Exhibit 10.1

 

 

 

 

LOAN AGREEMENT

 

 

Among

 

 

CF EQUIPMENT LOANS, LLC,

 

as Lender and as Collateral Agent,

 

 

and

 

 

APIO, INC.

 

and

 

APIO COOLING A CALIFORNIA LIMITED PARTNERSHIP,

 

as Borrowers

 

Dated as of February 26, 2016

 

 

 

 

 
 

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TABLE OF CONTENTS

 

 

 

 Page

 

 

 

 

ARTICLE I

IDEFINITIONS AND EXHIBITS

 

 

 

 

Section 1.01. 

Definitions 

 1

 

 

 

Section 1.02.

Exhibits

 6

 

 

 

Section 1.03.

Rules of Construction 

 7

 

 

 

 

ARTICLE II

TERMS OF LOAN

 

 

 

 

Section 2.01.

Loan

 7

 

 

 

Section 2.02. 

Interest  

 7

 

 

 

Section 2.03. 

Payments 

 7

 

 

 

Section 2.04. 

Payment on Non-Business Days  

 7

      Section 2.05.   Loan Payments To Be Unconditional 8       Section 2.06. 
Prepayments 8       Section 2.07. Joint and Several Liability  8       Section
2.08. Security 10         ARTICLE III
CONDITIONS PRECEDENT         Section 3.01.  Conditions of Closing  10      
Section 3.02. Conditions of Disbursement of Security Deposit 12         ARTICLE
IV         REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWERS 13        
ARTICLE V
TITLE TO COLLATERAL; SECURITY INTEREST         Section 5.01.  Title to
Collateral 16       Section 5.02. Security Interest in Collateral 16      
Section 5.03 Change in Name or Corporate Structure of either Borrower; Change in
Location of either Borrower’s Chief Executive Office or Principal Executive
Office 16       Section 5.04.  Liens 16       Section 5.05. Assignment of
Insurance 17       Section 5.06.  Collateral Agent   17

  

 
 

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  ARTICLE VI
AFFIRMATIVE COVENANTS OF BORROWERS         Section 6.01. Reporting Requirements
17       Section 6.02. Books and Records; Inspection and Examination 19      
Section 6.03.  Compliance With Laws 19       Section 6.04. Environmental
Compliance  19       Section 6.05. Payment of Taxes and Other Claims 20      
Section 6.06.  Preservation and Maintenance of Collateral  20       Section
6.07. Insurance 21       Section 6.08.  Preservation of Existence 23      
Section 6.09. Performance by Lender 23         ARTICLE VII
NEGATIVE COVENANTS OF BORROWERS         Section 7.01. Sale of Assets 24      
Section 7.02.  Consolidation and Merger 24       Section 7.03. Accounting 24    
  Section 7.04.  Modifications and Substitutions 24       Section 7.05.   Use of
Property 24         ARTICLE VIII
DAMAGE AND DESTRUCTION; CONDEMNATION         Section 8.01. Damage and
Destruction  25       Section 8.02. Condemnation 25         ARTICLE IX
ASSIGNMENT, SUBLEASING AND SELLING         Section 9.01. Assignment by Lender 26
      Section 9.02. No Sale or Assignment by Borrowers 26         ARTICLE X
EVENTS OF DEFAULT AND REMEDIES         Section 10.01. Events of Default 26      
Section 10.02.  Remedies on Default  28       Section 10.03.  No Remedy
Exclusive  29       Section 10.04.  Late Charge; Default Interest 29

 

 
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  ARTICLE XI
MISCELLANEOUS         Section 11.01.  Costs and Expenses of Lender and
Collateral Agent 30       Section 11.02. Disclaimer of Warranties 30      
Section 11.03. Notices 30       Section 11.04.  Further Assurance and Corrective
Instruments 30       Section 11.05. Binding Effect; Time of the Essence 31      
Section 11.06.   Severability  31       Section 11.07.  Amendments 31      
Section 11.08. Execution in Counterparts  31       Section 11.09.   Applicable
Law 31       Section 11.10.  Captions 31       Section 11.11.  Entire Agreement
31       Section 11.12.  Usury 31       Section 11.13.  Limitations of
Liability  31       Section 11.14. Waiver of Jury Trial 32       Exhibit A-1 –
Schedule of Principal Portions of Loan Payments (Real Estate Note)   Exhibit A-2
– Schedule of Principal Portions of Loan Payments (Equipment Note)   Exhibit B –
List of Equipment Collateral   Exhibit C – Form of Certificate of Chief
Financial Officer   Exhibit D – Pay Proceeds Schedule  

 

 
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LOAN AGREEMENT

 

THIS LOAN AGREEMENT dated as of February 26, 2016 (this “Agreement”) between CF
Equipment Loans, LLC, a Delaware limited liability company (“CF”), as lender
(with its successors and assigns, “Lender”) and as collateral agent for the
benefit of itself and Lender (together with its successors and assigns,
“Collateral Agent”), and Apio, Inc., a Delaware corporation (“Apio”), and Apio
Cooling A California Limited Partnership, a California limited partnership
(“Apio Cooling”; Apio and Apio Cooling may be referred to herein individually as
“Borrower” and collectively as “Borrowers”).

 

WHEREAS, Borrowers propose to borrow from Lender the proceeds of the Loan
(defined below) upon the terms and conditions set forth herein; and

 

WHEREAS, Lender is willing to make such Loan to Borrowers upon the terms and
conditions set forth herein;

 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the premises contained in this Agreement,
Lender, Collateral Agent and Borrowers agree as follows:

 

ARTICLE I

DEFINITIONS AND EXHIBITS

 

Section 1.01. Definitions. The following terms used herein will have the
meanings indicated below unless the context clearly requires otherwise:

 

“Agreement” means this Agreement, including all exhibits hereto, as any of the
same may be supplemented or amended from time to time in accordance with the
terms hereof.

 

“Borrower Documents” means, collectively, this Agreement, the Promissory Notes,
the Mortgages, the Environmental Indemnity Agreement, the Security Deposit
Account Agreement and any other agreements, documents or certificates executed
by either Borrower in connection with the Loan contemplated by this Agreement.

 

“Business Day” means and includes any calendar day other than a day on which all
commercial banks in the City of New York, New York are required or authorized to
be closed.

 

“Cal Ex” means Cal Ex Trading Company, a Delaware corporation.

 

“Closing Date” means February 26, 2016.

 

“Collateral” means (a) the Real Estate Collateral and (b) the Equipment
Collateral.

 

“Collateral Agent Documents” means this Agreement and the Mortgages and any
other document or agreement that is executed in connection with transactions
contemplated hereby and to which Collateral Agent is a party.

 

 
 

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“Contested Taxes” means any tax, assessment, charge or claim whose amount,
applicability or validity is diligently being contested in good faith by
appropriate proceedings; provided, however, if the failure to pay such Contested
Taxes results in a Lien on the Real Estate Collateral, (a) Borrowers shall
obtain title insurance endorsements and bonds or other security in a manner
acceptable to Collateral Agent in its reasonable but sole discretion, and (b)
Borrowers must demonstrate to Collateral Agent’s reasonable satisfaction that
the proceedings will conclusively operate to prevent the sale of any Real Estate
Collateral in order to satisfy the Lien prior to the final determination of such
proceedings.

 

“Credit Party” means, individually, each Borrower and Guarantor, and “Credit
Parties” means, collectively, each and every Credit Party.

 

“Damaged Collateral” means any portion of the Collateral that is lost, stolen,
destroyed or damaged beyond repair.

 

“Damaged Collateral Amount” means, (a) with respect to the Real Estate
Collateral, an amount equal to the product of (i) the then current Prepayment
Amount and (ii) a percentage equal to the original appraised value of the
Damaged Collateral divided by the original appraised value of all of the Real
Estate Collateral, and (b) with respect to the Equipment Collateral, an amount
equal to the product of (i) the then current Prepayment Amount and (ii) a
percentage equal to the original cost of the Damaged Collateral divided by the
original cost of all of the Equipment Collateral.

 

“Default” means an event that, with giving of notice or passage of time or both,
would constitute an Event of Default as provided in Article X hereof.

 

“Effective Period” means, (a) with respect to the first period, the period
beginning on the Closing Date and continuing through the earlier of (i) the date
that the first Loan Payment (or part thereof) is received by Lender and (ii) the
first Payment Date, and, (b) with respect to each subsequent period, the period
beginning on the day after the last day of the immediately preceding Effective
Period and shall continue through the earlier of (i) the date that the next
scheduled Loan Payment (or part thereof) is received by Lender and (ii) the next
Payment Date after the beginning of the current Effective Period.

 

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement
dated as of even date herewith executed by Borrowers and Guarantor for the
benefit of Lender and Collateral Agent, as hereafter modified, amended or
restated from time to time.

 

“Environmental Laws” means any federal, state and local laws relating to
emissions, discharges, releases of Hazardous Wastes or Materials into ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Wastes or Materials.

 

“Equipment Collateral” means (a) the equipment and other collateral pledged to
Lender hereunder as described in Exhibit B hereto, (b) all substitutions for any
of the foregoing property, and (c) all proceeds of any of the foregoing
property.

 

 
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“Equipment Facility Documents” means, collectively, the Master Security
Agreement dated as of April 23, 2012 between GECC and Apio and certain equipment
schedules and promissory notes issued thereunder from time to time, each as
hereafter modified, amended or restated from time to time.

 

“Equipment Note” means the Promissory Note dated as of the Closing Date by
Borrowers payable to the order of Lender in the original amount of
$9,089,389.88, as amended, modified and restated from time to time.

 

“Existing Loan Agreement” means that certain Loan Agreement dated as of April
23, 2012 between Borrower and General Electric Capital Corporation,
predecessor-in-interest to CF, as hereafter modified, amended or restated from
time to time.

 

“First Amendment” means that certain First Amendment to Open-End Mortgage,
Security Agreement, Assignment of Leases and Rents and Fixture Filing dated as
of February 25, 2016, but not effective until February 26, 2016, between
Borrower and Lender and relating to the Property located in Pennsylvania.

 

“GAAP” means generally accepted accounting principles applied on a consistent
basis.

 

“GreenLine Logistics” means Greenline Logistics, Inc., an Ohio corporation.

 

“Guarantor” means Landec Corporation, a Delaware corporation.

 

“Guaranty Agreement” means the Guaranty dated as of even date herewith by
Guarantor for the benefit of Lender and Collateral Agent, as hereafter modified,
amended or restated from time to time.

 

“Guarantor Documents” means the Guaranty Agreement, the Environmental Indemnity
Agreement and any other agreements, documents or certificates executed by
Guarantor in connection with the Loan contemplated by this Agreement.

 

“Hazardous Waste or Materials” means any substance or material defined in or
designated as hazardous or toxic wastes, hazardous or toxic material, a
hazardous, toxic or radioactive substance, or other similar term, by any
Environmental Law now or hereafter in effect.

 

“Interest Rate” means, for each Effective Period (other than the first Effective
Period), an annual interest rate equal to the sum of (a) 2.25% and (b) the LIBOR
Rate (expressed either as a positive or negative number, as the case may be).
The Interest Rate for the Effective Period from the Closing Date through the day
immediately preceding the first Payment Date is 2.73%.

 

“Lender” means (a) CF, acting as lender under this Agreement, (b) any surviving,
resulting or transferee corporation of CF and (c) except where the context
requires otherwise, any assignee(s) of Lender.

 

“LIBOR Rate” means for each Effective Period, the rate posted under the column
indicating the one-month London Interbank Offered Rate ("LIBOR") which is
published in the “Money Rates” column of the Wall Street Journal, Eastern
Edition (or, in the event such rate is not so published, in such other
nationally recognized publication as Lender may specify) on the first Business
Day of the calendar month in which such Effective Period commences.

 

 
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“Lien” means any security interest, mortgage, pledge, hypothecation, assignment,
lien, charge, encumbrance or claim against or interest in property of any kind
or nature whatsoever.

 

“Loan” means the loan from Lender to Borrowers pursuant to this Agreement.

 

“Loan Documents” means, collectively, the Borrower Documents, the Guarantor
Documents and any other agreements, documents or certificates executed by any
Credit Party in connection with the Loan contemplated by this Agreement.

 

“Loan Payments” means the loan payments payable by Borrowers pursuant to the
provisions of this Agreement and the Promissory Notes. The principal portions of
the Loan Payments are specifically set forth in Exhibits A-1 and A-2 hereto, and
the interest portions of the Loan Payments are determined pursuant to Article II
hereof. As provided in Article II hereof, Borrower shall pay Loan Payments to
Lender in the amounts set forth in Article II hereof and the Promissory Notes.

 

“Loan Proceeds” means the total amount of money disbursed by Lender to the
entities and in the amounts set forth in Exhibit D hereto pursuant to
Section 2.02 hereof for disbursement on behalf of Borrowers in accordance with
the settlement statement executed on behalf of Borrowers at closing.

