything to the contrary contained in this Certificate of Determination, the shares of Series E Preferred Stock held by a Holder shall not be convertible by such Holder, and the Company shall not effect any conversion of any shares of Series E Preferred Stock held by such Holder or otherwise issue to such Holder any shares of Common Stock pursuant to Sections 2 or 5 hereof, to the extent (but only to the extent) that such Holder or any of its affiliates would beneficially own in excess of 9.9% (the “ Maximum Percentage ”) of the Common Stock. To the extent the above limitation applies, the determination of whether the shares of Series E Preferred Stock held by such Holder shall be convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by such Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability of a Holder to convert shares of Series E Preferred Stock, or of the Company to issue shares of Common Stock to such Holder, pursuant to this Section 7 shall have any effect on the applicability of the provisions of this Section 7 with respect to any subsequent determination of convertibility or issuance (as the case may be). For purposes of this Section 7, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder. The provisions of this Section 7 shall be implemented in a manner otherwise than in strict conformity with the terms of this Section 7 to correct this Section 7 (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this Section 7 shall apply to a successor Holder. The holders of Common Stock shall be third party beneficiaries of this Section 7 and the Company may not waive this Section 7 without the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of a Holder, the Company shall within two (2) Business Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including, without limitation, pursuant to this Certificate of Determination or securities issued pursuant to the Exchange Agreements. Each delivery of a Conversion Notice by a Holder will constitute a representation by such Holder that it has evaluated the limitation set forth in this Section 7 and determined that issuance of the full number of shares of Common Stock issuable upon conversion of the shares of Series E Preferred Stock requested by such Holder in such Conversion Notice is permitted under this Section 7.

8. Authorized Shares .

(a) Reservation . The Company shall have sufficient authorized and unissued shares of Common Stock for each of the shares of Series E Preferred Stock equal to 133% of the sum of (i) the number of shares of Common Stock necessary to effect the conversion at the Conversion Rate with respect to the Conversion Amount of each share of Series E Preferred Stock as of the Initial Issuance Date, (ii) the number of Dividend Shares issuable hereunder, determined as if issued as of the Trading Day immediately preceding the applicable date of determination and (iii) the number of shares of Common Stock necessary to effect the exercise of all of the Warrants. So long as any of the shares of Series E Preferred Stock are outstanding, the Company shall take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series E Preferred Stock, the number of shares of Common Stock as shall from time to time be necessary to effect the conversion of all of the shares of Series E Preferred Stock then outstanding; provided that at no time shall the number of shares of Common Stock so available be less than the number of shares required to be reserved by the previous sentence (without regard to any limitations on conversions contained in this Certificate of Determination) (the “ Required Amount ”); provided, further, that any Dividend Shares issued by the Company shall not be issued from any shares of Common Stock so reserved. The initial number of shares of Common Stock reserved for conversions of the shares of Series E Preferred Stock and each increase in the number of shares so reserved shall be allocated pro rata among the Holders based on the number of shares of Series E Preferred Stock held by each Holder at the time of issuance of shares of Series E Preferred Stock or increase in the number of reserved shares (as the case may be) (the “ Authorized Share Allocation ”). In the event a Holder shall sell or otherwise transfer any of such Holder’s shares of Series E Preferred Stock, each transferee shall be allocated a pro rata portion of the number of reserved shares of Common Stock reserved for such transferor. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any shares of Series E Preferred Stock shall be allocated to the remaining Holders of shares of Series E Preferred Stock, pro rata based on the number of shares of Series E Preferred Stock then held by such Holders.

(b) Insufficient Authorized Shares . If, notwithstanding Section 8(a) and not in limitation thereof, at any time while any of the shares of Series E Preferred Stock remain outstanding the Company does not have a sufficient number of authorized and unissued shares of Common Stock to satisfy its obligation to have available for issuance upon conversion of the shares of Series E Preferred Stock at least a number of shares of Common Stock equal to the Required Amount (an “ Authorized Share Failure ”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to have available the Required Amount for the shares of Series E Preferred Stock then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares of Common Stock and to cause its Board to recommend to the stockholders that they approve such proposal.

9. Voting Rights . Holders of shares of Series E Preferred Stock shall have no voting rights, except as required by law, including but not limited to the Corporations Code, and as expressly provided in this Certificate of Determination. To the extent that under the Corporations Code the vote of the holders of the Series E Preferred Stock, voting separately as a class or series as applicable, is required to authorize a given action of the Company, the affirmative vote or consent of the holders of all of the shares of the Series E Preferred Stock, voting together in the aggregate and not in separate series unless required under the Corporations Code, represented at a duly held meeting at which a quorum is presented or by written consent of all of the shares of Series E Preferred Stock (except as otherwise may be required under the Corporations Code), voting together in the aggregate and not in separate series unless required under the Corporations Code, shall constitute the approval of such action by both the class or the series, as applicable. Subject to Section 7, to the extent that under the Corporations Code holders of the Series E Preferred Stock are entitled to vote on a matter with holders of shares of Common Stock, voting together as one class, each share of Series E Preferred Stock shall entitle the holder thereof to cast that a number of votes per share as is equal to the number of shares of Common Stock into which it is then convertible (subject to the ownership limitations specified in Section 7 hereof) using the recorded date for determining the stockholders of the Company eligible to vote on such matters as the date as of which the Conversion Price is calculated. Holders of the Series E Preferred Stock shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy materials and other information sent to stockholders) with respect to which they would be entitled by vote, which notice would be provided pursuant to the Company’s bylaws and the Corporations Code).

10. Fundamental Transaction Redemption Right . No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior to the consummation of a Fundamental Transaction, but not prior to the public announcement of such Fundamental Transaction, the Company shall deliver written notice thereof via facsimile and overnight courier to each Holder of Series E Preferred Stock (a “ Fundamental Transaction Notice ”). At any time during the period beginning after a Holder’s receipt of a Fundamental Transaction Notice and ending on the date that is the later of twenty (20) Trading Days after (A) consummation of such Fundamental Transaction or (B) the date of receipt of such Fundamental Transaction Notice, such Holder may require the Company to redeem all or any portion of such Holder’s shares of Series E Preferred Stock by delivering written notice thereof (“ Fundamental Transaction Redemption Notice ”) to the Company, which Fundamental Transaction Redemption Notice shall indicate the aggregate Conversion Amount such Holder is electing to redeem. Any shares of Series E Preferred Stock subject to redemption pursuant to this Section 10 shall be redeemed by the Company in cash at a price equal to the greater of (i) the product of the Fundamental Transaction Redemption Premium and the Conversion Amount being redeemed and (ii) the product of (x) the Equity Value Redemption Premium and (y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to the holders of the shares of Common Stock upon consummation of such Fundamental Transaction (any such non-cash consideration to be valued at the higher of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation of such Fundamental Transaction, the Closing Sale Price of the Common Stock on the Trading Day immediately following the public announcement of such proposed Fundamental Transaction and the Closing Sale Price of the Common Stock on the Trading Day immediately prior to the public announcement of such proposed Fundamental Transaction) by (II) the Conversion Price (the “ Fundamental Transaction Redemption Price ”). Redemptions required by this Section 10 shall have priority to payments to all other stockholders of the Company in connection with such Fundamental Transaction. To the extent redemptions required by this Section 10 are deemed or determined by a court of competent jurisdiction to be prepayments of the shares of Series E Preferred Stock by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 10, but subject to Section 7, until the Fundamental Transaction Redemption Price is paid in full, the Conversion Amount submitted by a Holder for redemption under this Section 10 may be converted, in whole or in part, by such Holder into Common Stock pursuant to Section 3 or in the event the Conversion Date is after the consummation of such Fundamental Transaction, stock or equity interests of the Successor Entity substantially equivalent to the Company’s shares of Common Stock pursuant to Section 3. In the event of the Company’s redemption of any portion of the shares of Series E Preferred Stock under this Section 10, such Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for a Holder. Accordingly, any redemption premium due under this Section 10 is intended by the parties to be, and shall be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty. The Company shall make payment of the Fundamental Transaction Redemption Price concurrently with the consummation of such Fundamental Transaction if such a Fundamental Transaction Redemption Notice is received prior to the consummation of such Fundamental Transaction and within two (2) Trading Days after the Company’s receipt of such notice otherwise (the “ Fundamental Transaction Redemption Date ”). In the event that the Company does not pay the Fundamental Transaction Redemption Price on the Fundamental Transaction Redemption Date, then, in addition to all other rights and remedies available to such Holder, such Holder shall have the right to void the redemption pursuant to Section 4(d) with the term “Fundamental Transaction Redemption Price” being substituted for “Triggering Event Redemption Price” and “Fundamental Transaction Redemption Notice” being substituted for “Notice of Redemption at Option of Holder,” shall have all rights of a Holder under Section 4(d) and Section 4(e) as if they were part of this Section 10 and applied to this Section 10 and the Company shall pay to such Holder interest at the rate of 2% per month (prorated for partial months) in respect of such Holder’s Fundamental Transaction Redemption Price until paid in full.

