Exhibit 10.3
 
PLEDGE AGREEMENT
 
THIS PLEDGE AGREEMENT (as the same may be amended, restated, supplemented or
otherwise modified from time to time, this “Agreement”) dated as of April 23,
2012, is made by LANDEC CORPORATION, a Delaware corporation ( “Pledgor”), in
favor of GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as agent
(in such capacity, “Agent”), for the benefit of Secured Parties (as defined in
the Credit Agreement), from time to time party to the Credit Agreement referred
to below.
 
RECITALS
 
A.           Pursuant to the Credit Agreement dated as of April 23, 2012 (as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), by and among by Apio, Inc., a Delaware
corporation (“Apio”), Cal Ex Trading Company, a Delaware corporation (“Cal Ex”),
GreenLine Logistics, Inc., an Ohio corporation (“GLI”) (Apio and Cal Ex being
referred to collectively as “Borrowers” and individually as a “Borrower”), the
several financial institutions from time to time party thereto (collectively,
the “Lenders”) and Agent, the Lenders have severally agreed to make extensions
of credit to the Borrowers upon the terms and subject to the conditions set
forth therein.
 
B.           Pledgor is the record and beneficial owner of the shares of Stock
(as defined in the Credit Agreement) of Apio listed as owned by it on Schedule I
hereto.  As such, Pledgor will derive substantial direct and indirect benefits
from the making of the extensions of credit under the Credit Agreement.
 
C.           In order to induce Agent and Lenders to enter into the Credit
Agreement and the other Loan Documents and to induce Lenders to make the
financial accommodations as provided for in the Credit Agreement, Pledgor has
agreed to pledge the Pledged Collateral (as hereinafter defined) to Agent, for
the benefit of Secured Parties, in accordance herewith.  These Recitals shall be
construed as part of this Agreement.
 
AGREEMENT
 
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor and Agent agree as
follows:
 
1.           Definitions.  Unless otherwise defined herein, capitalized terms or
matters of construction defined or established in the Credit Agreement shall be
applied herein as defined or established therein, and the following terms shall
have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
 
“Additional Stock” shall have the meaning assigned to it in Section 2.
 
“Pledged Collateral” shall have the meaning assigned to it in Section 2.
 
“Pledged Stock” shall mean those shares of or interests in Stock listed in
Schedule I.
 
“Secured Obligations” shall have the meaning assigned to it in Section 3.
 
 
 

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“Uniform Commercial Code Jurisdiction” means any jurisdiction that has adopted
all or substantially all of Article 9 as contained in the 2000 Official Text of
the Uniform Commercial Code, as recommended by the National Conference of
Commissioners on Uniform State Laws and the American Law Institute, together
with any subsequent amendments or modifications to the Official Text.
 
2.           Pledge.  Pledgor hereby pledges, grants, bargains, assigns,
transfers, conveys, mortgages and hypothecates to Agent, for the benefit of
Secured Parties, a first priority Lien on all of its right, title and interest
in and to all of the following (collectively, the “Pledged Collateral”):
 
(a)           the Pledged Stock and the certificates, if any, representing the
Pledged Stock, and all dividends, distributions, cash, instruments and other
property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged Stock;
 
(b)           any additional shares of or interests in Stock of Apio from time
to time acquired by it in any manner after the date hereof (which shares or
interests shall be deemed to be part of the Pledged Stock owned by Pledgor)
(collectively, the “Additional Stock”), and the certificates, if any,
representing such Additional Stock, and all dividends, distributions, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Additional Stock; and
 
(c)           to the extent not otherwise included, all proceeds and products of
any and all of the foregoing.
 
3.           Security for Obligations.
 
(a)           This Agreement secures, and the Pledged Collateral is security
for, the prompt payment in full when due, whether at stated maturity, by
acceleration or otherwise, and performance of the Obligations, including all
obligations of Pledgor now or hereafter existing under this Agreement, together
with all fees, costs and expenses whether in connection with collection actions
hereunder or otherwise in connection with the Obligations (collectively, the
“Secured Obligations”).
 