 

“Mortgage” means, individually, (a) with respect to the Property located in
Pennsylvania, that certain Open-End Mortgage, Security Agreement, Assignment of
Leases and Rents and Fixture Filing dated as of April 19, but not effective
until April 23, 2012, executed by Greenline Foods, Inc., as predecessor in
interest to Apio for the benefit of Collateral Agent (as assignee of General
Electric Capital Corporation, as collateral agent), as amended by the First
Amendment, or, (b) with respect to the other Properties, a Mortgage or Deed of
Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing
dated as of the date hereof executed by Apio for the benefit of Collateral
Agent, as hereafter modified, amended or restated from time to time, and
“Mortgages” means, collectively, each and every Mortgage.

 

“Obligations” means any and all obligations and indebtedness, payment,
performance or otherwise, arising out of any of the following, as amended,
modified or restated from time to time: (a) this Agreement, (b) the Promissory
Notes, and (c) any other Loan Document.

 

“Ordinary Course of Business” means, in respect of any transaction involving any
person or entity, the ordinary course of such person’s or entity’s business, as
conducted by any such person or entity in accordance with past practice and
undertaken by such person or entity in good faith and not for purposes of
evading any covenant or restriction in any Loan Document.

 

“Organizational Documents” means, with respect to any organization, the
documents by which such organization was organized (such as a certificate of
incorporation, certificate of limited partnership or articles of organization,
and including, without limitation, any certificates of designation for preferred
stock or other forms of preferred equity) and which relate to the internal
governance of such organization (such as by-laws, a partnership agreement or an
operating, limited liability or members agreement).

 

 
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“Payment Date” means each date that a Loan Payment is due and payable, which
Payment Dates are set forth in Exhibits A-1 and A-2 hereto.

 

“Permitted Exceptions” means, with respect to each Property, the permitted
exceptions set forth in Exhibit B to the Mortgage encumbering such Property.

 

“Permitted Liens” means (a) any Lien created under any Loan Documents, (b) Liens
for taxes, fees, assessments or other governmental charges which are not past
due or remain payable without penalty, (c) with respect to the Equipment
Collateral, any Lien created hereunder and the Equipment Facility Documents, (d)
with respect to the Revolving Facility Collateral, any Lien created under the
Revolving Facility Documents, (e) carriers’, warehousemen’s, mechanic’s,
landlords’, materialmen’s, repairmen’s or other similar Liens arising in the
Ordinary Course of Business which are not past due or remain payable without
penalty or which are being contested in good faith by appropriate proceedings
diligently prosecuted and which (i) Borrowers obtain title insurance
endorsements and bonds or other security in a manner acceptable to Collateral
Agent in its reasonable but sole discretion, (ii) Borrowers demonstrate to
Collateral Agent’s reasonable satisfaction that the proceedings will
conclusively operate to prevent the sale of any Real Estate Collateral in order
to satisfy the Lien prior to the final determination of such proceedings, and
(iii) Borrowers maintain adequate reserves in accordance with GAAP, and
(f) Liens consisting of judgment or judicial attachment liens (other than for
payment of taxes, assessments or other governmental charges), provided that (i)
the enforcement of such Liens is effectively stayed, (ii) Borrowers obtain title
insurance endorsements and bonds or other security in a manner acceptable to
Collateral Agent in its reasonable but sole discretion and (iii) all such Liens
secure claims in the aggregate at any time outstanding for Borrowers and their
subsidiaries not exceeding $350,000.

 

“Prepayment Amount” means the amount which Borrowers may or must from time to
time pay or cause to be paid to Lender in order to prepay the Loan, as provided
in Section 2.07 hereof, such amount being the sum of (a) the principal amount of
the Loan or portion thereof being prepaid, (b) any accrued interest thereon and
(c) any other amounts due and owing hereunder.

 

“Promissory Notes” means, collectively, (a) the Real Estate Note, and (b) the
Equipment Note.

 

“Property” means, individually, “Property” as defined in each Mortgage, and
“Properties” means, collectively, each and every Property.

 

“Real Estate Collateral” means, collectively, (a) the Properties, (b) all
substitutions for any portion of any Property, and (c) all proceeds of any of
the foregoing property.

 

“Real Estate Note” means the Promissory Note dated as of the Closing Date by
Borrowers payable to the order of Lender in the original amount of
$7,686,000.00.

 

 
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“Revolving Facility Collateral” means all personal property assets of Borrowers.

 

“Revolving Facility Documents” means the Credit Agreement dated as of April 23,
2012 among Apio, Cal Ex and GreenLine Logistics, as borrowers, the other persons
thereto designated as credit parties, the lenders party thereto from time to
time, and GECC, as agent for such lenders, as the same may be amended, restated
or replaced from time to time.

 

“Security Agreement” means the Security Agreement dated as of April 23, 2012
among Collateral Agent, Apio, GreenLine Logistics and Cal Ex, as the same may be
amended, restated or replaced from time to time.

 

“Security Deposit” means a portion of the Loan Proceeds in the amount of
$886,626 being held by Collateral Agent pursuant to the Security Deposit Account
Agreement.

 

“Security Deposit Account Agreement” means the Security Deposit Account
Agreement dated as of even date herewith between Collateral Agent and Borrowers,
as the same may be amended, restated or replaced from time to time

 

“State” means the State of New York.

 

“Tenant” means Herb Thyme Farms, Inc., as successor to Herbal Gardens, Inc.

 

“Terrorism Laws” means Executive Order 13224 issued by the President of the
United States of America, the Terrorism Sanctions Regulations (Title 31 Part 595
of the U.S. Code of Federal Regulations), the Terrorism List Governments
Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal
Regulations) and the Foreign Terrorist Organizations Sanctions Regulations
(Title 31 Part 597 of the U.S. Code of Federal Regulations), and all other
present and future federal, state and local laws, ordinances, regulations,
policies and any other requirements of any governmental authority (including,
without limitation, the United States Department of the Treasury Office of
Foreign Assets Control) addressing, relating to, or attempting to eliminate,
terrorist acts and acts of war, each as hereafter supplemented, amended or
modified from time to time, and the present and future rules, regulations and
guidance documents promulgated under any of the foregoing, or under similar
laws, ordinances, regulations, policies or requirements of other states or
localities.

 

“Title Company” means First American Title Insurance Company.

 

“UCC” means the Uniform Commercial Code as adopted and in effect in the State.

 

Section 1.02. Exhibits. The following exhibits are attached hereto and made a
part hereof:

 

Exhibit A-1:     Schedule of Principal Portions of Loan Payments (Real Estate
Note).

 

Exhibit A-2:     Schedule of Principal Portions of Loan Payments (Equipment
Note).

 

Exhibit B:     List of Equipment Collateral.

 

 
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Exhibit C:     Form of Certificate of Chief Financial Officer.

 

Exhibit D:     Pay Proceeds Schedule.

 

Section 1.03. Rules of Construction. (a) The singular form of any word used
herein, including the terms defined in Section 1.01 hereof, shall include the
plural, and vice versa. The use herein of a word of any gender shall include
correlative words of all genders.

 

(b)     Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Agreement are to the designated Articles, Sections and
other subdivision of this Agreement as originally executed. The words “hereof,”
“herein,” “hereunder” and words of similar import refer to this Agreement as a
whole.

 

(c)     The headings or titles of the several articles and sections shall be
solely for convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.

 

ARTICLE II

TERMS OF LOAN

 

Section 2.01. Loan. Lender hereby agrees, subject to the terms and conditions of
this Agreement, to lend to Borrowers the amount of $16,775,389.88; and Borrowers
hereby agree to borrow from Lender such amount. The Loan is evidenced by the
Promissory Notes. Upon fulfillment of the conditions set forth in Article III
hereof, Lender shall disburse the Loan Proceeds to the entities and in the
amounts set forth in Exhibit D hereto. Borrowers’ obligation to repay the Loan
shall commence, and interest shall begin to accrue, on the date that Loan
Proceeds are disbursed by Lender pursuant to the preceding sentence.

 

Section 2.02. Interest. The principal amount of the Loan outstanding from time
to time shall bear interest at an annual rate equal to the lesser of the
Interest Rate and the highest rate permitted by law. Interest shall be
calculated on the basis of a 365-day year (or a 366-day leap year, as
applicable) and will be charged at the Interest Rate for each calendar day on
which any principal is outstanding. Interest accruing on the principal balance
of the Loan outstanding from time to time shall be payable on each Payment Date
and upon earlier demand in accordance with the terms hereof or prepayment in
accordance with Section 2.06 hereof.

 

Section 2.03. Payments. Borrowers shall pay to Lender on each Payment Date Loan
Payments, consisting of principal, in the amounts set forth in Exhibits A-1 and
A-2 hereto and in the Promissory Notes, and interest accruing at the Interest
Rate on the principal amount of the Loan outstanding hereunder from time to time
during each Effective Period. All amounts required to be paid by Borrowers
hereunder shall be paid in lawful money of the United States of America in
immediately available funds.

 

Section 2.04. Payment on Non-Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, such
payment may be made on the next succeeding Business Day.

 

 
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Section 2.05. Loan Payments To Be Unconditional. The obligations of Borrowers to
make the Loan Payments required under this Article II and to make other payments
hereunder and to perform and observe the covenants and agreements contained
herein shall be absolute and unconditional in all events, without abatement,
diminution, deduction, setoff or defense for any reason, including (without
limitation) any failure of any improvement to be completed or any accident,
condemnation, destruction or unforeseen circumstances. Notwithstanding any
dispute between either Borrower and any of Lender, Collateral Agent or any other
person, Borrowers shall make all Loan Payments when due and shall not withhold
any Loan Payments pending final resolution of such dispute, nor shall Borrowers
assert any right of setoff or counterclaim against its obligation to make such
payments required under this Agreement.

 

Section 2.06. Prepayments. (a) Borrowers may, in their discretion, prepay the
Loan and the Promissory Notes in whole at any time on a payment date by paying
the applicable Prepayment Amount.

 

(b)     Borrowers shall prepay the Loan and the Promissory Notes in whole or in
part at any time pursuant to Sections 8.01 and 8.02 hereto hereof by paying the
applicable Damaged Collateral Amount.

 

(c)     Borrowers shall prepay the Loan and the Promissory Notes in full
immediately upon written demand of Lender after the occurrence and during the
continuance of an Event of Default by paying the applicable Prepayment Amount.

 

Upon any prepayment in part of the Loan and the Promissory Notes, the prepayment
shall be applied to the Loan Payments and any other amounts due hereunder and
under the Promissory Notes in such order as determined by Lender.

 

Section 2.07. Joint and Several Liability. (a) The obligations under the
Borrower Documents of each Borrower are joint and several. Each reference to the
term “Borrower” shall be deemed to refer to each Borrower; each representation
and warranty made by either Borrower shall be deemed to have been made by each
Borrower; each covenant and undertaking on the part of either Borrower shall be
deemed individually applicable with respect to each Borrower; and each event
constituting a default under this Agreement shall be determined with respect to
each Borrower. A separate action or actions may be brought and prosecuted
against either Borrower whether an action is brought against any other Borrower
or whether any other Borrower is joined in any such action or actions. Each
Borrower waives any right to require Collateral Agent or Lender to: (i) proceed
against any other Borrower or any other Credit Party; (ii) proceed against or
exhaust any Collateral held from any other Borrower or any other Credit Party;
or (iii) pursue any other remedy in Collateral Agent’s or Lender’s power
whatsoever. Notices hereunder required to be provided to Borrowers shall be
effective if provided to either Borrower. Any consent on the part of Borrowers
hereunder shall be effective when provided by either Borrower, and Collateral
Agent and Lender shall be entitled to rely upon any notice or consent given by
either Borrower as being notice or consent given by Borrowers hereunder.