11. Liquidation, Dissolution, Winding-Up . In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Company, whether from capital or from earnings available for distribution to its stockholders (the “ Liquidation Funds ”), before any amount shall be paid to the holders of any of shares of the capital stock of the Company of any class junior in rank to the shares of Series E Preferred Stock in respect of the preferences as to distributions and payments on the liquidation, dissolution and winding up of the Company, an amount per share of Series E Preferred Stock equal to 135% of the Conversion Amount thereof on the date of such payment; provided that, if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of other classes or series of shares of preferred stock of the Company that are of equal rank with the shares of Series E Preferred Stock as to payments of Liquidation Funds (the “ Pari Passu Shares ”), then each Holder and Pari Passu Shares shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds payable to such Holder as a liquidation preference, in accordance with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of shares of Series E Preferred Stock and Pari Passu Shares. To the extent necessary, the Company shall cause such actions to be taken by any of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance with this Section. All the preferential amounts to be paid to the Holders under this Section shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Company to the holders of shares capital stock of the Company (including, without limitation, other classes or series of shares of preferred stock of the Company) junior in rank to the shares of Series E Preferred Stock in connection with a Liquidation Event as to which this Section applies.

12. Preferred Rank . All shares of capital stock of the Company shall be junior in rank to all shares of Series E Preferred Stock with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company. The rights of all such shares of capital stock of the Company shall be subject to the preferences and relative rights of the shares of Series E Preferred Stock. Without the prior express written consent of the Required Holders, the Company shall not hereafter authorize or issue additional or other capital shares that is of senior or pari passu rank to the shares of Series E Preferred Stock in respect of the preferences as to distributions and payments upon the liquidation, dissolution and winding up of the Company (collectively, the “ Senior Preferred ”). The Company shall be permitted to issue shares of preferred stock that are junior in rank to the shares of Series E Preferred Stock in respect of the preferences as to distributions and payments upon the liquidation, dissolution and winding up of the Company, provided that the maturity date (or any other date requiring redemption or repayment of such shares of preferred stock) of any such junior shares of preferred stock are not on or before the Final Redemption Date. In the event of the merger or consolidation of the Company with or into another corporation, the shares of Series E Preferred Stock shall maintain their relative powers, designations and preferences provided for herein and no merger shall result inconsistent therewith.

13. Participation . The Holders shall, as holders of shares of Series E Preferred Stock, be entitled to receive such dividends paid and distributions made to the holders of shares of Common Stock to the same extent as if such Holders had converted each share of Series E Preferred Stock held by each of them into shares of Common Stock (without regard to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends and distributions. Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of shares of Common Stock (provided, however, that to the extent that a Holder’s right to participate in any such dividend or distribution would result in such Holder exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such dividend or distribution to such extent (or the beneficial ownership of any such shares of Common Stock as a result of such dividend or distribution to such extent) and such dividend or distribution to such extent shall be held in abeyance for the benefit of such Holder until such time, if ever, as its right thereto would not result in such Holder exceeding the Maximum Percentage).

14. Vote to Change the Terms of or Issue Series E Preferred Stock . In addition to any other rights provided by law, except where the vote or written consent of the holders of a greater number of shares is required by law or by another provision of the Articles of Incorporation, without first obtaining the affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the Required Holders, voting together as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision to, its Articles of Incorporation or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series E Preferred Stock, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of shares of Series E Preferred Stock; (c) create or authorize (by reclassification or otherwise) any new class or series of shares that has a preference over or is on a parity with the Series E Preferred Stock with respect to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Company; (d) purchase, repurchase or redeem any shares of capital stock of the Company junior in rank to the Series E Preferred Stock (other than pursuant to equity incentive agreements (that have in good faith been approved by the Board) with employees giving the Company the right to repurchase shares upon the termination of services); (e) pay dividends or make any other distribution on any shares of any capital stock of the Company junior in rank to the Series E Preferred Stock; (f) issue any shares of Series E Preferred Stock other than pursuant to the Exchange Agreements; or (g) whether or not prohibited by the terms of the Series E Preferred Stock, circumvent a right of the Series E Preferred Stock.

15. Lost or Stolen Certificates. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of any Preferred Share Certificates representing shares of Series E Preferred Stock (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of an indemnification undertaking by a Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of the Preferred Share Certificate(s), the Company shall execute and deliver new Preferred Share Certificate(s) of like tenor and date; provided, however, the Company shall not be obligated to re-issue Preferred Share Certificates if such Holder contemporaneously requests the Company to convert such shares of Series E Preferred Stock into shares of Common Stock.

16. Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Determination shall be cumulative and in addition to all other remedies available under this Certificate of Determination, the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and no remedy contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy. Nothing herein shall limit a Holder’s right to pursue actual damages for any failure by the Company to comply with the terms of this Certificate of Determination. The Company covenants to each Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holders and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holders shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required.

17. Noncircumvention . The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Certificate of Determination, and will at all times in good faith carry out all the provisions of this Certificate of Determination and take all action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing or any other provision of this Certificate of Determination, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the conversion of any shares of Series E Preferred Stock above the Conversion Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the conversion of shares of Series E Preferred Stock, and (iii) shall, so long as any shares of Series E Preferred Stock are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of Series E Preferred Stock, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the conversion of the shares of Series E Preferred Stock (without regard to any limitations on conversion contained herein).

18. Failure or Indulgence Not Waiver . No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party. This Certificate of Determination shall be deemed to be jointly drafted by the Company and all Holders and shall not be construed against any Person as the drafter hereof.

19. Notice . Whenever notice is required to be given under this Certificate of Determination, unless otherwise provided herein, such notice must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with an overnight courier service (with next day delivery specified), in each case, properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

NutraCea

5090 N. 40th Street , Suite 400

Phoenix, AZ 85018

Telephone: (602) 522-3000

Facsimile: (602) 522-3001

Attention: Chief Executive Officer

General Counsel

With a copy (for informational purposes only) to:

Weintraub Genshlea Chediak Law Corporation

400 Capitol Mall

Sacramento, CA 95814

Telephone: (916) 558-6164

Facsimile: (916) 446-1611

Attention: Christopher Chediak, Esq.

Michael DeAngelis, Esq.

If to the Transfer Agent:

American Stock Transfer & Trust

59 Maiden Lane, Plaza Level - Lobby

New York, NY 10038

Telephone: (718) 921-8143

Facsimile: (718) 921-8116

Attention: Joe Wolf, Vice President

If to a Holder, to its address and facsimile number set forth in the records of the Company,

with a copy (for informational purposes only) to each of:

Greenberg Traurig, LLP

77 W. Wacker Drive, Suite 3100

Chicago, Illinois 60601

Telephone: (312) 456-8400

Facsimile: (312) 456-8435

Attention: Peter H. Lieberman, Esq.

Todd A. Mazur, Esq.

Feldman Weinstein & Smith LLP

The Graybar Building

420 Lexington Avenue

New York, New York 10170

Telephone: (212) 869-7000

Facsimile: (212) 401-4741

Attention: Robert F. Charron

or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service, shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

20. Transfer of Series E Preferred Stock . A Holder may transfer some or all of its shares of Series E Preferred Stock without the consent of the Company; provided that such Holder provides the Company with written notice thereof within a reasonable period of time thereafter of the transferee and the number of shares of Series E Preferred Stock so transferred.

21. Series E Preferred Stock Register . The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to the Holders), a register for the Series E Preferred Stock, in which the Company shall record the name, address and facsimile number of the Persons in whose name the shares of Series E Preferred Stock have been issued, as well as the name and address of each transferee. The Company may treat the Person in whose name any Series E Preferred Stock is registered on the register as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, but in all events recognizing any properly made transfers.

