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Term Sheet

for Exchange of Series D Convertible Preferred Stock

March 29, 2009

 

Issuer:

NutraCea (the “Company”)

 

 

Holder:

Cranshire Capital, L.P. (“Holder”)

 

 

Exchange:

Holder   will   exchange all of its Series D Convertible   Preferred Stock (“Series D Preferred Stock”) in a valid 3(a)(9) exchange for a newly created series of preferred stock of the Company that is senior to all other series of preferred stock of the Company and which will have terms substantially similar to those of the Series D Preferred Stock, except as follows:

 

 

 

(i)  Conversion price will be $0.30;

 

 

 

(ii)  Maturity date will be 3 months from issuance date;

 

 

 

(iii) The new series of preferred stock will be redeemed by the Company over 3 months in 3 equal monthly installments (each a “Redemption”) commencing with the one month anniversary of the initial issuance date thereof; and

 

 

 

(iv)  At the Company’s option, each Redemption may effected using cash or freely tradable shares of the Company’s common stock, provided that if the Company elects to effect any Redemption using common stock, such stock will be valued at a 10% discount to the average of the daily volume weight


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