 

 
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(b)     In the event that either Borrower is deemed to be a surety or any
obligation of either Borrower under this Agreement is deemed to be an agreement
by such Borrower to answer for the debt or default of another Borrower or any
other Credit Party or as a hypothecation of property as security therefore, each
Borrower represents and warrants that: (i) no representation has been made to it
as to the creditworthiness of any other obligor, and (ii) it has established
adequate means of obtaining from each other obligor on a continuing basis,
financial or other information pertaining to each other obligor’s financial
condition. Each Borrower expressly waives diligence, demand, presentment,
protest and notice of every kind and nature whatsoever, including but not
limited to, notice of non-payment, dishonor, protest, acceptance, default,
acceleration or enforcement of rights and remedies, and consents that Collateral
Agent and/or Lender and either Borrower may deal with each other in connection
with said obligations or otherwise, or alter any contracts now or hereafter
existing between them, in any manner whatsoever, including without limitation
the renewal, extension, acceleration, changes in time for payment, and increases
or decreases in any principal, rate of interest or other amounts owing, all
without in any way altering the liability of each Borrower, or affecting any
security for such obligations. Should any default be made in the payment of any
such obligations or in the terms or conditions of any security held, Collateral
Agent and Lender are hereby expressly given the right, at their option, to
proceed in the enforcement of this Agreement or any other of the Borrower
Documents independently of any other remedy or security they may at any time
hold in connection with such obligations secured and it shall not be necessary
for Collateral Agent or Lender to proceed upon or against and/or exhaust any
other security or remedy before proceeding to enforce its rights against either
Borrower. Each Borrower agrees that its obligations under this Agreement and all
other Borrower Documents shall be primary, absolute, continuing and
unconditional, irrespective of and unaffected by any of the following actions or
circumstances (regardless of any notice to or consent of such Borrower): (i) the
genuineness, validity, regularity and enforceability of the Borrower Documents;
(ii) any extension, renewal, amendment, change, waiver or other modification of
the Borrower Documents or any other document; (iii) the absence of, or delay in,
any action to enforce the Borrower Documents; (iv) Collateral Agent’s or
Lender’s failure or delay in obtaining any other guaranty of the Obligations;
(v) the release of, extension of time for payment or performance by, or any
other indulgence granted to either Borrower or any other person with respect to
the Obligations by operation of law or otherwise; (vi) the existence, value,
condition, loss, subordination or release (with or without substitution) of, or
failure to have title to or perfect and maintain a security interest in, or the
time, place and manner of any sale or other disposition of any Collateral or
security given in connection with the Obligations, or any other impairment
(whether intentional or negligent, by operation of law or otherwise) of the
rights of Borrowers; (vii) either Borrower’s voluntary or involuntary
bankruptcy, assignment for the benefit of creditors, reorganization, or similar
proceedings affecting such Borrower or any of its assets; or (viii) any other
action or circumstances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor. Each Borrower further waives any
right of subrogation, reimbursement, exoneration, contribution, indemnification,
setoff or other recourse in respect of sums paid to Collateral Agent or Lender
by either Borrower, until all the Obligations have been paid in full. Each
Borrower unconditionally and irrevocably (i) waives and agrees not to assert any
and all rights, benefits and defenses which might otherwise be available under
the laws of the State of New York which might operate, contrary to such
Borrower’s agreements in the Borrower Documents, to limit such Borrower’s
liability under, or the enforcement of, the Borrower Documents; (ii) waives the
benefits of any statutory provision limiting the right of Collateral Agent or
Lender to recover a deficiency judgment, or to otherwise proceed, against any
person or entity obligated for the payment of the Obligations, after any
foreclosure or trustee’s sale of any collateral securing payment of the
Obligations; (iii) covenants that the Loan Documents will not be discharged
until all of the Obligations are fully satisfied; (iv) agrees that the Borrower
Documents shall remain in full effect without regard to, and shall not be
affected or impaired by, any invalidity, irregularity or unenforceability in
whole or in part of any of the Loan Documents, or any limitation of the
liability of either Borrower thereunder, or any limitation on the method or
terms of payment thereunder which may now or hereafter be caused or imposed in
any manner whatsoever; and (v) waives and relinquishes any right such Borrower
now has or may hereafter acquire to revoke the Borrower Documents or any
provision thereof.

 

 
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(c)     Each Borrower represents and warrants that (i) each Borrower is an
affiliate of each other, (ii) each Borrower is subject to the same control,
directly or indirectly, of each other Borrower, and (iii) each Borrower is
financially interdependent on each other. As a result of such common control,
each Borrower acknowledges and agrees that a common enterprise exists and that
each Borrower will receive consideration for its execution and delivery of the
Borrower Documents.

 

Section 2.08. Security. The Obligations shall be secured by, among other things,
a lien on the Collateral pursuant to this Agreement and the Mortgages and by
certain other documents executed and delivered in connection herewith.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.01. Conditions of Closing. Lender’s agreement to make the Loan and to
disburse the Loan Proceeds shall be subject to the condition precedent that
Lender shall have received all of the following, each in form and substance
satisfactory to Lender:

 

(a)     This Agreement, properly executed on behalf of Borrowers, and each of
the Exhibits hereto properly completed.

 

(b)     The Promissory Notes, properly executed on behalf of Borrowers.

 

(c)     The First Amendment.

 

(d)     Each Mortgage for the Properties other than the Property in
Pennsylvania, properly executed on behalf of the applicable Borrower.

 

(e)     The Environmental Indemnity Agreement, properly executed on behalf of
the Credit Parties.

 

(f)     The Guaranty Agreement, properly executed on behalf of Guarantor.

 

(g)     A certificate of the Secretary or an Assistant Secretary of each Credit
Party, certifying as to (i) the resolutions of the board of directors or consent
of the members or managers of such Credit Party, authorizing the execution,
delivery and performance of the Loan Documents, (ii) the Organizational
Documents of such Credit Party, and (iii) the signatures of the officers or
agents of such Credit Party authorized to execute and deliver the Borrower
Documents on behalf of such Credit Party.

 

 
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(h)     Currently certified copies of the articles of incorporation or
organization of each Credit Party.

 

(i)     A Certificate of Good Standing issued as to each Credit Party by the
Secretary of State of the state of such Credit Party’s organization not more
than 30 days prior to the date hereof.

 

(j)     Financing statements authorized by each Borrower, as debtor, and naming
Collateral Agent, as secured party.

 

(k)     Certificates of the insurance required hereunder, containing a lender’s
loss payable clause or endorsement in favor of Lender.

 

(l)     Date down and mortgage modification endorsements to the existing
mortgagee policy of title insurance in favor of Collateral Agent with respect to
the Property located in Pennsylvania (the “Pennsylvania Title Policy”), which,
among other things, increase the amount of coverage to $8,500,000.

 

(m)     An ALTA (or equivalent) mortgagee policy of title insurance with respect
to the Property located in California, each with reinsurance and endorsements as
Lender may require, containing no exceptions to title (printed or otherwise)
which are unacceptable to Lender, and insuring that the related Mortgage is a
second-priority lien (subject to the existing lien in favor of Collateral Agent)
on such Property. Without limitation, such policy shall (i) be in the ALTA 2006
form (deleting arbitration, if permissible) or, if not available, the form
commonly used in the State, insuring Collateral Agent and its successors and
assigns; and (ii) include the following endorsements and/or affirmative
coverages: (A) ALTA 9 Comprehensive, (B) Survey, (C) Access, (D) Environmental
Protection Lien, (E) Subdivision, (F) Contiguity (as applicable), (G) Tax
Parcel, (H) Address and Improvement, (I) Usury, (J) Tax Sale (as applicable),
(K) Doing Business, (L) First Loss, (M) Tie-In (except with respect to the
Property located in Hanover, Pennsylvania), and (N) ALTA 3.1 Zoning (with
additional coverage for number and type of parking spaces). Such policy of title
insurance shall be in the amount of $14,450,000.

 

(n)     An appraisal of the Property located in Pennsylvania and the Property
located in California addressed to Lender, in form and substance acceptable to
Lender and prepared by an MAI certified appraiser acceptable to Lender in
conformance with the guidelines and recommendations set forth in the Uniform
Standards of Professional Appraisal Practice (USPAP) and the requirements of the
Code of Professional Ethics and Standards of Professional Appraisal Practice of
the Appraisal Institute.

 

(o)     Current searches of appropriate filing offices showing that (i) no state
or federal tax liens have been filed and remain in effect against either
Borrower, (ii) no financing statements have been filed and remain in effect
against either Borrower relating to the Collateral except those financing
statements filed by Lender, and (iii) all financing statements necessary to
perfect the lien on the Collateral have been filed.

 

 
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(p)     An opinion of counsel to Credit Parties, addressed to Lender and
Collateral Agent, in form and substance acceptable to Lender.

 

(q)     Payment of all previously documented Lender’s fees, commissions and
expenses required by Section 11.01 hereof.

 

(r)     Any other documents or items required by Lender.

 

Section 3.02. Conditions of Disbursement of Security Deposit. Collateral Agent’s
agreement to disburse the Security Deposit shall be subject to the condition
precedent that Collateral Agent and Lender shall have received all of the
following, each in form and substance reasonably satisfactory to Collateral
Agent and Lender:

 

(a)     An as built ALTA survey of the Property located in Pennsylvania, in form
and substance acceptable to Lender.

 

(b)     An endorsement to the Pennsylvania Title Policy that removes the survey
exception.

 

(c)     A final appraisal of the Property located in Pennsylvania addressed to
Lender, in form and substance acceptable to Lender and prepared by an MAI
certified appraiser acceptable to Lender in conformance with the guidelines and
recommendations set forth in the Uniform Standards of Professional Appraisal
Practice (USPAP) and the requirements of the Code of Professional Ethics and
Standards of Professional Appraisal Practice of the Appraisal Institute.

 

(d)     A final certificate of occupancy for the Property located in
Pennsylvania.

 

(e)     Proof that the final payment has been made to the contractor of the
improvements on the Property located in Pennsylvania and final lien waivers in
connection therewith.

 

(f)     Invoices for the final payment on any Equipment Facility Collateral not
paid in full as of the Closing Date, and proof of payment of the same.

 

(g)     A certificate of acceptance for all of the Equipment Facility Collateral
executed on behalf of Borrowers.

 

(h)     Any other documents or items reasonably required by Lender.

 

 
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ARTICLE IV

REPRESENTATIONS, WARRANTIES AND COVENANTS OF BORROWERS

 

Each Borrower represents, warrants and covenants for the benefit of Lender and
Collateral Agent, as follows:

 

(a)     Apio is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and Apio Cooling is a limited
partnership duly organized, validly executing and in good standing under the
laws of the State of California. Each Borrower has power to enter into the
Borrower Documents and by proper action has duly authorized the execution and
delivery of the Borrower Documents. Each Borrower is in good standing and is
duly licensed or qualified to transact business in the state of its respective
organization and in all jurisdictions where the character of the property owned
or leased or the nature of the business transacted by it makes such licensing or
qualification necessary. Each Borrower’s exact legal name is as set forth on the
execution page hereof.

 

(b)     Each Borrower has been fully authorized to execute and deliver the
Borrower Documents under the terms and provisions of the resolution of its board
of directors or consent of its managers or members, as the case may be, or by
other appropriate official approval, and further represents, covenants and
warrants that all requirements have been met, and procedures have occurred in
order to ensure the enforceability of the Borrower Documents and the Borrower
Documents have been duly authorized, executed and delivered.

 

(c)     The officer of each Borrower executing the Borrower Documents has been
duly authorized to execute and deliver the Borrower Documents.

 

(d)     The Borrower Documents constitute valid and legally binding obligations
of each Borrower, enforceable against such Borrower in accordance with their
respective terms, except to the extent limited by bankruptcy, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors’ rights.

 

(e)     The execution and delivery of the Borrower Documents, the consummation
of the transactions contemplated hereby and the fulfillment of the terms and
conditions hereof do not and will not violate any law, rule, regulation or
order, the violation of which could reasonably be expected to have a material
adverse effect on the financial condition, operations or business of Borrowers
taken as a whole, conflict with or result in a breach of any of the terms or
conditions of any Organizational Document of such Borrower or conflict with or
result in a breach of any restriction or of any agreement or instrument to which
such Borrower is now a party and do not and will not constitute a default under
any of the foregoing or result in the creation or imposition of any liens,
charges or encumbrances of any nature upon any of the property or assets of such
Borrower contrary to the terms of any instrument or agreement.

 

 
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(f)     The authorization, execution, delivery and performance of this Agreement
by each Borrower do not require submission to, approval of, or other action by
any governmental authority or agency, which action with respect to this
Agreement has not been taken and which is final and nonappealable.

 

(g)     There is no action, suit, proceeding, claim, inquiry or investigation,
at law or in equity, before or by any court, regulatory agency, public board or
body pending or, to the best of either Borrower’s knowledge, threatened against
or affecting either Borrower, challenging either Borrower’s authority to enter
into the Borrower Documents or any other action wherein an unfavorable ruling or
finding would adversely affect the enforceability of the Borrower Documents or
any other transaction of either Borrower which is similar hereto, or could
reasonably be expected to cause a material adverse effect on the financial
condition, operations or business of Borrowers taken as a whole.

 

(h)     Each Property is properly zoned for its current and anticipated use and
the use of such Property will not violate any applicable zoning, land use,
environmental or similar law or restriction. Borrowers have all licenses and
permits to use the Real Estate Collateral.