22. Stockholder Matters . Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the rules and regulations of the Eligible Market on which the Common Stock is then listed, the Corporations Code, this Certificate of Determination or otherwise with respect to the issuance of Series E Preferred Stock or the shares of Common Stock issuable upon conversion thereof or the issuance of any Warrants and the Warrant Shares may be effected by written consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders, all in accordance with the applicable rules and regulations of such Eligible Market and the Corporations Code. This provision is intended to comply with the applicable sections of the Corporations Code permitting stockholder action, approval and consent affected by written consent in lieu of a meeting.

23. Notices . The Company shall provide each Holder of Series E Preferred Stock with prompt written notice of all actions taken pursuant to the terms of this Certificate of Determination, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company shall give written notice to each such Holder (i) promptly following any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least ten (10) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock as a class or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice being provided to such Holder.

24. Disclosure . Upon receipt or delivery by the Company of any notice in accordance with the terms of this Certificate of Determination, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or any of its Subsidiaries, the Company shall within one (1) Business Day after any such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, nonpublic information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holders contemporaneously with delivery of such notice, and in the absence of any such indication, the Holders shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries. Nothing contained in this Section 24 shall limit any obligations of the Company, or any rights of a Holder, under Section 4(i) of the Securities Purchase Agreement or under Section 4(h) of the Exchange Agreements.

* * * * *

EXHIBIT I

NUTRACEA CONVERSION NOTICE

Reference is made to the Certificate of Determination, Preferences and Rights of the Series E Convertible Preferred Stock of NutraCea (the “ Certificate of Determination ”). In accordance with and pursuant to the Certificate of Determination, the undersigned hereby elects to convert the number of shares of Series E Convertible Preferred Stock, no par value per share (the “ Series E Preferred Stock ”), of NutraCea, a California corporation (the “ Company ”), indicated below into shares of common stock, no par value per share (the “ Common Stock ”), of the Company, as of the date specified below.

Date of Conversion: ________________________________________________________________________

Number of shares of Series E Preferred Stock to be converted: ______________________________________

Share certificate no(s). of Series E Preferred Stock to be converted: __________________________________

Tax ID Number (If applicable): ______________________________________________________________

Please confirm the following information: _____________________________________________________________

Conversion Price:__________________________________________________________________________

Number of shares of Common Stock to be credited: ______________________________________________ 1

Number of shares of Common Stock to be issued: ________________________________________________

Please issue the shares of Common Stock into which the shares of Series E Preferred Stock are being converted in the following name and to the following address:

Issue to: ______________________________________________

____________________________________________

Address: _________________________________________

Telephone Number: ________________________________

Facsimile Number: ____________________________________________

Authorization: ________________________________________

By: ________________________________

Title: ________________________________

Dated:

Account Number (if electronic book entry transfer): ______________________________________________

Transaction Code Number (if electronic book entry transfer): _______________________________________

1 Only applicable if a credit exists under Section 5(b).

ACKNOWLEDGMENT

The Company hereby acknowledges this Conversion Notice and hereby directs [ ] to issue the above indicated number of shares of Common Stock in accordance with the Irrevocable Transfer Agent Instructions dated __________, 2009 from the Company and acknowledged and agreed to by [ ].

NUTRACEA


By:

Name:
Title:

The undersigned declares under penalty of perjury under the laws of the State of California that the matters set forth in this certificate are true and correct of his own knowledge.

The undersigned has executed this certificate in Phoenix, Arizona on May 7, 2009.


Name: David Bensol		Name: Olga Hernandez-Longan
Title: Chairman of the Board of Directors		Title: Chief Financial Officer

EXCHANGE AGREEMENT

This EXCHANGE AGREEMENT (the “ Agreement ”), dated as of May ___, 2009, is by and among NutraCea, a California corporation with offices located at 5090 N. 40th Street, Suite 400, Phoenix, Arizona 85018 (the “ Company ”), and _______________ (the “ Holder ”).

RECITALS

A. The Company, the Holder and various others entered into that certain Securities Purchase Agreement, dated as October 16, 2008 (as amended and modified by this Agreement and the Other Exchange Agreements (as defined below), the “ Purchase Agreement ”).

B. Simultaneously with the consummation of the transactions contemplated by the Purchase Agreement, the Company issued and sold to the Holder pursuant to the Registration Statement (as defined in the Purchase Agreement) (i) 3,000 shares of Series D Convertible Preferred Stock (the “ Series D Preferred Stock ”) and (ii) a Series A Warrant (as defined in the Purchase Agreement) initially exercisable for 2,727,273 shares of Common Stock (as defined below).

C. Since the issuance of the Series D Preferred Stock, one or more Triggering Events (as defined in the Certificate of Determination, Preferences and Rights of Series D Convertible Preferred Stock) may have occurred thereunder.

D. The Company has authorized a series of preferred stock entitled the “Series E Convertible Preferred Stock” (the “ Preferred Stock ”), which Preferred Stock shall be convertible into shares of the Company’s common stock, no par value per share (the “ Common Stock ”), in accordance with the terms of the Preferred Stock. The rights, preferences and other terms and provisions of the Preferred Stock are set forth in the Certificate of Determination, Preferences and Rights of Series E Convertible Preferred Stock in the form attached hereto as Exhibit A (the “ Certificate of Determination ”). As used herein, the term “ Conversion Shares ” shall include all shares of Common Stock issuable upon conversion of, or as dividends on, the Preferred Stock in accordance with the Certificate of Determination.

E. In exchange for all of the Holder’s shares of Series D Preferred Stock, the Company has authorized the issuance to the Holder of _____ shares of Preferred Stock.

F. In exchange for the Holder’s Series A Warrant, the Company has authorized the issuance to the Holder of a warrant, in the form attached hereto as Exhibit B (including all warrants issued in exchange therefor or replacement thereof, the “ Warrant ”), which Warrant shall initially be exercisable for __________ shares of Common Stock (as exercised, the “ Warrant Shares ”), in accordance with the terms thereof.

G. The Preferred Stock, the Conversion Shares, the Warrant and the Warrant Shares are collectively referred to herein as the “ Securities .”

H. The exchange of the Holder’s Series D Preferred Stock and Series A Warrant for the Preferred Stock and the Warrant will be made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “ 1933 Act ”).

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Holder hereby agree as follows:

1.	EXCHANGE OF SERIES D PREFERRED STOCK AND SERIES A WARRANT.

(a) Series D Preferred Stock and Series A Warrant . Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall, pursuant to Section 3(a)(9) of the 1933 Act, exchange (i) all of the Holder’s shares of Series D Preferred Stock for ____ shares of Preferred Stock and (ii) the Holder’s Series A Warrant for the Warrant.

(b) Closing . The closing (the “ Closing ”) of the exchange of the Holder’s Series D Preferred Stock and the Holder’s Series A Warrant shall occur at the offices of Greenberg Traurig, LLP, 77 W. Wacker Drive, Suite 3100, Chicago, Illinois 60601. The date and time of the Closing (the “ Closing Date ”) shall be 10:00 a.m., New York time, on the first (1 st ) Business Day on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such later date as is mutually agreed to by the Company and the Holder). As used herein “ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.

(c) Delivery . On the Closing Date, (i) the Holder shall deliver all of its shares of Series D Preferred Stock and its Series A Warrant to the Company and (ii) the Company shall exchange, issue and deliver to the Holder (A) _______ shares of Preferred Stock for such shares of Series D Preferred Stock and (B) the Warrant for such Series A Warrant, in all cases duly executed on behalf of the Company and registered in the name of the Holder.

2.	HOLDER’S REPRESENTATIONS AND WARRANTIES.

Holder represents and warrants to the Company that:

(a) Organization; Authority . The Holder is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Exchange Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

(b) Validity; Enforcement . This Agreement has been duly and validly authorized, executed and delivered on behalf of the Holder and constitutes the legal, valid and binding obligations of the Holder enforceable against the Holder in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(c) No Conflicts . The execution, delivery and performance by the Holder of this Agreement and the consummation by the Holder of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of the Holder or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Holder is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to the Holder, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Holder to perform its obligations hereunder.

(d) Residency . The Holder is a resident of that jurisdiction specified below its address on the Schedule of Buyers attached to the Purchase Agreement.

(e) Own Account . The Holder is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the 1933 Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the 1933 Act or any applicable state securities law, and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the 1933 Act or any applicable state securities law (this representation and warranty shall not limit the Holder’s right to sell the Securities in compliance with applicable federal and state securities laws); provided , however , that by making the representations herein, the Holder does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in compliance with applicable federal and state securities laws. The Holder is acquiring the Securities hereunder in the ordinary course of its business. The Holder shall notify the Company in writing of any transfers by the Holder of any of the Preferred Stock or the Warrant and such notification shall contain the name and address of the transferee.