(b)           Notwithstanding any contrary term or provision contained herein,
Agent’s and Lenders’ sole recourse against Pledgor shall be limited to the
Pledged Collateral pledged by each of them hereunder, and Pledgor shall not have
any personal liability hereunder in the event that the Pledged Collateral proves
to be insufficient to satisfy the Secured Obligations.
 
4.           Limitations on Agent’s Obligations.  Agent shall not have any
obligation or liability by reason of or arising out of this Agreement or the
receipt by Agent of any payment relating to any Pledged Collateral pursuant
hereto (other than to return all or a portion of such payment if either Agent or
Pledgor would be required by law to do so), nor shall Agent be obligated in any
manner to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to Agent or to which it may be entitled at any time or times, pursuant
to this Agreement.
 
 
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5.           Delivery of Pledged Collateral.  All stock certificates and other
instruments evidencing the Pledged Collateral shall, from time to time, be
delivered to and held by or on behalf of Agent, for the benefit of Secured
Parties, pursuant hereto.  All Pledged Stock shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to Agent.
 
6.           Representations and Warranties.  Pledgor represents and warrants to
Agent that:
 
(a)           Pledgor is, and at the time of delivery of the Pledged Stock to
Agent will be, the sole holder of record and the sole beneficial owner of the
Pledged Collateral free and clear of any Lien thereon or affecting the title
thereto, except for any Lien created by this Agreement or the other Loan
Documents;
 
(b)           All of the Pledged Stock owned by Pledgor has been duly
authorized, validly issued and is fully paid and nonassessable;
 
(c)           Pledgor has the right and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged Collateral pledged by it to
Agent as provided herein;
 
(d)           None of the Pledged Stock has been issued or transferred in
violation of the securities registration, securities disclosure or similar laws
of any jurisdiction to which such issuance or transfer may be subject;
 
(e)           Pledgor is the sole owner of the Pledged Stock and the Pledged
Stock is presently represented by the certificates listed in Schedule I.  As of
the date hereof, there are no existing options, warrants, calls or commitments
of any character whatsoever relating to the Pledged Stock pledged by Pledgor
hereunder;
 
(f)           Other than this Agreement, Pledgor is not subject to any voting
agreement or any other agreement in respect of its rights in connection with the
Pledged Stock;
 
(g)           No consent, approval, authorization or other order or other action
by, and no notice to or filing with, any Governmental Authority or any other
Person is required (i) for the pledge by Pledgor of the Pledged Collateral
pursuant to this Agreement or for the execution, delivery or performance of this
Agreement by it, or (ii) for the exercise by Agent of the voting or other rights
provided for in this Agreement or the remedies in respect of the Pledged
Collateral pursuant to this Agreement, except as may be required in connection
with such disposition by laws affecting the offering and sale of securities
generally;
 
(h)           The pledge, assignment and delivery of the Pledged Collateral
pursuant to this Agreement, together with the filing of appropriate UCC
financing statements describing the Pledged Collateral with the Secretary of
State of the jurisdiction identified as Pledgor’s jurisdiction on Schedule III
hereto, will create a valid first priority Lien on and a first priority
perfected security interest in favor of Agent, for the benefit of Secured
Parties, upon the Pledged Collateral and the proceeds thereof, securing the
payment of the Secured Obligations, subject to no other Lien except for any Lien
created by this Agreement or the other Loan Documents;
 
(i)           This Agreement has been duly authorized, executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable against Pledgor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors’ right generally or by equitable
principles relating to enforceability;
 
 
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(j)           The Pledged Stock constitutes such percentage of the issued and
outstanding shares of Stock of Apio as is listed in Schedule I; and
 
(k)           Pledgor’s name, jurisdiction of organization and organizational
number is as stated in Schedule III hereto.
 
The representations and warranties set forth in this Section 6 shall survive the
execution and delivery of this Agreement.
 