 

(i)     Borrowers have furnished to Lender the Reports (as defined in the
Environmental Indemnity Agreement). Except as disclosed to Lender in the Report,
neither Borrower has received any notification of any kind suggesting that any
Property or any adjacent property is or may be contaminated with any Hazardous
Waste or Materials or is or may be required to be cleaned up in accordance with
any applicable law or regulation; and each Borrower further represents and
warrants that, except as previously disclosed to Lender and Collateral Agent in
writing, to the best of its knowledge as of the date hereof after due and
diligent inquiry, there are no Hazardous Waste or Materials located in, on or
under any Property or any adjacent property, or incorporated in any
improvements, nor has any Property or any adjacent property ever been used as a
landfill or a waste disposal site, or a manufacturing, handling, storage,
distribution or disposal facility for Hazardous Waste or Materials. Each
Borrower has obtained all permits, licenses and other authorizations which are
required under any Environmental Laws at such Borrower’s facilities or in
connection with the operation of its facilities. Except as previously disclosed
to Lender and Collateral Agent in writing, Borrowers and all activities of
Borrowers at their respective facilities comply with all Environmental Laws and
with all terms and conditions of any required permits, licenses and
authorizations applicable to Borrowers with respect thereto. Except as
previously disclosed to Lender and Collateral Agent in writing, Borrowers are
also in compliance with all limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
Environmental Laws or contained in any plan, order, decree, judgment or notice
of which Borrowers are aware, the noncompliance with which could reasonably be
expected to cause a material adverse effect on the financial condition,
operations or business of Borrowers taken as a whole. Except as previously
disclosed to Lender and Collateral Agent in writing, neither Borrower is aware
of, and neither Borrower has received notice of, any events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
interfere with or prevent continued compliance with, or which may give rise to
any liability under, any Environmental Laws.

 

 
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(j)     Borrowers has heretofore furnished to Lender (i) the audited
consolidated financial statements of Guarantor and its subsidiaries dated
December 31, 2014 and (ii) the unaudited consolidated financial statements of
Guarantor and its subsidiaries for the months ended December 31, 2015, and those
statements fairly present the financial condition of Borrowers and Guarantor on
the dates thereof and the results of its operations and cash flows for the
periods then ended and were prepared in accordance with GAAP (except as
otherwise expressly noted therein, subject to, in the case of the unaudited
interim financial statements, normal year-end adjustments and the lack of
footnote disclosures). Since December 31, 2015, with respect to Guarantor and
its subsidiaries, there has been no material adverse change in the business,
properties or financial condition of such entities taken as a whole.

 

(k)     Borrowers have paid or caused to be paid to the proper authorities when
due all federal, state and local taxes required to be withheld by them.
Borrowers have filed all federal, state and local tax returns which are required
to be filed, and Borrowers have paid or caused to be paid to the respective
taxing authorities all taxes as shown on said returns or on any assessment
received by them to the extent such taxes have become due.

 

(l)     All financial and other information provided to Lender by or on behalf
of any Credit Party in connection with Borrowers’ request for the Loan
contemplated hereby is true and correct in all material respects and no Credit
Party has omitted to provide Lender with any information which would be material
to Lender’s decision to enter into this Agreement and, as to projections,
valuations or pro forma financial statements, present a good faith opinion as to
such projections, valuations and pro forma condition and results.

 

(m)     Borrowers have authorized Lender and Collateral Agent to file financing
statements, and such financing statements when filed will be sufficient to
perfect the security interest created pursuant to this Agreement. When such
financing statements are filed in the offices noted therein, Collateral Agent
will have a valid and perfected security interest in the Collateral, subject to
no other Lien other than Permitted Liens. None of the Collateral constitutes a
replacement of, substitution for or accessory to any property of either Borrower
subject to a Lien. Borrowers own the Collateral subject to no Liens except for
the Liens created hereby and by the Mortgages, the Permitted Exceptions and the
Permitted Liens.

 

(n)     No person other than Borrowers and Tenant are in occupancy or possession
of any portion of any Property.

 

(o)     Neither any Credit Party nor any individual or entity owning directly or
indirectly any interest in any Credit Party is an individual or entity whose
property or interests are subject to being “blocked” under any of the Terrorism
Laws or is otherwise in violation of any of the Terrorism Laws.

 

 
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ARTICLE V

TITLE TO COLLATERAL; SECURITY INTEREST

 

Section 5.01. Title to Collateral. Borrowers shall have good, marketable and
insurable title in fee simple to all Collateral that is real property, and good
title to all other Collateral. Borrowers will at all times protect and defend,
at their own cost and expense, such title from and against all Liens and legal
processes of creditors of Borrowers, and keep all Collateral free and clear of
all such Liens and processes other than Liens created hereby and by the
Mortgages, the Permitted Exceptions and the Permitted Liens.

 

Section 5.02. Security Interest in Collateral. This Agreement is intended to
constitute a security agreement within the meaning of the UCC. As security for
the Obligations, Borrowers hereby grant to Collateral Agent, for the benefit of
Lender, a security interest constituting a first lien on the Collateral, subject
to Permitted Liens. Borrowers ratify their previous authorization for Lender or
Collateral Agent to pre-file UCC financing statements and any amendments thereto
describing the Collateral and containing any other information required by the
applicable UCC. Borrowers authorize Collateral Agent, and hereby grant
Collateral Agent a power of attorney (which is coupled with an interest), to
file financing statements and amendments thereto describing the Collateral and
containing any other information required by the applicable UCC and all proper
terminations of the filings of other secured parties with respect to the
Collateral, in such form and substance as Collateral Agent, in its sole
discretion, may determine. Borrowers agree to execute such additional documents,
including demands for terminations, assignments, affidavits, notices and similar
instruments, in form satisfactory to Collateral Agent, and take such other
actions that Collateral Agent deems necessary or appropriate to establish and
maintain the security interest created by this Section, and each Borrower hereby
designates and appoints Collateral Agent as its agent, and grants to Collateral
Agent a power of attorney (which is coupled with an interest), to execute on
behalf of such Borrower such additional documents and to take such other
actions. Each Borrower hereby waives any right that such Borrower may have to
file with the applicable filing officer any financing statement, amendment,
termination or other record pertaining to the Collateral and/or Collateral
Agent’s interest therein.

 

Section 5.03. Change in Name or Corporate Structure of either Borrower; Change
in Location of either Borrower’s Chief Executive Office or Principal Executive
Office. Each Borrower’s chief executive office and principal executive office
are located at the address set forth on Schedule 5.03, and all of such
Borrower’s records relating to its business and the Collateral are kept at such
location. Borrowers hereby agree to provide written notice to Collateral Agent
and Lender of any change or proposed change in its name, corporate structure,
chief executive office or principal executive office or change or proposed
change in the location of the Real Estate Collateral or any material portion of
the Equipment Collateral. Such notice shall be provided ten days in advance of
the date that such change or proposed change is planned to take effect.

 

Section 5.04. Liens. Neither Borrower shall, directly or indirectly, create,
incur, assume or suffer to exist any Lien on or with respect to the Collateral
except for the Lien created hereby or by the Mortgages, the Permitted Exceptions
or the Permitted Liens. Borrowers shall promptly, at their own expense, take
such action as may be necessary duly to discharge or remove any such Lien.
Borrowers shall reimburse Collateral Agent and Lender for any expenses incurred
by Collateral Agent or Lender to discharge or remove any Lien.

 

 
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Section 5.05. Assignment of Insurance. As additional security for the
Obligations, Borrowers hereby assign to Collateral Agent, for the benefit of
Lender, any and all moneys (including, without limitation, proceeds of insurance
and refunds of unearned premiums) due or to become due under, and all other
rights of Borrowers with respect to, any and all policies of insurance now or at
any time hereafter covering the Collateral or any evidence thereof or any
business records or valuable papers pertaining thereto, and Borrowers hereby
direct the issuer of any such policy to pay all such moneys directly to
Collateral Agent. Borrowers hereby assign to Collateral Agent any and all moneys
due or to become due with respect to any condemnation proceeding affecting the
Collateral. At any time, whether before or after the occurrence and during the
continuance of any Event of Default, Collateral Agent may (but need not), in
Collateral Agent’s name or in either Borrower’s name, execute and deliver proof
of claim, receive all such moneys, endorse checks and other instruments
representing payment of such moneys, and adjust, litigate, compromise or release
any claim against the issuer of any such policy or party in any condemnation
proceeding.

 

Section 5.06. Collateral Agent. By accepting the benefits of this Agreement,
Lender appoints Collateral Agent as its collateral agent under and for the
purposes of the Collateral Agent Documents. Lender authorizes Collateral Agent
to act on behalf of Lender under the Collateral Agent Documents and to exercise
such powers thereunder as are specifically delegated to or required of
Collateral Agent by the terms thereof, together with such powers as may be
reasonably incidental thereto. Without limiting the provisions of any Collateral
Agent Document, neither Collateral Agent nor the directors, officers, employees
or agents thereof shall be liable to Lender (and Lender will hold Collateral
Agent harmless) for any action taken or omitted to be taken by it under any
Collateral Agent Document, or in connection therewith, expect for willful
misconduct or gross negligence of Collateral Agent, or responsible for any
recitals or warranties therein, or for the effectiveness, enforceability,
validity or due execution of any Collateral Agent Document, or for the creation,
perfection or priority of any lien created by any Collateral Agent Document, or
the validity, genuineness, enforceability, existence, value or sufficiency of
any collateral security, or to make any inquiry respecting the performance by
Borrowers of their obligations hereunder.

 

ARTICLE VI

AFFIRMATIVE COVENANTS OF BORROWERS

 

So long as the Loan shall remain unpaid, Borrowers will comply with the
following requirements:

 

Section 6.01. Reporting Requirements. Borrowers will deliver, or cause to be
delivered, to Lender each of the following, which shall be in form and detail
acceptable to Lender:

 

 
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(a)     as soon as available, and in any event within 90 days after the end of
each fiscal year of Guarantor, audited consolidated financial statements of
Guarantor and its subsidiaries with the unqualified opinion of independent
certified public accountants selected by Guarantor and reasonably acceptable to
Lender, which annual financial statements shall include the consolidated balance
sheet of Guarantor and its subsidiaries as at the end of such fiscal year and
the related consolidated statements of income, retained earnings and cash flows
of Guarantor and its subsidiaries for the fiscal year then ended, all in
reasonable detail and prepared in accordance with GAAP, together with (i) a
report signed by such accountants stating that in making the investigations
necessary for said opinion they obtained no knowledge, except as specifically
stated, of any Default or Event of Default hereunder; and (ii) a certificate of
the chief financial officer of Guarantor in the form of Exhibit C hereto stating
that such financial statements have been prepared in accordance with GAAP and
whether or not such officer has knowledge of the occurrence of any Default or
Event of Default hereunder and, if so, stating in reasonable detail the facts
with respect thereto;

 

(b)     as soon as available and in any event within 45 days after the end of
each fiscal quarter of Guarantor, an unaudited/internal consolidated balance
sheet and statements of income and retained earnings of Guarantor and its
subsidiaries as at the end of and for such quarter and for the year to date
period then ended, in reasonable detail and stating in comparative form the
figures for the corresponding date and periods in the previous year, all
prepared in accordance with GAAP and certified by the chief financial officer of
Guarantor, subject to year-end audit adjustments; and accompanied by a
certificate of that officer in the form of Exhibit C hereto stating (i) that
such financial statements have been prepared in accordance with GAAP, and
(ii) whether or not such officer has knowledge of the occurrence of any Default
or Event of Default hereunder not theretofore reported and remedied and, if so,
stating in reasonable detail the facts with respect thereto;

 

(c)     as promptly as practicable (but in any event not later than ten Business
Days) after an officer of either Borrower obtains knowledge of the occurrence of
any event that constitutes a Default or an Event of Default hereunder, notice of
such occurrence, together with a detailed statement by a responsible officer of
such Borrower of the steps being taken by Borrowers to cure the effect of such
Default or Event of Default;

 

(d)     promptly upon knowledge thereof, notice of any loss or destruction of or
damage to any Collateral having a fair market value in excess of $100,000 or of
any material adverse change in any Collateral;

 

(e)     promptly upon knowledge thereof, notice of any violation by either
Borrower of any law, rule or regulation, the noncompliance with which could
reasonably be expected to cause a material adverse effect on its financial
condition, operations or business of Borrowers taken as a whole; and

 

(f)     promptly upon knowledge thereof, notice of any material adverse change
in the financial or operating condition of any Credit Party.

 

 
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Notwithstanding anything in this Section to the contrary, Credit Parties shall
be deemed to have satisfied the obligations in clauses (a) and (b) of this
Section (other than the obligation to provide a certificate of the chief
financial officer of Guarantor) on the date on which Guarantor posts such
documents, or provides a link thereto on Guarantor’s website on the internet at
the website address www.landec.com (or any successor page notified to Lender).
Furthermore, documents required to be delivered pursuant to clauses (a) and (b)
of this Section may be delivered electronically and if so delivered, shall be
deemed to have been delivered on the date on which such documents are filed for
public availability on the SEC’s Electronic Data Gathering and Retrieval System.