(f) Experience of the Holder . The Holder, either alone or together with its advisors and representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective acquisition of the Securities, and has so evaluated the merits and risks of such acquisition. The Holder is able to bear the economic risk of an acquisition of the Securities and, at the present time, is able to afford a complete loss of such acquisition. The representations contained in this Section 2(f), however, shall not modify, amend or affect the Holder’s right to rely on the Company’s representations and warranties contained herein or any representations and warranties contained in any other Exchange Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby.

(g) Holder Status . At the time the Holder was offered the Securities, it met, and as of the date hereof it meets, the definition of “institutional investor,” “accredited investor” or other similar term forth on Exhibit 2(g) that is applicable to it based on the state in which the Holder is located. The Holder is not required to be registered as a broker-dealer under Section 15 of the 1934 Act.

(h) Ownership . The Holder does not as of the date hereof, and will not immediately following the Closing, own 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption that all Equivalents (as defined in the Purchase Agreement) owned by the Holder, whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) but taking into account any limitations on exercise or conversion (including “blockers”) contained therein).

3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to the Holder that:

(a) Organization and Qualification; Subsidiaries . Each of the Company and each of its “ Subsidiaries ” (which for purposes of this Agreement means any Person in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “ Material Adverse Effect ” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries, taken as a whole, (ii) the legality, validity or enforceability of the transactions contemplated hereby or in the other Exchange Documents or (iii) the authority or ability of the Company to perform any of its obligations under any of the Exchange Documents. Other than the Subsidiaries, there is no Person in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest. Except as set forth in Section 3(a) of the disclosure letter delivered by the Company to the Holder concurrently with the execution of this Agreement (the “ Disclosure Letter ”), the Company has no Subsidiaries.

(b) Authorization; Enforcement; Validity . The Company has the requisite power and authority to enter into and, except as set forth in Section 3(b) of the Disclosure Letter, perform its obligations under this Agreement and the other Exchange Documents and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the other Exchange Documents by the Company, and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Stock and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of, or as dividends on, the Preferred Stock, the issuance of the Warrant and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrant) have been duly authorized by the Company’s board of directors and no further filing, consent or authorization is required by the Company, its board of directors or its stockholders or other governing body or regulatory authority. This Agreement and the other Exchange Documents to which the Company is a party have been (or upon delivery will have been) duly executed and delivered by the Company and when delivered in accordance with the terms hereof and thereof, will constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “ Exchange Documents ” means, collectively, this Agreement, the Warrant, the Certificate of Determination, the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into by the parties hereto in connection with the transactions contemplated hereby and thereby. Except as set forth in Section 3(b) of the Disclosure Letter, the Company has no reason to believe that it will be unable to comply with any of its obligations under any of the Exchange Documents (including, without limitation, as a result of application of Section 500 or Section 501 of the California Corporations Code).

(c) Issuance of Securities . The issuance of the Preferred Stock and the Warrant is duly authorized and, when issued in accordance with the terms of the Exchange Documents, shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other encumbrances imposed by the Company. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 133% of the sum of (i) the maximum number of Conversion Shares issuable upon conversion of the Preferred Stock (assuming for purposes hereof that the Preferred Stock is convertible at the initial Conversion Price (as defined in the Certificate of Determination) and without taking into account any limitations on the conversion of the Preferred Stock set forth in the Certificate of Determination) and (ii) the maximum number of Warrant Shares issuable upon exercise of the Warrant (without regard to any limitations on the exercise of the Warrant set forth therein). Upon (i) conversion of the Preferred Stock in accordance with the Certificate of Determination, (ii) issuance as dividends on the Preferred Stock in accordance with the Certificate of Determination or (iii) exercise of the Warrant in accordance with the Warrant (as the case may be), the Conversion Shares and the Warrant Shares, as applicable, when issued, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances imposed by the Company, with the holders being entitled to all rights accorded to a holder of Common Stock. The offer, exchange and issuance of the Securities is exempt from registration under the 1933 Act pursuant to the exemption provided by Section 3(a)(9) thereof. Upon issuance in accordance with the terms of the Exchange Documents, the Securities will be freely tradable without restriction. Notwithstanding the preceding sentence, the Warrant Shares will be freely tradable without restriction so long as such Warrant Shares are exercised pursuant to a cashless exercise as provided in the Warrant.

(d) No Conflicts . Except as set forth in Section 3(d) of the Disclosure Letter, the execution, delivery and performance of the Exchange Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Stock, the Warrant, the Conversion Shares and Warrant Shares and the reservation for issuance of the Conversion Shares and Warrant Shares) will not (i) result in a violation of the Articles of Incorporation (as defined below) or other organizational documents of the Company or any of its Subsidiaries or Bylaws (as defined below) of the Company, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) subject to the making of the Required Filings (as defined below) by the Company, result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of the OTC Bulletin Board (the “Principal Market ”)) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.

(e) Consents . The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person (as defined below) (including, without limitation, the Financial Industry Regulatory Authority) in order for it to execute, deliver or perform any of its obligations under or contemplated by the Exchange Documents, in each case, in accordance with the terms hereof or thereof, other than (i) the filing with the SEC of the 8-K Filing (as defined below), (ii) such filings as are required to be made under applicable state securities laws (clauses (i) and (ii) are collectively referred to as the “ Required Filings ”) and (iii) as set forth in Section 3(e) of the Disclosure Letter. All consents, authorizations, orders, filings and registrations which the Company is required to obtain on or before the Closing Date pursuant to the preceding sentence have been obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company from obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. Required Filings to be made after the Closing Date shall be made in compliance with the terms of this Agreement and applicable federal and state securities laws. Except as set forth in Section 3(e) of the Disclosure Letter, the Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

(f) Acknowledgment Regarding Holder’s Exchange of Securities . The Company acknowledges and agrees that the Holder is acting solely in the capacity of an arm’s length purchaser with respect to the Exchange Documents and the transactions contemplated hereby and thereby and that the Holder is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”)). The Company further acknowledges that the Holder is not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Exchange Documents and the transactions contemplated hereby and thereby, and any advice given by the Holder or any of its representatives or agents in connection with the Exchange Documents and the transactions contemplated hereby and thereby is merely incidental to the Holder’s acquisition of the Securities. The Company further represents to the Holder that the Company’s decision to enter into the Exchange Documents has been based solely on the independent evaluation by the Company and its representatives.

(g) Placement Agent’s Fees . Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the transactions contemplated by this Agreement. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees or broker’s commissions owed to any Person pursuant to any other agreements entered into by the Company relating to or arising out of the transactions contemplated hereby. The Holder shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by the Holder pursuant to agreements entered into by the Holder, which fees or commissions shall be the sole responsibility of the Holder) made by or on behalf of other Persons for fees or the type contemplated in this Section that may be due in connection with the transactions contemplated by the Exchange Documents.

(h) No Integrated Offering . None of the Company, the Subsidiaries or any of their affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities (together with any other offering pursuant to the Other Exchange Agreements) to require approval of stockholders of the Company under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would cause the offering of any of the Securities to be integrated with other offerings.

(i) Dilutive Effect . The Company understands and acknowledges that the number of Conversion Shares and Warrant Shares will increase in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares upon conversion of the Preferred Stock and the Warrant Shares upon exercise of the Warrant in accordance with this Agreement, the Certificate of Determination and the Warrant is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company.

(j) Application of Takeover Protections; Rights Agreement . The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Articles of Incorporation or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or could become applicable to the Holder as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Holder’s ownership of the Securities. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.

(k) SEC Documents; Financial Statements . Except as set forth in Section 3(k) of the Disclosure Letter, during the two (2) years prior to the date hereof, the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being referred to herein as the “ SEC Documents ”). The Company has delivered to the Holder or its representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. Except as set forth in Section 3(k) of the Disclosure Letter, as of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except as set forth in Section 3(k) of the Disclosure Letter, as of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Except as set forth in Section 3(k) of the Disclosure Letter, such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate). No other information provided by or on behalf of the Company to the Holder which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which they are or were made.