7.           Covenants.  Pledgor covenants and agrees that:
 
(a)           Without the prior written consent of Agent, it will not sell,
assign, transfer, pledge, or otherwise encumber any of its rights in or to any
Pledged Collateral, or any unpaid dividends, interest or other distributions or
payments with respect to the Pledged Collateral;
 
(b)           Pledgor will, at its expense, upon the request of Agent, promptly
take all actions deemed necessary or desirable by Agent, from time to time, in
order to protect and perfect and maintain the validity, effectiveness and
priority of the Lien in favor of Agent, for the benefit of Secured Parties, upon
the Pledged Collateral, including the filing of any necessary UCC financing
statements or the equivalent, which may be filed by Agent without the signature
of Pledgor, and will cooperate with Agent, at Pledgor’s expense, in obtaining
all necessary approvals and making all necessary filings under federal, state,
local or foreign law in connection with such Liens or any sale or transfer of
the Pledged Collateral;
 
(c)           Pledgor has and will defend the title to the Pledged Collateral
and the Liens of Agent in the Pledged Collateral against the claim of any Person
and will maintain and preserve such Liens;
 
(d)           Pledgor will, upon obtaining ownership of any Additional Stock or
any other instruments received, receivable or otherwise distributed in respect
of or in exchange for any Pledged Stock (and in any event within three Business
Days after it acquires any such Additional Stock or other instruments) deliver
to Agent a Pledge Amendment, duly executed by Pledgor, in substantially the form
of Schedule II (each, a “Pledge Amendment”), in respect of any such Additional
Stock or other instruments, pursuant to which Pledgor shall deliver and pledge
to Agent all of such Additional Stock or other instruments.  Pledgor hereby
authorizes Agent to attach each such Pledge Amendment to this Agreement and
agrees that all Pledged Stock listed in any such Pledge Amendment and delivered
to Agent concurrently with Pledgor’s delivery of such Pledge Amendment shall for
all purposes hereunder be considered Pledged Collateral;
 
(e)           Pledgor shall comply in all respects with the terms and conditions
of all contracts and agreements relating to the Pledged Collateral, none of
which may be amended, supplemented or otherwise modified by Pledgor without the
prior written consent of Agent; and
 
 
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(f)           Pledgor will not change its jurisdiction of incorporation without
first giving Agent ten days’ written notice thereof.
 
8.           Pledgor’s Rights.  So long as no Event of Default shall have
occurred and be continuing and until written notice shall be given to Pledgor in
accordance with Section 9(a):
 
(a)           Pledgor shall have the right, from time to time, to vote and give
consents with respect to the Pledged Collateral pledged by it hereunder or any
part thereof for all purposes not inconsistent with the provisions of this
Agreement, the Credit Agreement or any other Loan Document; provided, that no
vote shall be cast, and no consent shall be given or action taken, that would
have the effect of impairing the position or interest of Agent in respect of the
Pledged Collateral or that would authorize, effect or consent to (unless and to
the extent expressly permitted by the Credit Agreement):
 
(i)           the dissolution, liquidation or winding down of affairs, in whole
or in part, of Apio;
 
(ii)          the consolidation or merger of Apio with any other Person;
 
(iii)         the sale, disposition or encumbrance of all or substantially all
of the assets of Apio, except for Liens in favor of Agent;
 
(iv)         (A) any change in the authorized number of shares, the stated
capital or the authorized share capital of, or the interests in, Apio, or
(B) the issuance of any additional shares of or interests in Stock of Apio; or
 
(v)          the alteration of the voting rights with respect to the Pledged
Stock.
 
(b)           Pledgor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends, distributions and interest paid in
respect of the Pledged Stock pledged by it hereunder to the extent not in
violation of the Credit Agreement, except for any and all: (i) dividends,
distributions and interest paid or payable other than in cash in respect of the
Pledged Collateral, instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, the Pledged Collateral;
(ii) dividends and other distributions paid or payable in cash in respect of the
Pledged Stock in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in capital
of Apio; and (iii) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Pledged Collateral;
provided, that until actually paid all rights to such distributions shall remain
subject to the Lien in favor of Agent created by this Agreement and the other
Loan Documents.
 