 

Section 6.02. Books and Records; Inspection and Examination. Each Borrower will
keep accurate books of record and account for itself pertaining to the
Collateral and pertaining to such Borrower’s business and financial condition
and such other matters as Lender may from time to time request in which true and
complete entries will be made in accordance with GAAP and, upon request of
Lender, will permit any officer, employee, attorney or accountant for Lender to
audit, review, make extracts from, or copy any and all corporate and financial
books, records and properties of such Borrower at all times during ordinary
business hours, and to discuss the affairs of such Borrower with any of its
directors, officers, employees or agents. Borrowers will permit Lender, or its
employees, accountants, attorneys or agents, to examine and copy any or all of
their records and to examine and inspect the Collateral at any time during
Borrowers’ business hours.

 

Section 6.03. Compliance With Laws. Borrowers will (a) comply with the
requirements of applicable laws and regulations, the noncompliance with which
could reasonably be expected to cause a material adverse effect on their
financial condition, operations or business and (b) use and keep the Collateral,
and will require that others use and keep the Collateral, only for lawful
purposes, without violation of any federal, state or local law, statute or
ordinance. Borrower shall secure all permits and licenses, if any, necessary for
the installation and operation of the Collateral. Borrowers shall comply in all
respects (including, without limitation, with respect to the use, maintenance
and operation of each portion of the Collateral) with all laws of the
jurisdictions in which its operations involving any portion of the Collateral
may extend and of any legislative, executive, administrative or judicial body
exercising any power or jurisdiction over any portion of the Collateral or its
interest or rights under this Agreement, the noncompliance with which could
reasonably be expected to cause a material adverse effect on its financial
condition, operations or business of Borrowers taken as a whole.

 

Section 6.04. Environmental Compliance. Borrowers shall promptly comply with all
statutes, regulations and ordinances, and with all orders, decrees or judgments
of governmental authorities or courts having jurisdiction, relating to the use,
collection, treatment, disposal, storage, control, removal or cleanup of
Hazardous Waste or Materials in, on or under the Properties or any adjacent
property, or incorporated in any improvements, at Borrowers’ expense. In the
event that Lender or Collateral Agent at any time believes, in its sole but
reasonable discretion, that any Property is not free of all Hazardous Waste or
Materials other than Permitted Substances (as defined in the Environmental
Indemnity Agreement) or that either Borrower has violated any applicable
Environmental Laws with respect to any Property, then, upon request by Lender or
Collateral Agent, Borrowers promptly shall obtain and furnish to Lender and
Collateral Agent, at Borrowers’ sole cost and expense, an environmental audit
and inspection of such Property from an expert satisfactory to Lender and
Collateral Agent in their sole but reasonable discretion. In the event that
Borrowers fail to promptly obtain such audit or inspection, Lender or Collateral
Agent or its agents may perform or obtain such audit or inspection at Borrowers’
sole cost and expense. Lender and Collateral Agent may, but are not obligated
to, enter upon any Property and take such actions and incur such costs and
expenses to effect such compliance as they deem advisable to protect their
interest in such Property; and whether or not either Borrower has actual
knowledge of the existence of Hazardous Waste or Materials on such Property or
any adjacent property as of the date hereof, Borrowers shall reimburse Lender
and Collateral Agent as provided herein for the full amount of all reasonable
costs and expenses incurred by Lender or Collateral Agent prior to Collateral
Agent acquiring title to any Property through foreclosure or acceptance of a
deed in lieu of foreclosure, in connection with such compliance activities.
Neither this provision nor any provision herein or in the Mortgages or related
documents shall operate to put Lender or Collateral Agent in the position of an
owner of any Property prior to any acquisition of such Property by Lender or
Collateral Agent. The rights granted to Lender and Collateral Agent herein and
in the Mortgages or related documents are granted solely for the protection of
Collateral Agent’s lien and security interest covering the Properties and do not
grant to Lender and Collateral Agent the right to control either Borrower’s
actions, decisions or policies regarding Hazardous Waste or Materials.

 

 
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Section 6.05. Payment of Taxes and Other Claims. Borrowers will pay or
discharge, when due, (a) all taxes, assessments and governmental charges levied
or imposed upon them or upon their income or profits, upon any properties
belonging to them (including, without limitation, the Collateral) or upon or
against the creation, perfection or continuance of the lien created pursuant to
this Agreement or the Mortgages, prior to the date on which penalties attach
thereto, (b) all federal, state and local taxes required to be withheld by them,
and (c) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien or charge upon any properties of either Borrower;
provided, that Borrowers shall not be required to pay any Contested Taxes.
Borrowers will pay, as the same respectively come due, all taxes and
governmental charges of any kind whatsoever that may at any time be lawfully
assessed or levied against or with respect to the Collateral (other than
Contested Taxes), as well as all gas, water, steam, electricity, heat, power,
telephone, utility and other charges incurred in the operation, maintenance,
use, occupancy and upkeep of the Collateral.

 

Section 6.06. Preservation and Maintenance of Collateral. Borrowers (a) shall,
at their own expense, maintain, preserve and keep the Collateral in good repair,
working order and condition, and shall from time to time make all repairs and
replacements necessary to keep the Collateral in such condition, and in
compliance with state and federal laws, ordinary wear and tear excepted,
(b) shall not commit waste or permit impairment or deterioration of the
Collateral, (c) shall not abandon the Collateral, (d) shall restore or repair
promptly and in a good and workmanlike manner all or any portion of the
Collateral to the equivalent of its original condition, or such other condition
as Lender may approve in writing, in the event of any damage, injury or loss
thereto, whether or not insurance proceeds are available to cover in whole or in
part the costs of such restoration or repair, (e) shall keep all improvements
and fixtures on the Properties, in good repair and shall replace fixtures and
equipment on the Properties when necessary to keep such items in good repair,
(f) shall generally operate and maintain the Properties in a manner to ensure
maximum rentals, and (g) shall give notice in writing to Lender of and, unless
otherwise directed in writing by Lender, appear in and defend any action or
proceeding purporting to affect the Collateral, the security of this Agreement
or the Mortgages or the rights or powers of Lender hereunder or thereunder.
Neither either Borrower nor any tenant or other person shall remove, demolish or
alter any improvement now existing or hereafter erected on the Properties or any
fixture in or on the Properties except when incident to the replacement of
fixtures with items of like kind. In the event that any portion of the
Collateral become worn out, lost, destroyed, damaged beyond repair or otherwise
rendered unfit for use, Borrowers, at their own expense and expeditiously, will
replace or cause the replacement of such portion by replacement property free
and clear of all liens and encumbrances and with a value and utility at least
equal to that of the property being replaced (assuming that such replaced
portions were otherwise in good working order and repair). All such replacement
property shall be deemed to be incorporated immediately into and to constitute
an integral portion of the Collateral and, as such, shall be subject to the
terms of this Agreement and the Mortgages. Neither Lender nor Collateral shall
have any responsibility in any of these matters, or for the making of
improvements or additions to the Collateral.

 

 
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Each Borrower represents, warrants and covenants that the Properties are and
shall be in compliance with the Americans with Disabilities Act of 1990 and all
of the regulations promulgated thereunder to the extent applicable to the
Properties, as the same may be amended from time to time.

 

Section 6.07. Insurance. (a) Borrowers shall obtain and maintain the following
types of insurance upon and relating to the Collateral:

 

(i)     “Special Form” property and fire insurance (with extended coverage
endorsement including malicious mischief and vandalism) in an amount not less
than the full replacement value of the Collateral (with a deductible not to
exceed $100,000), naming Collateral Agent under a lender’s loss payable
endorsement naming Collateral Agent as mortgagee and loss payee and including
agreed amount, inflation guard, replacement cost and waiver of subrogation
endorsements;

 

(ii)     Commercial general liability insurance in an amount not less than
$2,000,000 per occurrence and on an occurrence basis, insuring against personal
injury, death and property damage and naming Collateral Agent and Lender as
additional insureds;

 

(iii)     Business interruption insurance or rent loss insurance, as applicable,
covering loss of rental (including all expenses payable by tenants) for up to
six months in an amount of up to $5,126,000;

 

(iv)     Flood hazard insurance with respect to each Property in amounts not
less than the maximum limit of coverage then available with respect to such
Property or the amount of such Property, whichever is less if such Property is
located in an area designated by the Federal Emergency Management Act or is
hereafter designated or identified as an area having special flood hazards by
the Department of Housing and Urban Development or such other official as shall
from time to time be authorized by federal or state law to make such designation
pursuant to any national or state program of flood insurance; and

 

 
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(v)     Such other types of insurance or endorsements to existing insurance as
may be required from time to time by Lender or Collateral Agent.

 

(b)     Upon the request of Lender or Collateral Agent, Borrowers shall increase
the coverages under any of the insurance policies required to be maintained
hereunder or otherwise modify such policies in accordance with Lender’s standard
commercial lending practices.

 

(c)     All of the insurance policies required hereunder shall be issued by
corporate insurers licensed to do business in the state in which each Property
is located and having a Best’s Rating-Financial Size Rating of A:VIII or better
as determined and published by A.M. Best Company and shall be in form acceptable
to Lender and Collateral Agent. Certificates of all insurance required to be
maintained hereunder shall be delivered to Lender and Collateral Agent (which
may include the requirement of an Acord 28 “Evidence of Property Insurance” form
as to property insurance) prior to or contemporaneously with Borrowers’
execution of this Agreement. All such certificates shall be in form reasonably
acceptable to Lender and Collateral Agent and with respect to property insurance
shall require the insurance company to give to Collateral Agent at least 30
days’ prior written notice before canceling the policy for any reason or
materially amending it. In addition, with respect to any liability policies
Borrowers’ insurance broker shall endeavor to provide Collateral Agent 30 days’
prior written notice of cancellation or non-renewal (other than cancellation or
non-renewal based on non-payment of premium) and 10 days prior written notice
for cancellation or non-renewal based on non-payment of premium. Certificates
evidencing all renewal and substitute policies of insurance shall be delivered
to Collateral Agent at least 15 days before termination of the policies being
renewed or substituted. If any loss shall occur at any time after the occurrence
and during the continuance of an Event of Default, Collateral Agent shall be
entitled to the benefit of all insurance policies held or maintained by
Borrowers, to the same extent as if same had been made payable to Collateral
Agent, and upon foreclosure under the Mortgages, Collateral Agent shall become
the owner thereof. Lender and Collateral Agent shall have the right, but not the
obligation, to make premium payments, at Borrowers’ expense, to prevent any
cancellation, endorsement, alteration or reissuance of any policy of insurance
maintained by either Borrower, and such payments shall be accepted by the
insurer to prevent same.

 

(d)     As among Lender, Collateral Agent and Borrowers, Borrowers assume all
risks and liabilities from any cause whatsoever, whether or not covered by
insurance, for loss or damage to any portion of the Collateral and for injury to
or death of any person or damage to any property, whether such injury or death
be with respect to agents or employees of either Borrower or of third parties,
and whether such property damage be to either Borrower’s property or the
property of others. Whether or not covered by insurance, Borrowers hereby assume
responsibility for and agrees to reimburse Lender and Collateral Agent for and
will indemnify, defend and hold Lender and Collateral Agent harmless from and
against all liabilities, obligations, losses, damages, penalties, claims,
actions, costs and expenses (including reasonable attorneys’ fees) of whatsoever
kind and nature, imposed on, incurred by or asserted against Lender or
Collateral Agent that in any way relate to or arise out of this Agreement, the
transactions contemplated hereby and the Collateral, including but not limited
to, (i) the selection, manufacture, construction, purchase, acceptance or
rejection of the Collateral or the ownership of the Collateral, (ii) the
delivery, lease, possession, maintenance, use, condition, return or operation of
the Collateral, (iii) the condition of the Collateral sold or otherwise disposed
of after possession by either Borrower, (iv) any patent or copyright
infringement, (v) the conduct of either Borrower, its officers, employees and
agents, (vi) a breach of either Borrower of any of its covenants or obligations
under any Borrower Document and (vii) any claim, loss, cost or expense involving
alleged damage to the environment relating to the Collateral, including, but not
limited to investigation, removal, cleanup and remedial costs. All amounts
payable by Borrowers pursuant to the immediately preceding sentence shall be
paid within ten (10) days after written demand of Lender or Collateral Agent, as
the case may be. This provision shall survive the termination of this Agreement.

 

 
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Section 6.08. Preservation of Existence. Each Borrower will preserve and
maintain its existence and all of its rights, privileges and franchises
necessary or desirable in the normal conduct of its business and shall conduct
its business in an orderly, efficient and regular manner.