(l) Absence of Certain Changes . Since the date of the Company’s most recent audited or reviewed financial statements contained in the Form 10-K, except as disclosed in subsequent SEC Documents filed prior to the date hereof, there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since the date of the Company’s most recent audited financial statements contained in the Form 10-K, except as disclosed in a subsequent SEC Documents filed prior to the date hereof, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends other than by Subsidiaries to the Company, (ii) sold any material assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any material capital expenditures, individually or in the aggregate. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Agreement, “ Insolvent ” means, on a consolidated basis, (i) the present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (ii) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (iii) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in business or in any transaction, and is not about to engage in business or in any transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital. For purposes of this Agreement: (x) “ Indebtedness ” of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with generally accepted accounting principles) other than trade payables entered into in the ordinary course of business, (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person that owns such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “ Contingent Obligation ” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) “ Person ” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity, a government or any department or agency thereof.

(m) No Undisclosed Events, Liabilities, Developments or Circumstances . No event, liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or their respective business, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which either (i) except as set forth in Section 3(m) of the Disclosure Letter, has not been publicly announced or contained in the SEC Documents or (ii) except as set forth in Section 3(m) of the Disclosure Letter, could reasonably result in a Material Adverse Effect or a material adverse effect on the Holder’s investment hereunder.

(n) Conduct of Business; Regulatory Permits . Except as set forth in Section 3(e) of the Disclosure Letter, neither the Company nor any of its Subsidiaries is in violation of any term of or in default under its Articles of Incorporation, any certificate of determination of any other outstanding series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, except as set forth in Section 3(n) of the Disclosure Letter, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. Except as set forth in Section 3(n) of the Disclosure Letter, since January 1, 2006, (i) the Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any written notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.

(o) Foreign Corrupt Practices . Neither the Company nor any of the Subsidiaries nor any director, officer, agent, employee or other Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

(p) Sarbanes-Oxley Act . Except as set forth in Section 3(p) of the Disclosure Letter, the Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof.

(q) Transactions With Affiliates . Except as set forth in the SEC Documents, none of the officers or directors of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers or directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer or director or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $120,000 other than for (i) payment of salary or bonuses for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company, and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company and restricted stock agreements under any restricted stock plan of the Company.

(r) Equity Capitalization . The capitalization of the Company as of the date hereof is as described in Section 3(r)(i) of the Disclosure Letter. No shares of Common Stock are held in treasury. All of such outstanding shares are duly authorized and have been, or upon issuance will be, validly issued and are fully paid and nonassessable. __________ shares of the Company’s issued and outstanding Common Stock on the date hereof are as of the date hereof owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates” without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of its Subsidiaries. To the Company’s knowledge, as of the date hereof no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock (calculated based on the assumption that all Equivalents, whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”) contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws). Except as disclosed in Section 3(r)(ii) of the Disclosure Letter: (i) none of the Company’s or any material Subsidiary’s capital stock is subject to preemptive rights or any other similar rights or any liens suffered or permitted by the Company or any Subsidiary; (ii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or any of its Subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any material amounts filed in connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except as contemplated by the Purchase Areement); (vi) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (ix) neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. The Company has furnished to the Holder true, correct and complete copies of the Company’s Articles of Incorporation, as amended and as in effect on the date hereof, including, without limitation, any certificates of determination contained therein or attached thereto (the “ Articles of Incorporation ”), and the Company’s bylaws, as amended and as in effect on the date hereof (the “ Bylaws ”).

(s) Indebtedness and Other Contracts . Except as disclosed in the SEC Documents or in Section 3(s) of the Disclosure Letter, neither the Company nor any of its Subsidiaries (i) has any outstanding Indebtedness, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) is in violation of any term of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect.

(t) Absence of Litigation . Except as disclosed in Section 3(t) of the Disclosure Letter, there is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’ officers or directors which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect. Except as disclosed in Section 3(t) of the Disclosure Letter, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company under the 1934 Act or the 1933 Act.

(u) Insurance . The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

(v) Employee Relations . Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. No executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(w) Title . The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case, free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

(x) Intellectual Property Rights . The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, original works, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and registrations therefor (“ Intellectual Property Rights ”) necessary to conduct their respective businesses as now conducted and as presently proposed to be conducted, unless failure to own or possess such rights or licenses would not reasonably be likely to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ Intellectual Property Rights have expired, terminated or been abandoned, or are expected to expire, terminate or be abandoned, within three years from the date of this Agreement, unless such expiration, termination or abandonment would not reasonably be likely to result in a Material Adverse Effect. The Company has no knowledge of any infringement by the Company or any of its Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of the Subsidiaries regarding their material Intellectual Property Rights. The Company is not aware of any facts or circumstances that reasonably could be expected to give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(y) Environmental Laws . The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The term “ Environmental Laws ” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “ Hazardous Materials ”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

(z) Subsidiary Rights . Except as disclosed in Section 3(z) of the Disclosure Letter, the Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

(aa) Tax Status . Except for matters that would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, the Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. To the Company’s knowledge and except as set forth in Section 3(aa) of the Disclosure Letter, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

(bb) Internal Accounting and Disclosure Controls . Except as set forth in the Company’s Form 10-K for the year ended December 31, 2007 and any of the Company’s Form 10-Q’s covering periods in 2008, the Company maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Except as set forth in the Company’s Form 10-K for the year ended December 31, 2007 and any of the Company’s Form 10-Qs covering periods in 2008, neither the Company nor any of its Subsidiaries has received any notice or correspondence from any accountant or other Person relating to any potential material weakness or significant deficiency in any part of the Company’s internal control over financial reporting.

(cc) Off Balance Sheet Arrangements . There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

(dd) Investment Company Status . The Company is not, and upon consummation of the issuance and exchange of the Securities will not be, an “investment company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.

(ee) Acknowledgement Regarding the Holder’s Trading Activity . It is understood and acknowledged by the Company (i) the Holder has not been asked by the Company or any of its Subsidiaries to agree, nor has the Holder agreed with the Company or any of its Subsidiaries, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that the Holder, and counter parties in “derivative” transactions to which the Holder is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iii) that the Holder shall not be deemed to have any affiliation with or control over any arm’s length counter party in any “derivative” transaction. The Company further understands and acknowledges that the Holder may engage in hedging and/or trading activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares or Conversion Shares, as applicable, deliverable with respect to the Securities are being determined and (b) such hedging and/or trading activities, if any, can reduce the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement or any other Exchange Document or any of the documents executed in connection herewith or therewith.

(ff) Manipulation of Price . Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries (other than the Placement Agent (as defined in the Purchase Agreement) in connection with the transactions contemplated by the Purchase Agreement).

(gg) U.S. Real Property Holding Corporation . Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the Securities are held by the Holder, shall become, a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company and each Subsidiary shall so certify upon the Holder’s request.

(hh) Transfer Taxes . On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance and exchange of the Securities to be issued to the Holder hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

(ii) Bank Holding Company Act . Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “ BHCA” ) and to regulation by the Board of Governors of the Federal Reserve System (the “ Federal Reserve” ). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any equity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

(jj) Disclosure . The Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning the Company or any of its Subsidiaries. The Company understands and confirms that the Holder will rely on the foregoing representations in effecting transactions in securities of the Company. All written materials provided to the Holder regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the Disclosure Letter and the Schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly announced or disclosed, other than the transactions contemplated hereby. The Company acknowledges and agrees that the Holder does not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

(kk) FDA . As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (the “ FDA ”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (the “ FDCA ”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “ Food Product ”), such Food Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company or such Subsidiary (as the case may be) in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any written notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Food Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Food Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company subject to the jurisdiction of the FDA have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

4.	COVENANTS.

(a) Commercially Reasonably Best Efforts . Each party shall use commercially reasonable best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6 and 7 of this Agreement.

(b) Securities Compliance . The Company shall take all necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Holder or subsequent holders. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for issuance to the Holder at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Holder on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date.

(c) Reporting Status . Until the date on which the Holder shall have sold all of the Securities (the “ Reporting Period ”), except as set forth in Section 4(c) of the Disclosure Letter, the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.

(d) Financial Information . The Company agrees to send the following to the Holder during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, and (ii) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, copies of any notices and other information made available or given to the shareholders of the Company generally, contemporaneously with the making available or giving thereof to the shareholders.

(e) Listing . The Company shall promptly secure the listing of all of the Conversion Shares and Warrant Shares issuable upon exercise of the Warrant upon each national securities exchange and automated quotation system, if any, upon which the shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain such listing of all such Securities from time to time issuable under the terms of the Exchange Documents on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s authorization for quotation on the Principal Market, the New York Stock Exchange, the Nasdaq Global Market, the Nasdaq Global Select Market or the “pink sheets” over-the-counter market. (each, an “ Eligible Market ”). The Company shall not take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(e).