(c)           All dividends, distributions and interest (other than such cash
dividends, distributions and interest as are permitted to be paid to Pledgor in
accordance with clause (b) above) in respect of any of the Pledged Stock
whenever paid or made, shall be delivered to Agent to hold as Pledged Collateral
and shall, if received by Pledgor, be received in trust for the benefit of
Agent, for the benefit of Secured Parties, be segregated from the other property
or funds of Pledgor, and be forthwith delivered to Agent as Pledged Collateral
in the same form as so received (with any necessary endorsements).
 
 
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9.           Defaults and Remedies; Proxy.
 
(a)           Upon the occurrence and during the continuation of any Event of
Default, and concurrently with written notice to Pledgor, Agent (personally or
through an agent) is hereby authorized and empowered to transfer and register in
its name or in the name of its nominee the whole or any part of the Pledged
Collateral pledged by Pledgor hereunder, to exchange certificates or instruments
representing or evidencing the Pledged Collateral for certificates or
instruments of smaller or larger denominations, to exercise the voting and all
other rights as a holder with respect thereto, to collect and receive all cash
dividends, interest, principal and other distributions made thereon, to sell in
one or more sales after ten days’ notice of the time and place of any public
sale or of the time at which a private sale is to take place (which notice
Pledgor agrees is commercially reasonable) the whole or any part of the Pledged
Collateral and to otherwise act with respect to the Pledged Collateral as though
Agent were the outright owner thereof.  Any sale shall be made at a public or
private sale at Agent’s place of business, or at any place to be named in the
notice of sale, either for cash or upon credit or for future delivery at such
price as Agent may deem fair, and Agent may be the purchaser of the whole or any
part of the Pledged Collateral so sold and hold the same thereafter in its own
right free from any claim of Pledgor or any right of redemption.  Each sale
shall be made to the highest bidder, but Agent reserves the right to reject any
and all bids at such sale that, in its discretion, it shall deem
inadequate.  Demands of performance, except as otherwise herein specifically
provided for, notices of sale, advertisements and the presence of property at
sale are hereby waived and any sale hereunder may be conducted by an auctioneer
or any officer or agent of Agent.  PLEDGOR HEREBY REVOKES ALL PREVIOUS PROXIES
WITH REGARD TO THE PLEDGED STOCK AND IRREVOCABLY CONSTITUTES AND APPOINTS AGENT
AS THE PROXY AND ATTORNEY-IN-FACT OF PLEDGOR WITH RESPECT TO THE PLEDGED
COLLATERAL PLEDGED BY PLEDGOR HEREUNDER, INCLUDING, IF ANY EVENT OF DEFAULT
SHALL HAVE OCCURRED AND BE CONTINUING, THE RIGHT TO VOTE THE PLEDGED STOCK OF
PLEDGOR, WITH FULL POWER OF SUBSTITUTION TO DO SO.  THE APPOINTMENT OF AGENT AS
PROXY AND ATTORNEY-IN-FACT IS COUPLED WITH AN INTEREST AND SHALL BE IRREVOCABLE
UNTIL ALL REVOLVING LOAN COMMITMENTS HAVE BEEN TERMINATED AND ALL OBLIGATIONS
HAVE BEEN PAID IN FULL IN CASH.  IN ADDITION TO THE RIGHT TO VOTE THE PLEDGED
STOCK OF PLEDGOR, THE APPOINTMENT OF AGENT AS PROXY AND ATTORNEY-IN-FACT SHALL
INCLUDE, IF ANY EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING, THE
RIGHT TO EXERCISE ALL OTHER RIGHTS, POWERS, PRIVILEGES AND REMEDIES TO WHICH A
HOLDER OF THE PLEDGED STOCK WOULD BE ENTITLED (INCLUDING GIVING OR WITHHOLDING
WRITTEN CONSENTS OF SHAREHOLDERS, CALLING SPECIAL MEETINGS OF SHAREHOLDERS, AND
VOTING AT SUCH MEETINGS).  SUCH PROXY SHALL BE EFFECTIVE, AUTOMATICALLY AND
WITHOUT THE NECESSITY OF ANY ACTION (INCLUDING ANY TRANSFER OF THE PLEDGED STOCK
ON THE RECORD BOOKS OF THE ISSUER THEREOF) BY ANY PERSON (INCLUDING THE ISSUER
OF THE PLEDGED STOCK OR ANY OFFICER OR AGENT THEREOF), UPON THE OCCURRENCE AND
DURING THE CONTINUANCE OF AN EVENT OF DEFAULT.  NOTWITHSTANDING THE FOREGOING,
AGENT SHALL NOT HAVE ANY DUTY TO EXERCISE ANY SUCH RIGHT OR TO PRESERVE THE SAME
AND SHALL NOT BE LIABLE FOR ANY FAILURE TO DO SO OR FOR ANY DELAY IN DOING SO.
 