 

Section 6.09. Performance by Lender. If either Borrower at any time fails to
perform or observe any of the covenants or agreements contained in any Borrower
Document, and if such failure shall continue for a period of 10 calendar days
after Lender or Collateral Agent gives such Borrower written notice thereof (or
in the case of the agreements contained in Sections 6.06 and 6.07 hereof,
immediately upon the occurrence of such failure, without notice or lapse of
time), Lender or Collateral Agent may, but need not, perform or observe such
covenant on behalf and in the name, place and stead of such Borrower (or, at
Lender’s or Collateral Agent’s option, in Lender’s or Collateral Agent’s name)
and may, but need not, take any and all other actions which Lender or Collateral
Agent may reasonably deem necessary to cure or correct such failure (including,
without limitation, the payment of taxes, the satisfaction of security
interests, liens or encumbrances, the performance of obligations owed to account
debtors or other obligors, the procurement and maintenance of insurance, the
execution of assignments, security agreements and financing statements, and the
endorsement of instruments); and Borrowers shall thereupon pay to Lender and
Collateral Agent within ten (10) days after written demand the amount of all
moneys expended and all costs and expenses (including reasonable attorneys’ fees
and legal expenses) incurred by Lender or Collateral Agent in connection with or
as a result of the performance or observance of such agreements or the taking of
such action by Lender or Collateral Agent, together with interest thereon from
the date expended or incurred at the lesser of 10% per annum or the highest rate
permitted by law. To facilitate the performance or observance by Lender and
Collateral Agent of such covenants of Borrowers, each Borrower hereby
irrevocably appoints Lender and Collateral Agent, or the delegate of Lender or
Collateral Agent, acting alone, as the attorney in fact of such Borrower with
the right (but not the duty) from time to time to create, prepare, complete,
execute, deliver, endorse or file in the name and on behalf of such Borrower any
and all instruments, documents, assignments, security agreements, financing
statements, applications for insurance and other agreements and writings
required to be obtained, executed, delivered or endorsed by such Borrower under
this Agreement.

 

 
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ARTICLE VII

NEGATIVE COVENANTS OF BORROWERS

 

So long as the Loan shall remain unpaid, Borrowers agree that:

 

Section 7.01. Sale of Assets. Neither Borrower will sell, lease, assign,
transfer or otherwise dispose of all or a substantial part of its assets or of
any of the Collateral or any interest therein (whether in one transaction or in
a series of transactions).

 

Section 7.02. Consolidation and Merger. Neither Borrower will consolidate with
or merge into any person, or permit any other person to merge into it or acquire
(in a transaction analogous in purpose or effect to a consolidation or merger)
all or substantially all of the assets of any other person.

 

Section 7.03. Accounting. Neither Borrower will adopt, permit or consent to any
material change in accounting principles other than as required by GAAP. Neither
Borrower will adopt, permit or consent to any change in its fiscal year.

 

Section 7.04. Modifications and Substitutions. Except for the improvements to
the Property located in Pennsylvania as previously disclosed to Lender, neither
Borrower shall make any material alterations, modifications or additions to, or
substitutions of, the Real Estate Collateral without the prior written consent
of Lender (such consent not to be unreasonably withheld or delayed); provided,
however, that any substitutions made pursuant to Borrowers’ obligations to make
repairs referenced under any provision of this Agreement shall not require such
prior written consent. Borrowers shall provide such documents or assurances as
Lender may reasonably request to maintain or confirm the lien in favor of Lender
on the Real Estate Collateral as so altered, modified or substituted.

 

Section 7.05. Use of Property. Unless required by applicable law or unless
Lender has otherwise agreed in writing, neither Borrower shall allow changes in
the use for which all or any part of any Property was intended at the time this
Agreement was executed. Neither Borrower shall, without Lender’s prior written
consent, (a) initiate or acquiesce in a change in the zoning classification
(including any variance under any existing zoning ordinance applicable to any
Property), (b) permit the use of any Property to become a non-conforming use
under applicable zoning ordinances, (c) file any subdivision or parcel map
affecting any Property, or (d) amend, modify or consent to any easement or
covenants, conditions and restrictions pertaining to any Property.

 

 
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ARTICLE VIII

DAMAGE AND DESTRUCTION; CONDEMNATION

 

Section 8.01. Damage and Destruction. Borrowers shall provide a complete written
report to Collateral Agent and Lender immediately upon any loss, theft, damage
or destruction of any Collateral and of any accident involving any Real Estate
Collateral resulting in a loss of at least $350,000. With respect to any Damaged
Collateral, Borrowers shall as soon as practicable after such event either:
(a) replace the same at Borrowers’ sole cost and expense with property having
substantially similar specifications and of equal or greater value to the
Damaged Collateral immediately prior to the time of the loss occurrence, such
replacement property to be subject to Collateral Agent’s and Lender’s approval,
whereupon such replacement property shall be substituted in this Agreement and
the other related documents by appropriate endorsement or amendment; or (b) with
respect to Damaged Collateral involving a loss of at least $350,000, pay the
applicable Damaged Collateral Amount. With respect to Damaged Collateral
involving a loss of at least $350,000, Borrowers shall notify Collateral Agent
and Lender of which course of action it will take within 30 calendar days after
the loss occurrence. If, within 90 calendar days of the loss occurrence,
(a) Borrowers fail to notify Collateral Agent and Lender; (b) Borrowers,
Collateral Agent and Lender fail to execute an amendment to this Agreement and
any related document to delete the Damaged Collateral and add the replacement
property or (c) Borrowers fail to pay the applicable Damaged Collateral Amount,
then Lender may, at its sole discretion, declare the applicable Damaged
Collateral Amount to be immediately due and payable, and Borrowers are required
to pay the same. The Net Proceeds of insurance with respect to the Damaged
Collateral shall be made available by Collateral Agent to be applied to
discharge Borrowers’ obligation under this Section. The payment of the Damaged
Collateral Amount and the termination of Collateral Agent’s interest in the
Damaged Collateral is subject to the terms of Section 2.07 hereof. For purposes
of this Section, the term “Net Proceeds” shall mean the amount remaining from
the gross proceeds of any insurance claim after deducting all expenses
(including reasonable attorneys’ fees) incurred in the collection of such claim.

 

Section 8.02. Condemnation. If the Real Estate Collateral, or any part thereof
with a book value in excess of $350,000, shall be condemned for any reason,
including without limitation fire or earthquake damage, or otherwise taken for
public or quasi-public use under the power of eminent domain, or be transferred
in lieu thereof, all damages or other amounts awarded for the taking of, or
injury to, the Real Estate Collateral shall be paid to Collateral Agent who
shall have the right, in its sole and absolute discretion, to apply the amounts
so received against (a) the costs and expenses of Collateral Agent and Lender,
including reasonable attorneys’ fees incurred in connection with collection of
such amounts, and (b) the balance against the amounts due hereunder; provided,
however, that if (i) no Event of Default shall have occurred and be continuing
hereunder, (ii) Borrowers provide evidence satisfactory to Collateral Agent and
Lender of its ability to pay all amounts becoming due hereunder during the
pendency of any restoration or repairs to or replacement of the Real Estate
Collateral, (iii) Collateral Agent determines, in its sole discretion, that the
proceeds of such award are sufficient to restore, repair, replace and rebuild
the Real Estate Collateral as nearly as possible to its value, condition and
character immediately prior to such taking (or, if the proceeds of such award
are insufficient for such purpose, if Borrowers provide additional sums to
Collateral Agent’s satisfaction so that the aggregate of such sums and the
proceeds of such award will be sufficient for such purpose), and (iv) Borrowers
provide evidence satisfactory to Collateral Agent in its sole but reasonable
discretion that none of the tenants of such Property will terminate their lease
agreements as a result of either the condemnation or taking or the repairs to or
replacement of the Real Estate Collateral, the proceeds of such award, together
with additional sums provided by Borrowers, shall be placed in a separate
account for the benefit of Collateral Agent and Borrowers to be used to restore,
repair, replace and rebuild the Real Estate Collateral as nearly as possible to
its value, condition and character immediately prior to such taking. All work to
be performed in connection therewith shall be pursuant to a written contract
therefor, which contract shall be subject to the prior approval of Collateral
Agent. To the extent that any funds remain after the Real Estate Collateral has
been so restored and repaired, the same shall be applied against the amounts due
hereunder in such order as Collateral Agent and Lender may elect. To enforce
their rights hereunder, Collateral Agent and Lender shall be entitled to
participate in and control any condemnation proceedings relating to any portion
of the Real Estate Collateral with a book value of at least $350,000 and to be
represented therein by counsel of their own choice, and Borrowers will deliver,
or cause to be delivered to Collateral Agent and Lender such instruments as may
be requested by them from time to time to permit such participation. In the
event Lender, as a result of any such judgment, decree or award, believes in its
sole but reasonable discretion that the payment or performance of the Loan is
impaired, Lender may declare all of the amounts due hereunder immediately due
and payable.

 

 
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ARTICLE IX

ASSIGNMENT, SUBLEASING AND SELLING

 

Section 9.01. Assignment by Lender. This Agreement, and the obligations of
Borrowers to make payments hereunder, may be assigned and reassigned in whole or
in part to one or more assignees or subassignees by Lender at any time
subsequent to its execution, without the necessity of obtaining the consent of
either Borrower; provided, however, that no such assignment or reassignment
shall be effective unless and until Borrowers shall have received notice of the
assignment or reassignment disclosing the name and address of the assignee or
subassignee. Upon receipt of notice of assignment, Borrowers shall agree to make
all payments to the assignee designated in the notice of assignment,
notwithstanding any claim, defense, setoff or counterclaim whatsoever (whether
arising from a breach of this Agreement or otherwise) that Borrowers may from
time to time have against Lender or the assignee. Borrowers agree to execute all
documents, including notices of assignment and chattel mortgages, which may be
reasonably requested by Lender or its assignee to protect their interest in the
Collateral and in this Agreement.

 

Section 9.02. No Sale or Assignment by Borrowers. This Agreement and the
interest of Borrowers in the Collateral may not be sold, assumed, assigned or
encumbered by Borrowers other than (a) in accordance with Section 7.01 hereof
and (ii) by the lien created hereunder and under the Mortgages, the Permitted
Exceptions and the Permitted Liens.

 

ARTICLE X

EVENTS OF DEFAULT AND REMEDIES

 

Section 10.01. Events of Default. The following constitute “Events of Default”
under this Agreement:

 

(a)     failure by Borrowers to pay to Lender when due any Loan Payment or to
pay any other payment required to be paid hereunder and the continuation of such
failure for a period of 10 days;

 

 
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(b)     failure by Borrowers to maintain insurance on the Collateral in
accordance with Section 6.07 hereof;

 

(c)     failure by Borrowers to comply with the provisions of Section 5.04,
6.01, 7.01 or 7.02 hereof;

 

(d)     failure by any Credit Party to observe and perform any other covenant,
condition or agreement contained in any Loan Document or in any other document
or agreement executed in connection herewith on its part to be observed or
performed for a period of 30 days after written notice is given to such Credit
Party specifying such failure and directing that it be remedied; provided,
however, that, if the failure stated in such notice cannot be corrected within
such 30-day period, Lender will not unreasonably withhold its consent to an
extension of such time if corrective action is instituted by Credit Parties,
within the applicable period and diligently pursued until the default is
corrected;

 

(e)     any Credit Party shall be or become insolvent, or admit in writing its
inability to pay its debts as they mature, or make an assignment for the benefit
of creditors; or any Credit Party shall apply for or consent to the appointment
of any receiver, trustee or similar officer for it or for all or any substantial
part of its property; or such receiver, trustee or similar officer shall be
appointed without the application or consent of such Credit Party; or any Credit
Party shall institute (by petition, application, answer, consent or otherwise)
any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation or similar proceeding relating to it under the laws of
any jurisdiction; or any such proceeding shall be instituted (by petition,
application or otherwise) against any Credit Party; or any judgment, writ,
warrant of attachment or execution or similar process shall be issued or levied
against a substantial part of the property of any Credit Party;

 

(f)     determination by Lender that any representation or warranty made by any
Credit Party in any Loan Document or in any other document executed in
connection herewith was untrue in any material respect when made;

 

(g)     an amendment or termination relating to a filed financing statement
describing any of the Collateral is improperly filed;

 

(h)     the occurrence of an event of default and the expiration of any
applicable notice and cure period under the Revolving Credit Facility or the
Existing Loan Agreement;

 

(i)     the occurrence of an event of default and the expiration of any
applicable notice and cure period under any instrument, agreement or other
document evidencing, relating to or securing any indebtedness or other monetary
obligation of any Credit Party having an aggregate principal amount (including
undrawn committed or available amounts and including amounts owing to all
creditors under any combined or syndicated credit arrangement) of more than
$1,000,000 when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise);

 

 
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(j)     Guarantor shall repudiate, purport to revoke or fail to perform such
Guarantor’s obligations under the Guaranty Agreement;

 

(k)     except as otherwise provided pursuant to Section 7.02 hereof, ownership
of either Borrower changes during the period that the Loan is outstanding (each
Borrower hereby acknowledges that Lender has made its decision to enter into the
transactions contemplated hereby based upon the management expertise of the
current owners and their ownership of such Borrower); and

 

(l)     the occurrence of an event of default and the expiration of any
applicable notice and cure period under any Loan Document or any other agreement
between or among CF and any Credit Party.