(f) Fees . The Company shall reimburse the Holder or its designee(s) for all costs and expenses incurred by it or its affiliates in connection with the transactions contemplated by the Exchange Documents (including, without limitation, all legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by the Exchange Documents and due diligence in connection therewith), which amount shall be paid by the Company by wire transfer of immediately available funds at the Closing or paid by the Company on demand by the Holder upon termination of this Agreement so long as such termination did not occur as a result of a material breach by the Holder of any of its obligations hereunder (as the case may be). The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions (other than for Persons engaged by the Holder) relating to or arising out of the transactions contemplated hereby incurred by the Company. The Company shall pay, and hold the Holder harmless against, any liability, loss or expense (including, without limitation, attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.

(g) Pledge of Securities . The Company acknowledges and agrees that the Securities may be pledged by the Holder in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. If the Holder effects a pledge of Securities, the Holder shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or any other Exchange Document. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by the Holder. Notwithstanding the foregoing, if the Securities so pledged are Preferred Stock or the Warrant, and such Securities are subsequently acquired by the pledgee upon default, then the Holder will provide the Company with written notice of the transfer and the names of the record holders of such Securities within a reasonable amount of time after such Securities are transferred. Additionally, the transferee shall agree to be bound by the provisions of the Exchange Documents if the transferee will obtain any rights under the Exchange Documents.

(h) Disclosure of Transactions and Other Material Information . On or before 8:30 a.m., New York time, on the first (1 st ) Business Day following the date of this Agreement, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the Exchange Documents in the form required by the 1934 Act and attaching this Agreement, the Certificate of Determination and the form of the Warrant (including all attachments, the “ 8-K Filing ”). The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide the Holder with any material, nonpublic information regarding the Company or any of its Subsidiaries without the express prior written consent of the Holder, except as expressly contemplated by Section 4(n)(viii) of the Purchase Agreement. If the Holder has, or believes it has, received any material, nonpublic information regarding the Company or any of its Subsidiaries in breach of the immediately preceding sentence, the Holder shall provide the Company with written notice thereof in which case the Company shall, within one (1) Trading Day of the receipt of such notice, make a public disclosure of all such material, nonpublic information so provided. In the event of a breach of any of the foregoing covenants by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of the Holder), in addition to any other remedy provided herein or in the Exchange Documents, the Holder shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees or agents. The Holder shall not have any liability to the Company, any of the Subsidiaries, or any of its or their respective officers, directors, employees, stockholders or agents, for any such disclosure of such information. Subject to the foregoing, neither the Company, its Subsidiaries nor the Holder shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided , however , that the Company shall be entitled, without the prior approval of the Holder, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) the Holder shall be consulted by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written consent of the Holder, the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of the Holder in any filing (other than the 8-K Filing), announcement, release or otherwise, except (a) as required by federal securities law in connection with the filing of final Exchange Documents (including signature pages thereto) with the SEC and (b) to the extent such disclosure is required by law or Principal Market regulations, in which case the Company shall provide the Holder with prior notice of such disclosure permitted hereunder.

(i) Reservation of Shares . So long as any shares of Preferred Stock or any portion of the Warrant remain outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 133% of (i) the maximum number of shares of Common Stock issuable upon conversion of all the Preferred Stock (assuming for purposes hereof, that the Preferred Stock is convertible at the Conversion Price (as defined in the Certificate of Determination) and without regard to any limitations on the conversion of the Preferred Stock set forth in the Certificate of Determination) and (ii) the maximum number of shares of Common Stock issuable upon exercise of all of the Warrant (without regard to any limitations on the exercise of the Warrant set forth therein).

(j) Conduct of Business . The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate, in a Material Adverse Effect.

(k) Variable Rate Transaction . Until all of the shares of Preferred Stock have been converted or redeemed in accordance with the terms of the Certificate of Determination, the Company and each Subsidiary shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement (as defined in the Purchase Agreement) involving a Variable Rate Transaction. The term “ Variable Rate Transaction ” shall mean a transaction in which the Company or any Subsidiary (i) issues or sells any Equivalents either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Equivalents, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such Equivalents or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock, other than pursuant to a customary price-based anti-dilution provision or (ii) enters into any agreement (including, but not limited to, an equity line of credit) whereby the Company or any material Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive” or “participation” rights, or in transaction where the price of the securities is determined at the time of closing of such transaction and such closing is subject to customary closing conditions such as shareholder approval). The Holder shall be entitled to obtain injunctive relief against the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

(l) Passive Foreign Investment Company . The Company shall conduct its business in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as amended.

(m) Restriction on Redemption and Cash Dividends . So long as any shares of Preferred Stock are outstanding, the Company shall not, directly or indirectly, redeem, or declare or pay any cash dividend or distribution on, the Common Stock without the prior express written consent of the Required Holders (as defined in the Certificate of Determination).

(n) Amendment of Purchase Agreement . From and after the Closing:

(i) The second sentence of Section 4(j) of the Purchase Agreement is hereby replaced with the following:

“Notwithstanding the foregoing, this Section 4(j) shall not apply in respect of the issuance of (A) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers, employees or consultants of the Company in connection with their service as directors or officers of the Company, their employment by the Company or their retention as consultants by the Company pursuant to an equity compensation program or other contract or arrangement approved by the board of directors of the Company (or the compensation committee of the board of directors of the Company), provided that all such issuances of shares of Common Stock (including, shares of Common Stock issuable upon exercise of such standard options) after the date hereof pursuant to this clause (A) that are not described in clause (B) below do not, in the aggregate, exceed more than 5% of the Common Stock issued and outstanding immediately prior to the date hereof (as adjusted for any stock dividend, stock split, stock combination or other similar transaction) (excluding, for purposes of the foregoing 5% calculation, shares of Common Stock issuable upon exercise of such standard options issued after the date hereof that have been terminated or forfeited), provided further that all such issuances must be for consideration per share or have an exercise price (as the case may be) (as determined pursuant to the provisions of Section 3(f)(i) of the warrants issued in exchange for the Series A Warrants) greater than or equal to the fair market value of the Common Stock on the date of such issuance; (B) shares of Common Stock issued upon the conversion or exercise of Equivalents issued prior to the date hereof, provided that such Equivalents have not been amended since the date hereof to increase the number of shares issuable thereunder or to lower the exercise or conversion price thereof or otherwise materially change the terms or conditions thereof in any manner that adversely affects any of the Buyers (it being understood that the adjustment of the exercise or conversion price thereof pursuant to anti-dilution provisions contained therein as of the date of this Agreement that are triggered by the transactions contemplated hereby shall not be deemed to be an amendment; any such adjustments, however, shall be described in Section 3(r)(ii) of the Disclosure Letter); (C) the shares of Common Stock issuable upon conversion of the shares of Series E Convertible Preferred Stock of the Company (the “ Series E Preferred Stock ”); (D) the shares of Common Stock issuable upon exercise of the warrants issued in exchange for the Series A Warrants; (E) shares of Common Stock issued or issuable as a dividend on the Series E Preferred Stock; (F) up to 545,455 shares of Common Stock issuable pursuant to warrants issued to the Placement Agent in connection with the transactions contemplated by this Agreement; (G) shares of Common Stock issued by the Company solely as a penalty pursuant to the registration rights agreements entered into by the Company in connection with the Company’s September 28, 2005, May 12, 2006 and February 15, 2007 private placement transactions; or (H) shares of Common Stock issued in connection with strategic transactions or acquisitions (the primary purpose of which is not to raise capital, and which are approved in good faith by the board of directors of the Company), provided that (i) any such issuance after the date hereof pursuant to this clause (H) shall only be to a Person that is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company; (ii) all such issuances after the date hereof pursuant to this clause (H) do not, in the aggregate, exceed more than 10% of the shares of Common Stock issued and outstanding immediately prior to the date hereof (as adjusted for any stock dividend, stock split, stock combination or other similar transaction) and (iii) all such issuances after the date hereof pursuant to this clause (H) must have a price per share (as determined pursuant to the provisions of Section 3(f)(i) of the warrants issued in exchange for the Series A Warrants) greater than or equal to the fair market value of the Common Stock on the date of such issuance (each of the foregoing in clauses (A) through (H), collectively the “ Excluded Securities ”).”

(ii) The last sentence of Section 4(j) of the Purchase Agreement is hereby deleted.

(iii) The first sentence of Section 4(n) of the Purchase Agreement is hereby replaced with the following:

“Until all of the shares of Series E Preferred Stock have been converted or redeemed in accordance with the terms of the Certificate of Determination, Preferences and Rights of Series E Convertible Preferred Stock, neither the Company nor any of its Subsidiaries shall, directly or indirectly, effect any Subsequent Placement or any issuance of debt (excluding bona fide third-party commercial bank debt) (such issuance of debt, a “ Debt Placement ”) unless the Company shall have first complied with this Section 4(n).”

(iv) Except as otherwise expressly provided herein, (i) the Purchase Agreement and each other Transaction Document (as defined in the Purchase Agreement) is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects, except that on and after the Closing Date (A) all references in the Purchase Agreement to the “Purchase Agreement,” “hereto,” “hereof,” “this Agreement,” “hereunder” or words of like import referring to the Purchase Agreement shall mean the Purchase Agreement as amended by this Agreement and the Other Exchange Agreements, and (B) all references in the other Transaction Documents to the “Purchase Agreement,” “thereto,” “thereof,” “thereunder” or words of like import referring to the Purchase Agreement shall mean the Purchase Agreement as amended by this Agreement and the Other Exchange Agreements, and (ii) the execution, delivery and effectiveness of this Agreement shall not operate as an amendment of any right, power or remedy of the Holder under any Transaction Document, nor constitute an amendment of any provision of any Transaction Document and all of them shall continue in full force and effect, as amended or modified by this Agreement and the Other Exchange Agreements.

(o) Issuance of Preferred Stock and Other Warrants . Effective simultaneously with the Closing, the Holder hereby consents, under Sections 4(m) and 4(n) of the Purchase Agreement and Sections 13 and 15 of the Certificate of Determination, Preferences and Rights of Series D Convertible Preferred Stock, to the issuance to the Other Series D Holders under the Other Exchange Agreements of an aggregate to all of them of (i) _______ shares of Preferred Stock in exchange for all of their shares of Series D Preferred Stock and (ii) warrants to purchase up to _________ shares of Common Stock in exchange for all of their Other Series A Warrants.

(q) Miscellaneous Definitions . For purposes of this Agreement, (1) “ Other Series D Holders ” means, collectively, the holders (other than the Holder) of one or more shares of Series D Preferred Stock; (2) “ Other Exchange Agreements ” means, collectively, the separate exchange agreements, each dated as of May ___, 2009, entered into between the Company and each of the Other Series D Holders; (3) “ Other Warrants ” means, collectively, the warrants issued pursuant to the Other Exchange Agreements; (4) “ Other Series A Warrants ” means, collectively, all the Series A Warrants issued pursuant to the Purchase Agreement (other than to the Holder); and (5) “ Other Exchange Documents ” means, collectively, the Other Exchange Agreements, the Other Warrants and all other agreements, documents and instruments executed and delivered in connection with the transactions contemplated thereby.

5.	REGISTER; TRANSFER AGENT INSTRUCTIONS; NO LEGENDS.

(a) Register . The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Preferred Stock and the Warrant in which the Company shall record the name and address of the Person in whose name the Preferred Stock and the Warrant have been issued (including the name and address of each transferee), the number of shares of Preferred Stock held by such Person, the number of Conversion Shares issuable upon conversion of the Preferred Stock and the number of Warrant Shares issuable upon exercise of the Warrant held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of the Holder or its legal representatives.

(b) Transfer Agent Instructions . The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent in the form acceptable to the Holder (the “ Irrevocable Transfer Agent Instructions ”) to issue certificates (free of any restrictive or other legends) or credit shares to the applicable balance accounts at The Depository Trust Company (“ DTC ”), registered in the name of the Holder or its respective nominee(s), for the Conversion Shares and the Warrant Shares issuable upon exercise of the Warrant in such amounts as specified from time to time by the Holder to the Company upon conversion of the Preferred Stock, issuance of Common Stock as dividends on the Preferred Stock or the exercise of the Warrant (as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b) will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall be freely transferable on the books and records of the Company. If the Holder effects a sale, assignment or transfer of the Securities, the Company shall permit the transfer and shall promptly instruct its transfer agent to issue one or more certificates (free of any restrictive or other legends) or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by the Holder to effect such sale, transfer or assignment. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that the Holder shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent on the Closing Date and such other legal opinions as the transfer agent may require from time to time in order to ensure that the Securities are issued free of any restrictive or other legends. Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinions shall be borne by the Company.

(c) Legends . The certificates or other instruments representing the Securities shall not bear any restrictive or other legends, except as otherwise expressly contemplated in the Warrant.

6.	CONDITIONS TO THE COMPANY’S OBLIGATION TO EXCHANGE AND ISSUE.

(a) The obligation of the Company hereunder to exchange and issue the Preferred Stock and the Warrant to the Holder at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in their sole discretion by providing the Holder with prior written notice thereof:

(i) The Holder shall have executed each of the Exchange Documents to which it is a party and delivered the same to the Company.

(ii) The Holder shall have delivered to the Company all of its shares of Series D Preferred Stock and its Series A Warrant.

(iii) Each and every representation and warranty of the Holder shall be true and correct as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date), and the Holder shall have performed, satisfied and complied with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Holder at or prior to the Closing Date.

7.	CONDITIONS TO THE HOLDER’S OBLIGATION TO EXCHANGE.

(a) The obligation of the Holder hereunder to exchange its shares of Series D Preferred Stock and its Series A Warrant at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Holder’s sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

(i) The Company shall have duly executed and delivered to the Holder each of the Exchange Documents and the Company shall have duly executed and delivered to the Holder a certificate representing __________ shares of Preferred Stock and the Warrant.

(ii) The Holder shall have received the opinion of (i) Weintraub Genshlea Chediak Law Corporation, the Company’s counsel and (ii) Hogan & Hartson, LLP, the Company’s special counsel, each dated as of the Closing Date, each in the form reasonably acceptable to the Holder.

(iii) The Company shall have delivered to the Holder a copy of the Irrevocable Transfer Agent Instructions, in form acceptable to the Holder, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.

(iv) The Company shall have delivered to the Holder a certificate evidencing the formation and good standing of the Company issued by the Secretary of State (or comparable office) of the Company’s jurisdiction of formation as of a date within ten (10) days of the Closing Date.

(v) The Company shall have delivered to the Holder a certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company is so qualified, as of a date within ten (10) days of the Closing Date.

(vi) The Company shall have delivered to the Holder a certified copy of the Articles of Incorporation as certified by the California Secretary of State within ten (10) days of the Closing Date.

(vii) The Company shall have delivered to the Holder a certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s board of directors in a form reasonably acceptable to the Holder, (ii) the Articles of Incorporation, and (iii) the Bylaws, each as in effect at the Closing, and (iv) the number of shares of Common Stock outstanding on the day immediately preceding the Closing Date, each in the form acceptable to the Holder.

(viii) Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date), and the Company shall have performed, satisfied and complied with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Holder shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Holder in the form acceptable to the Holder.

(ix) The Common Stock (I) shall be designated for quotation or listed on at least one Eligible Market and (II) shall not have been suspended, as of the Closing Date, by the SEC or such Eligible Market from trading on such Eligible Market nor, except as set forth in Section 7(a)(ix) of the Disclosure Letter, shall suspension by the SEC or such Eligible Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or such Eligible Market or (B) by falling below the minimum maintenance requirements of such Eligible Market.

(x) The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the issuance of the Securities, including, without limitation, those required by the Principal Market.

(xi) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Exchange Documents.

(xii) Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result in a Material Adverse Effect.

(xiii) The Company shall have obtained approval of the Principal Market to list the Conversion Shares and the Warrant Shares issuable upon exercise of the Warrant to the extent such approval is required by the Principal Market.

(xiv) All Other Series D Holders shall have (i) executed the Other Exchange Agreements, (ii) satisfied or waived all conditions to the closings contemplated by such agreements and (iii) surrendered all their shares of Series D Preferred Stock and all their Other Series A Warrants being exchanged by it pursuant thereto.

8.	TERMINATION.

In the event that the Closing shall not have occurred on or before ten (10) days from the date hereof due to the Company’s or the Holder’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and a non-breaching party’s failure to waive such unsatisfied condition(s)), any such non-breaching party at any time shall have the right to terminate its obligations under this Agreement with respect to such breaching party on or after the close of business on such date without liability of such non-breaching party to any other party; provided , however , notwithstanding any such termination the Company shall remain obligated to reimburse the Holder for the expenses described in Section 4(f) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Exchange Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Exchange Documents.