 

Section 10.02. Remedies on Default. Whenever an Event of Default described in
Section 10.01(e) hereof shall have occurred, the Prepayment Amount automatically
shall be due and payable, whereupon the Prepayment Amount automatically shall
become and be forthwith due and payable without presentment, notice of dishonor,
protest or further notice of any kind, all of which are hereby expressly waived
by Borrowers. Whenever any Event of Default shall have occurred, Lender and/or
Collateral Agent shall have the right, at its sole option without any further
demand or notice, to take any one or any combination of the following remedial
steps which are accorded to Lender by applicable law:

 

(a)     by notice to either Borrower, declare the Prepayment Amount to be
forthwith due and payable, whereupon the Prepayment Amount shall become and be
forthwith due and payable, without presentment, notice of dishonor, protest or
further notice of any kind, all of which are hereby expressly waived by
Borrowers;

 

(b)     proceed by appropriate court action to enforce specific performance by
Borrowers of the applicable covenants of this Agreement or to recover for the
breach thereof, including the payment of all amounts due from Borrowers.
Borrowers shall pay or repay to Lender and Collateral Agent all costs of such
action or court action, including, without limitation, reasonable attorneys’
fees;

 

(c)     exercise all rights and remedies under any Loan Document and the
Existing Loan Agreement; and

 

(d)     take whatever action at law or in equity that may appear necessary or
desirable to enforce its rights with respect to the Collateral. Borrowers shall
pay or repay to Lender all costs of such action or court action, including,
without limitation, reasonable attorneys’ fees.

 

All proceeds from any disposition of the Collateral shall be applied in the
following manner:

 

FIRST, to pay all proper and reasonable costs and expenses associated with the
recovery, repair, storage and sale of the Collateral, including reasonable
attorneys’ fees and expenses;

 

 
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SECOND, to pay (i) Lender the amount of all unpaid Loan Payments or other
obligations (whether direct or indirect owed by Borrowers to Lender), if any,
which are then due and owing, together with interest and late charges thereon,
(ii) Lender the then applicable Prepayment Amount (taking into account the
payment of past-due Loan Payments as aforesaid), plus a pro rata allocation of
interest, at the rate utilized to calculate the Loan Payments, from the next
preceding due date of a Loan Payment until the date of payment by the buyer, and
(iii) any other amounts due hereunder, including indemnity payments, taxes,
charges, reimbursement of any advances and other amounts payable to Lender or
Collateral Agent hereunder; and

 

THIRD, to pay the remainder of the sale proceeds, purchase moneys or other
amounts paid by a buyer of the Collateral to Borrowers.

 

Notwithstanding any other remedy exercised hereunder, Borrowers shall remain
obligated to pay to Lender any unpaid portion of the Prepayment Amount.

 

Section 10.03. No Remedy Exclusive. No remedy herein conferred upon or reserved
to Lender or Collateral Agent is intended to be exclusive and every such remedy
shall be cumulative and shall be in addition to every other remedy given under
this Agreement or now or hereafter existing at law or in equity. No delay or
omission to exercise any right or power accruing upon any Event of Default shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right or power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle Lender or Collateral Agent to exercise
any remedy reserved to it in this Article, it shall not be necessary to give any
notice other than such notice as may be required by this Article. All remedies
herein conferred upon or reserved to Lender or Collateral Agent shall survive
the termination of this Agreement.

 

Section 10.04. Late Charge; Default Interest. If Lender does not receive from
Borrowers payment in full of any Loan Payment or any other sum due under this
Agreement or any other Loan Document within 10 days after its due date,
Borrowers agree to pay a late fee equal to five percent (5%) on such late Loan
Payment or other sum, but not exceeding any lawful maximum. Such late fee will
be immediately due and payable, and is in addition to any other costs, fees and
expenses that Borrowers may owe as a result of such late payment. Additionally,
if the Loan is accelerated pursuant to Section 10.02 hereof, the amounts due and
owing hereunder shall accrue interest at the lesser of 10% per annum or the
highest rate not prohibited by applicable law from the date of such accelerated
maturity until paid (both before and after any judgment). The application of
such 10% interest rate shall not be interpreted or deemed to extend any cure
period set forth in this Agreement or any other Loan Document, cure any default
or otherwise limit Lender’s or Collateral Agent’s rights or remedies hereunder
or under any Loan Document.

 

 
29

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

 

  

ARTICLE XI

MISCELLANEOUS

 

Section 11.01. Costs and Expenses of Lender and Collateral Agent. Borrowers
shall pay to Lender and Collateral Agent, in addition to the Loan Payments
payable by Borrowers hereunder, such amounts as shall be required by Lender or
Collateral Agent in payment of any reasonable costs and expenses incurred by
Lender or Collateral Agent in connection with the execution, performance or
enforcement of this Agreement, including but not limited to payment of all
reasonable fees, costs and expenses and all administrative costs of Lender or
Collateral Agent in connection with the Collateral, expenses (including, without
limitation, attorneys’ fees and disbursements), fees of auditors or attorneys,
insurance premiums not otherwise paid hereunder and all other direct and
necessary administrative costs of Lender or Collateral Agent or charges required
to be paid by it in order to comply with the terms of, or to enforce its rights
under, this Agreement. Such costs and expenses shall be billed to Borrowers by
Lender or Collateral Agent, as the case may be, from time to time, together with
a statement certifying that the amount so billed has been paid by Lender or
Collateral Agent for one or more of the items above described, or that such
amount is then payable by Lender or Collateral Agent for such items. Amounts so
billed shall be due and payable by Borrowers within 30 days after receipt of the
bill by Borrowers.

 

Section 11.02. Disclaimer of Warranties. LENDER MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR FITNESS FOR USE OF THE
COLLATERAL, OR ANY OTHER WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH
RESPECT THERETO. In no event shall Lender be liable for any loss or damage in
connection with or arising out of this Agreement, the Collateral or the
existence, furnishing, functioning or Borrowers’ use of any item or products or
services provided for in this Agreement.

 

Section 11.03. Notices. All notices, certificates, requests, demands and other
communications provided for hereunder or under any Loan Document shall be in
writing and shall be (a) personally delivered, (b) sent by first class United
States mail, or (c) sent by overnight courier of national reputation, in each
case addressed to the party to whom notice is being given at its address as set
forth above or, as to each party, at such other address as may hereafter be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section. All such notices, requests, demands and
other communications shall be deemed to have been given on (a) the date received
if personally delivered, (b) when deposited in the mail if delivered by mail, or
(c) the date sent if sent by overnight courier. If notice to Borrowers of any
intended disposition of the Collateral or any other intended action is required
by law in a particular instance, such notice shall be deemed commercially
reasonable if given (in the manner specified in this Section) at least 10
calendar days prior to the date of intended disposition or other action.

 

Section 11.04. Further Assurance and Corrective Instruments. Borrowers hereby
agree that they will, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such further acts,
instruments, conveyances, transfers and assurances, as Lender or Collateral
Agent reasonably deems necessary or advisable for the implementation,
correction, confirmation or perfection of any Borrower Document and any rights
of Lender or Collateral Agent thereunder.

 

 
30

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

 

  

Section 11.05. Binding Effect; Time of the Essence. This Agreement shall inure
to the benefit of and shall be binding upon Lender, Borrowers and their
respective successors and assigns. Time is of the essence.

 

Section 11.06. Severability. In the event any provision of this Agreement shall
be held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.

 

Section 11.07. Amendments. To the extent permitted by law, the terms of this
Agreement shall not be waived, altered, modified, supplemented or amended in any
manner whatsoever except by written instrument signed by the parties hereto, and
then such waiver, consent, modification or change shall be effective only in the
specific instance and for the specific purpose given.

 

Section 11.08. Execution in Counterparts. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute one and the same instrument, and any of the parties hereto may
execute this Agreement by signing any such counterpart.

 

Section 11.09. Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York (excluding choice-of-law
principles).

 

Section 11.10. Captions. The captions or headings in this Agreement are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Agreement.

 

Section 11.11. Entire Agreement. The Borrower Documents and all exhibits thereto
constitute the entire agreement between Lender and Borrowers. There are no
understandings, agreements, representations or warranties, express or implied,
not specified herein or in such documents regarding this Agreement or the
Properties.

 

Section 11.12. Usury. It is the intention of the parties hereto to comply with
any applicable usury laws; accordingly, it is agreed that, notwithstanding any
provisions to the contrary in this Agreement, in no event shall this Agreement
require the payment or permit the collection of interest or any amount in the
nature of interest or fees in excess of the maximum permitted by applicable law.

 

Section 11.13. Limitations of Liability. In no event, whether as a result of
breach of contract, warranty, tort (including negligence or strict liability),
indemnity or otherwise, shall Lender, its assignees, if any, or Collateral Agent
be liable for any special, consequential, incidental, punitive or penal damages,
including, but not limited to, loss of profit or revenue, loss of use of the
Collateral, service materials or software, damage to associated equipment,
service materials or software, cost of capital, cost of substitute property,
service materials or software, facilities, services or replacement power or
downtime costs.

 

 
31

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

 

  

Section 11.14. Waiver of Jury Trial. lender, COLLATERAL AGENT and borrowerS
hereby waive their respective rights to a jury trial of any claim or cause of
action based upon or arising out of, directly or indirectly, this agreement, any
borrower document, any of the related documents, any dealings AMONG lender,
COLLATERAL AGENT or borrowerS relating to the subject matter of the transactions
contemplated by this agreement, any borrower document or any related
transactions, and/or the relationship that is being established AMONG lender,
COLLATERAL AGENT and borrowerS. the scope of this waiver is intended to be all
encompassing of any and all disputes that may be filed in any court (including,
without limitation, contract claims, tort claims, breach of duty claims and all
other common law and statutory claims). this waiver is irrevocable, meaning that
it may not be modified either orally or in writing, and this waiver shall apply
to any subsequent amendments, renewals, supplements or modifications to this
agreement, any borrower document, any related documents, or to any other
documents or agreements relating to the transactions contemplated by this
agreement, any borrower document or any related transactions. in the event of
litigation, this agreement may be filed as a written consent to a trial by the
court.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK; EXECUTION PAGE FOLLOWS.]

 

 
32

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

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in their
respective corporate names by their duly authorized officers, all as of the date
first written above.

 

Lender and Collateral Agent:

CF EQUIPMENT LOANS, LLC, as lender and as collateral agent

 

 

 

 

 

       

 

 

 

 

 

By:

 

 

 

Title:

Authorized Representative

 

 

 

 

 

        Borrowers:    APIO, INC.                             By:       Title:
Vice President                             APIO COOLING A CALIFORNIA LIMITED
PARTNERSHIP             By: Apio, Inc., its general partner          

 

  By:           Title:  Vice President  

 

 

 

[EXECUTION PAGE OF LOAN AGREEMENT]

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

 

 

Annex I to Loan Agreement

 

NOTICE ADDRESSES

 

Lender

 

CF Equipment Loans, LLC

230 Schilling Circle

Suite 300

Hunt Valley, MD 21031 

 

Borrowers

 

Apio, Inc.

4575 W. Main St.; P.O. Box 727

Guadalupe, CA 93434

Attn: Jeffery S. Kraetsch

Corporate Controller

Facsimile: (805) 249-6239

 

Apio Cooling A California Limited Partnership

 

c/o Apio, Inc.

4575 W. Main St.; P.O. Box 727

Guadalupe, CA 93434

Attn: Jeffery S. Kraetsch

Corporate Controller

Facsimile: (805) 249-6239

 

 
 

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

 

  

Exhibit A-1 to Loan Agreement

 

SCHEDULE OF PRINCIPAL PORTIONS OF LOAN PAYMENTS (Real Estate Note)

 

 

payment

     

no.

Payment Date

principal

balance 

         

2/26/2016

 

   7,686,000.00

 

3/1/2016

                        -

   7,686,000.00

1

4/1/2016

         32,025.00

   7,653,975.00

2

5/1/2016

         32,025.00

   7,621,950.00

3

6/1/2016

         32,025.00

   7,589,925.00

4

7/1/2016

         32,025.00

   7,557,900.00

5

8/1/2016

         32,025.00

   7,525,875.00

6

9/1/2016

         32,025.00

   7,493,850.00

7

10/1/2016

         32,025.00

   7,461,825.00

8

11/1/2016

         32,025.00

   7,429,800.00

9

12/1/2016

         32,025.00

   7,397,775.00

10

1/1/2017

         32,025.00

   7,365,750.00

11

2/1/2017

         32,025.00

   7,333,725.00

12

3/1/2017

         32,025.00

   7,301,700.00

13

4/1/2017

         32,025.00

   7,269,675.00

14

5/1/2017

         32,025.00

   7,237,650.00

15

6/1/2017

         32,025.00

   7,205,625.00

16

7/1/2017

         32,025.00

   7,173,600.00

17

8/1/2017

         32,025.00

   7,141,575.00

18

9/1/2017

         32,025.00

   7,109,550.00

19

10/1/2017

         32,025.00

   7,077,525.00

20

11/1/2017

         32,025.00

   7,045,500.00

21

12/1/2017

         32,025.00

   7,013,475.00

22

1/1/2018

         32,025.00

   6,981,450.00

23

2/1/2018

         32,025.00

   6,949,425.00

24

3/1/2018

         32,025.00

   6,917,400.00

25

4/1/2018

         32,025.00

   6,885,375.00

26

5/1/2018

         32,025.00

   6,853,350.00

27

6/1/2018

         32,025.00

   6,821,325.00

28

7/1/2018

         32,025.00

   6,789,300.00

29

8/1/2018

         32,025.00

   6,757,275.00

30

9/1/2018

         32,025.00

   6,725,250.00

31

10/1/2018

         32,025.00

   6,693,225.00

32

11/1/2018

         32,025.00

   6,661,200.00

  

 
 

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

 

 

33

12/1/2018

         32,025.00

   6,629,175.00

34

1/1/2019

         32,025.00

   6,597,150.00

35

2/1/2019

         32,025.00

   6,565,125.00

36

3/1/2019

         32,025.00

   6,533,100.00

37

4/1/2019

         32,025.00

   6,501,075.00

38

5/1/2019

         32,025.00

   6,469,050.00

39

6/1/2019

         32,025.00

   6,437,025.00

40

7/1/2019

         32,025.00

   6,405,000.00

41

8/1/2019

         32,025.00

   6,372,975.00

42

9/1/2019

         32,025.00

   6,340,950.00

43

10/1/2019

         32,025.00

   6,308,925.00

44

11/1/2019

         32,025.00

   6,276,900.00

45

12/1/2019

         32,025.00

   6,244,875.00

46

1/1/2020

         32,025.00

   6,212,850.00

47

2/1/2020

         32,025.00

   6,180,825.00

48

3/1/2020

         32,025.00

   6,148,800.00

49

4/1/2020

         32,025.00

   6,116,775.00

50

5/1/2020

         32,025.00

   6,084,750.00

51

6/1/2020

         32,025.00

   6,052,725.00

52

7/1/2020

         32,025.00

   6,020,700.00

53

8/1/2020

         32,025.00

   5,988,675.00

54

9/1/2020

         32,025.00

   5,956,650.00

55

10/1/2020

         32,025.00

   5,924,625.00

56

11/1/2020

         32,025.00

   5,892,600.00

57

12/1/2020

         32,025.00

   5,860,575.00

58

1/1/2021

         32,025.00

   5,828,550.00

59

2/1/2021

         32,025.00

   5,796,525.00

60

3/1/2021

         32,025.00

   5,764,500.00

61

4/1/2021

         32,025.00

   5,732,475.00

62

5/1/2021

         32,025.00

   5,700,450.00

63

6/1/2021

         32,025.00

   5,668,425.00

64

7/1/2021

         32,025.00

   5,636,400.00

65

8/1/2021

         32,025.00

   5,604,375.00

66

9/1/2021

         32,025.00

   5,572,350.00

67

10/1/2021

         32,025.00

   5,540,325.00

68

11/1/2021

         32,025.00

   5,508,300.00

69

12/1/2021

         32,025.00

   5,476,275.00

70

1/1/2022

         32,025.00

   5,444,250.00

71

2/1/2022

         32,025.00

   5,412,225.00

72

3/1/2022

         32,025.00

   5,380,200.00

73

4/1/2022

         32,025.00

   5,348,175.00

74

5/1/2022

         32,025.00

   5,316,150.00

75

6/1/2022

         32,025.00

   5,284,125.00

  

 
 

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

 

 

76

7/1/2022

         32,025.00

   5,252,100.00

77

8/1/2022

         32,025.00

   5,220,075.00

78

9/1/2022

         32,025.00

   5,188,050.00

79

10/1/2022

         32,025.00

   5,156,025.00

80

11/1/2022

         32,025.00

   5,124,000.00

81

12/1/2022

         32,025.00

   5,091,975.00

82

1/1/2023

         32,025.00

   5,059,950.00

83

2/1/2023

         32,025.00

   5,027,925.00

84

3/1/2023

         32,025.00

   4,995,900.00

85

4/1/2023

         32,025.00

   4,963,875.00

86

5/1/2023

         32,025.00

   4,931,850.00

87

6/1/2023

         32,025.00

   4,899,825.00

88

7/1/2023

         32,025.00

   4,867,800.00

89

8/1/2023

         32,025.00

   4,835,775.00

90

9/1/2023

         32,025.00

   4,803,750.00

91

10/1/2023

         32,025.00

   4,771,725.00

92

11/1/2023

         32,025.00

   4,739,700.00

93

12/1/2023

         32,025.00

   4,707,675.00

94

1/1/2024

         32,025.00

   4,675,650.00

95

2/1/2024

         32,025.00

   4,643,625.00

96

3/1/2024

         32,025.00

   4,611,600.00

97

4/1/2024

         32,025.00

   4,579,575.00

98

5/1/2024

         32,025.00

   4,547,550.00

99

6/1/2024

         32,025.00

   4,515,525.00

100

7/1/2024

         32,025.00

   4,483,500.00

101

8/1/2024

         32,025.00

   4,451,475.00

102

9/1/2024

         32,025.00

   4,419,450.00

103

10/1/2024

         32,025.00

   4,387,425.00

104

11/1/2024

         32,025.00

   4,355,400.00

105

12/1/2024

         32,025.00

   4,323,375.00

106

1/1/2025

         32,025.00

   4,291,350.00

107

2/1/2025

         32,025.00

   4,259,325.00

108

3/1/2025

         32,025.00

   4,227,300.00

109

4/1/2025

         32,025.00

   4,195,275.00

110

5/1/2025

         32,025.00

   4,163,250.00

111

6/1/2025

         32,025.00

   4,131,225.00

112

7/1/2025

         32,025.00

   4,099,200.00

113

8/1/2025

         32,025.00

   4,067,175.00

114

9/1/2025

         32,025.00

   4,035,150.00

115

10/1/2025

         32,025.00

   4,003,125.00

116

11/1/2025

         32,025.00

   3,971,100.00

117

12/1/2025

         32,025.00

   3,939,075.00

118

1/1/2026

         32,025.00

   3,907,050.00

  

 
 

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

 

 

119

2/1/2026

         32,025.00

   3,875,025.00

120

3/1/2026

         32,025.00

   3,843,000.00

120

3/1/2026

   3,843,000.00

                        -

   

----------

     

   7,686,000.00

 

  

 
 

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

 

  

Exhibit A-2 to Loan Agreement

 

SCHEDULE OF PRINCIPAL PORTIONS OF LOAN PAYMENTS (Equipment Note)

 

 

 

payment

     

No.

Payment Date

principal

balance

         

2/26/2016

 

   9,089,389.88

 

3/1/2016

                        -

   9,089,389.88

1

4/1/2016

       108,207.02

   8,981,182.86

2

5/1/2016

       108,207.02

   8,872,975.84

3

6/1/2016

       108,207.02

   8,764,768.82

4

7/1/2016

       108,207.02

   8,656,561.80

5

8/1/2016

       108,207.02

   8,548,354.78

6

9/1/2016

       108,207.02

   8,440,147.76

7

10/1/2016

       108,207.02

   8,331,940.74

8

11/1/2016

       108,207.02

   8,223,733.72

9

12/1/2016

       108,207.02

   8,115,526.70

10

1/1/2017

       108,207.02

   8,007,319.68

11

2/1/2017

       108,207.02

   7,899,112.66

12

3/1/2017

       108,207.02

   7,790,905.64

13

4/1/2017

       108,207.02

   7,682,698.62

14

5/1/2017

       108,207.02

   7,574,491.60

15

6/1/2017

       108,207.02

   7,466,284.58

16

7/1/2017

       108,207.02

   7,358,077.56

17

8/1/2017

       108,207.02

   7,249,870.54

18

9/1/2017

       108,207.02

   7,141,663.52

19

10/1/2017

       108,207.02

   7,033,456.50

20

11/1/2017

       108,207.02

   6,925,249.48

21

12/1/2017

       108,207.02

   6,817,042.46

22

1/1/2018

       108,207.02

   6,708,835.44

23

2/1/2018

       108,207.02

   6,600,628.42

24

3/1/2018

       108,207.02

   6,492,421.40

25

4/1/2018

       108,207.02

   6,384,214.38

26

5/1/2018

       108,207.02

   6,276,007.36

27

6/1/2018

       108,207.02

   6,167,800.34

28

7/1/2018

       108,207.02

   6,059,593.32

29

8/1/2018

       108,207.02

   5,951,386.30

30

9/1/2018

       108,207.02

   5,843,179.28

31

10/1/2018

       108,207.02

   5,734,972.26

  

 
 

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

 

 

32

11/1/2018

       108,207.02

   5,626,765.24

33

12/1/2018

       108,207.02

   5,518,558.22

34

1/1/2019

       108,207.02

   5,410,351.20

35

2/1/2019

       108,207.02

   5,302,144.18

36

3/1/2019

       108,207.02

   5,193,937.16

37

4/1/2019

       108,207.02

   5,085,730.14

38

5/1/2019

       108,207.02

   4,977,523.12

39

6/1/2019

       108,207.02

   4,869,316.10

40

7/1/2019

       108,207.02

   4,761,109.08

41

8/1/2019

       108,207.02

   4,652,902.06

42

9/1/2019

       108,207.02

   4,544,695.04

43

10/1/2019

       108,207.02

   4,436,488.02

44

11/1/2019

       108,207.02

   4,328,281.00

45

12/1/2019

       108,207.02

   4,220,073.98

46

1/1/2020

       108,207.02

   4,111,866.96

47

2/1/2020

       108,207.02

   4,003,659.94

48

3/1/2020

       108,207.02

   3,895,452.92

49

4/1/2020

       108,207.02

   3,787,245.90

50

5/1/2020

       108,207.02

   3,679,038.88

51

6/1/2020

       108,207.02

   3,570,831.86

52

7/1/2020

       108,207.02

   3,462,624.84

53

8/1/2020

       108,207.02

   3,354,417.82

54

9/1/2020

       108,207.02

   3,246,210.80

55

10/1/2020

       108,207.02

   3,138,003.78

56

11/1/2020

       108,207.02

   3,029,796.76

57

12/1/2020

       108,207.02

   2,921,589.74

58

1/1/2021

       108,207.02

   2,813,382.72

59

2/1/2021

       108,207.02

   2,705,175.70

60

3/1/2021

       108,207.02

   2,596,968.68

60

3/1/2021

   2,596,968.68

                    0.00

   

----------

     

   9,089,389.88

 

  

 
B-2

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

 

  

Exhibit B to Loan Agreement

 

LIST OF EQUIPMENT COLLATERAL

 

[SEE ATTACHED]

 

 
 

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

 

  

Exhibit C to Loan Agreement

 

FORM OF CERTIFICATE OF CHIEF FINANCIAL OFFICER

 

I, the undersigned, hereby certify that I am the duly qualified and acting chief
financial officer of Landec Corporation (“Guarantor”) and, with respect to
Section [6.01(a)/6.01(b)] of the Loan Agreement dated as of February 26, 2016
(the “Agreement”) by and between Borrowers named therein and CF Equipment Loans,
LLC, as lender and as collateral agent, that:

 

 

1.

The attached financial statements have been prepared in accordance with GAAP.

        2.  I have no knowledge of any Default or Event of Default under the
Agreement.

      

 

 

Dated: _________ __, 20__.

 

Guarantor: 

LANDEC CORPORATION

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

Title:

Chief Financial Officer

 

 

Date:

 

 

     

 
 

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

 

 

Exhibit D to Loan Agreement

 

PAY PROCEEDS SCHEDULE

 

 

[SEE ATTACHED]

 

 
 

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

 

 

SCHEDULE 5.03

 

LIST OF BORROWERS’ CHIEF EXECUTIVE OFFICES AND PRINCIPAL

EXECUTIVE OFFICES

 

Apio, Inc.

4575 W. Main St. Guadalupe, CA 93434 (Chief Executive Office)

Apio, Inc.

P.O. Box 727, Guadalupe, California 93434 (Principal Mailing Address)

Cal Ex Trading Company

4575 W. Main St. Guadalupe, CA 93434 (Chief Executive Office and Principal
Mailing Address)