9.	MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, 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 suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement 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 HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

(b) Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

(c) Headings; Gender . The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “ including ,” “ includes ,” “ include ” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “ herein ,” “ hereunder ,” “ hereof ” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

(d) Severability . If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

(e) Entire Agreement; Amendments . This Agreement, the other Exchange Documents and the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Holder, the Company, their affiliates and Persons acting on their behalf with respect to the matters contained herein and therein (provided that, except as expressly contemplated elsewhere in this Agreement, the foregoing shall not have any effect on any agreements the Holder has entered into with the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment made by the Holder in the Company, including, without limitation, the Purchase Agreement), and this Agreement, the other Exchange Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Holder makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended or waived other than by an instrument in writing signed by the Company and the Holder, provided that any party may give a waiver in writing as to itself. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Other Exchange Documents unless the same consideration also is offered to the Holder. The Company has not, directly or indirectly, made any agreements with any other Person relating to the terms or conditions of the transactions contemplated by the Other Exchange Documents which differs in any respect from the terms and conditions set forth in the Exchange Documents. Without limiting the foregoing, the Company confirms that the Holder has not made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise.

(f) Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

NutraCea

5090 N. 40th Street , Suite 400

Phoenix, AZ 85018

Telephone: (602) 522-3000

Facsimile: (602) 522-3001

Attention: Chief Executive Officer

With a copy (for informational purposes only) to:

Weintraub Genshlea Chediak Law Corporation

400 Capitol Mall

Sacramento, CA 95814

Telephone: (916) 558-6164

Facsimile: (916) 446-1611

Attention: Christopher Chediak, Esq.

Michael DeAngelis, Esq.

If to the Transfer Agent:

American Stock Transfer & Trust

59 Maiden Lane, Plaza Level - Lobby

New York, NY 10038

Telephone: 718 921 8143

Facsimile: 718-921-8116

Attention: Joe Wolf, Vice President

If to the Holder, to its address and facsimile number set forth on the Schedule of Buyers attached to the Purchase Agreement, with copies (for informational purposes only) to:

Greenberg Traurig, LLP

77 W. Wacker Drive, Suite 3100

Chicago, Illinois 60601

Telephone: (312) 456-8400

Facsimile: (312) 456-8435

Attention: Peter H. Lieberman, Esq.

Todd A. Mazur, Esq.

or to such other address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party ten (10) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.

(g) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of any of the Securities. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the holders of all of the aggregate number of shares of Common Stock (or securities issued in exchange for Common Stock) issued and issuable under the Exchange Documents, including, without limitation, by way of a Fundamental Transaction (as defined in the Certificate of Determination) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Certificate of Determination and the Warrant). The Holder may assign some or all of its rights hereunder in connection with a transfer of any of its Securities without the consent of the Company, provided the Company receives written notice of the rights assigned and the name of such assignee within a reasonable amount of time after such assignment and such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Exchange Documents that apply to the “Holder.” After such assignment, the assignee shall be deemed to be a Holder hereunder with respect to such assigned rights.

(h) No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in Section 9(k).

(i) Survival . The representations, warranties, agreements and covenants shall survive the Closing; provided that the survival period for the representations and warranties of the Company shall continue only for forty-eight (48) months following the Closing Date.

(j) Further Assurances . Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(k) Indemnification .

(i) In consideration of the Holder’s execution and delivery of the Exchange Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Exchange Documents, the Company shall defend, protect, indemnify and hold harmless the Holder and each holder of any Securities and all of their stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “ Indemnitees ”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Indemnified Liabilities ”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in any of the Exchange Documents, (b) any breach of any covenant, agreement or obligation of the Company contained in any of the Exchange Documents or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of any of the Exchange Documents, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with any proceeds of the exercise of any of the Securities, (iii) any disclosure properly made by the Holder pursuant to Section 4(h), or (iv) the status of the Holder or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by the Exchange Documents, except, with respect to clause (c), to the extent such Indemnified Liability arises solely from an Indemnitee’s gross negligence or willful misconduct. The Company shall reimburse the Indemnitees, promptly as such expenses are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Indemnified Liabilities. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

(ii) Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (i) the Company has agreed in writing to pay such fees and expenses; (ii) the Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (iii) the named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case of clause (iii) above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnitee. The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 9(k), except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.

(iii) The indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or Indemnified Liabilities are incurred.

(iv) The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.

(l) Construction . The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. For clarification purposes, the Recitals are part of this Agreement and are hereby incorporated by reference.

(m) Remedies . The Holder and each holder of any Securities shall have all rights and remedies set forth in the Exchange Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Exchange Documents, any remedy at law may prove to be inadequate relief to the Holder. The Company therefore agrees that the Holder shall be entitled to seek specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security.

(n) Withdrawal Right . Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Exchange Documents, whenever the Holder exercises a right, election, demand or option under an Exchange Document and the Company does not timely perform its related obligations within the periods therein provided, then the Holder may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights

(o) Payment Set Aside . To the extent that the Company makes a payment or payments to the Holder hereunder or pursuant to any of the other Exchange Documents or the Holder enforces or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then, to the extent of any such restoration, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

(p) Independent Nature of the Holder’s Obligations and Rights . The obligations of the Holder under the Exchange Documents are several and not joint with the obligations of any Other Series D Holder under the Other Exchange Documents, and the Holder shall not be responsible in any way for the performance of the obligations of any Other Series D Holder under any Other Exchange Documents. Nothing contained herein or in any other Exchange Document, and no action taken by the Holder pursuant hereto or any Other Series D Holder pursuant to any Other Exchange Documents, shall be deemed to constitute the Holder or any Other Series D Holder as, and the Company acknowledges that the Holder and the Other Series D Holders do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holder and any Other Series D Holder are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by the Exchange Documents, the Other Exchange Documents or any matters, and the Company acknowledges that the Holder and the Other Series D Holders are not acting in concert or as a group or entity, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Exchange Documents and the Other Exchange Documents. The decision of the Holder to acquire the Securities pursuant to the Exchange Documents has been made by the Holder independently of any Other Series D Holder. The Holder acknowledges that no Other Series D Holder has acted as agent for the Holder in connection with the Holder making its acquisition hereunder and that no Other Series D Holder will be acting as agent of the Holder in connection with monitoring the Holder’s Securities or enforcing its rights under the Exchange Documents. The Company and the Holder confirms that the Holder has independently participated with the Company in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. The Holder shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any of the other Exchange Documents, and it shall not be necessary for any Other Series D Holder to be joined as an additional party in any proceeding for such purpose. To the extent that any of the Other Series D Holders and the Company enter into the same or similar documents, all such matters are solely in the control of the Company, not the action or decision of the Holder, and would be solely for the convenience of the Company and not because it was required or requested to do so by the Holder or any Other Series D Holder. For clarification purposes only and without implication that the contrary would otherwise be true, the transactions contemplated by the Exchange Documents include only the transaction between the Company and the Holder and do not include any other transaction between the Company and any Other Series D Holder.

(q) Most Favored Nation . The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date hereof that none of the terms offered to any Person with respect to any amendment, settlement or waiver (each a “ Settlement Document ”) relating to the terms, conditions and transactions contemplated by any Exchange Document or any Other Exchange Document, is or will be more favorable to such Person than those of the Holder and this Agreement and the other Exchange Documents shall be, at the election of the Holder, without any further action by the Holder or the Company, deemed amended and modified in an economically and legally equivalent manner such that the Holder shall receive the benefit of the more favorable terms contained in such Settlement Document. Notwithstanding the foregoing, the Company agrees, at its expense, to take such other actions (such as entering into amendments to the Exchange Documents and the Transaction Documents) as the Holder may reasonably request to further effectuate the foregoing.

[ signature pages follow ]

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

COMPANY:

NUTRACEA

By:
	Name: Olga Hernandez-Longan Title: Chief Financial Officer

IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.

	HOLDER:

EXHIBITS

Exhibit A Form of Certificate of Determination

Exhibit B Form of Warrant

California	0-32565	87-0673375
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

5090 N. 40th Street, Suite 400 Phoenix, AZ	85018
(Address of Principal Executive Offices)	(Zip Code)

Exhibit
No.		Description

3.1		Certificate of Determination, Preferences and Rights of the Series E Convertible Preferred Stock of NutraCea

4.1		Form of Warrant.

10.1		Form of Exchange Agreement, dated as of May 7, 2009, by and between NutraCea and the investor signatory thereto.

	NUTRACEA

Date: May 8, 2009	By:	/s/ Olga Hernandez-Longan
		Olga Hernandez-Longan
		Chief Executive Officer
		(Duly Authorized Officer)