 
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(b)           If, at the original time or times appointed for the sale of the
whole or any part of the Pledged Collateral, (i) the highest bid, if there is
but one sale, shall be inadequate to discharge in full all the Secured
Obligations, or (ii) the Pledged Collateral is offered for sale in lots, the
highest bid for the lot offered for sale at any of such sales would indicate to
Agent, in its discretion, that the proceeds of the sales of the whole of the
Pledged Collateral would be unlikely to be sufficient to discharge all the
Secured Obligations, then Agent may, on one or more occasions and in its
discretion, postpone any of said sales by public announcement at the time of
sale or the time of previous postponement of sale, and no other notice of such
postponement or postponements of sale need be given, any other notice being
hereby waived; provided, that any sale or sales made after such postponement
shall be after ten days’ notice to Pledgor.
 
(c)           If, following the occurrence and during the continuance of an
Event of Default, Agent in its sole discretion determines that, in connection
with any actual or contemplated exercise of its rights (when permitted under
this Section 9) to sell the whole or any part of the Pledged Collateral
hereunder, it is necessary or advisable to effect a public registration of all
or part of the Pledged Collateral pursuant to the Securities Act of 1933, as
amended (or any similar statute then in effect) (the “Securities Act”), then
Pledgor shall, in an expeditious manner, cause Apio to:
 
(i)           Prepare and file with the Securities and Exchange Commission (the
“Commission”) a registration statement with respect to the Pledged Collateral
and in good faith use commercially reasonable efforts to cause such registration
statement to become and remain effective;
 
(ii)          Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective and
to comply with the provisions of the Securities Act with respect to the sale or
other disposition of the Pledged Collateral covered by such registration
statement whenever Agent shall desire to sell or otherwise dispose of the
Pledged Collateral;
 
(iii)         Furnish to Agent such numbers of copies of a prospectus and a
preliminary prospectus, in conformity with the requirements of the Securities
Act, and such other documents as Agent may request in order to facilitate the
public sale or other disposition by Agent of the Pledged Collateral;
 
(iv)         Use commercially reasonable efforts to register or qualify the
Pledged Collateral covered by such registration statement under such other
securities or blue sky laws of such jurisdictions within the United States and
Puerto Rico as Agent shall request, and do such other reasonable acts and things
as may be required of Pledgor to enable Agent to consummate the public sale or
other disposition by Agent in such jurisdictions of the Pledged Collateral by
Agent;
 
 
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(v)          Furnish, at the request of Agent, on the date that the Pledged
Collateral is delivered to the underwriters for sale pursuant to such
registration or, if the security is not being sold through underwriters, on the
date that the registration statement with respect to the Pledged Collateral
becomes effective, (A) an opinion, dated such date, of the independent counsel
representing such registrant for the purposes of such registration, addressed to
the underwriters, if any, and in the event the Pledged Collateral is not being
sold through underwriters, then to Agent, in customary form and covering matters
of the type customarily covered in such legal opinions; and (B) a comfort
letter, dated such date, from the independent certified public accountants of
such registrant, addressed to the underwriters, if any, and in the event the
Pledged Collateral is not being sold through underwriters, then to Agent, in a
customary form and covering matters of the type customarily covered by such
comfort letters and as the underwriters or Agent shall reasonably request.  The
opinion of counsel referred to above shall additionally cover such other legal
matters with respect to the registration in respect of which such opinion is
being given as Agent may reasonably request.  The comfort letter referred to
above from the independent certified public accountants shall additionally cover
such other financial matters (including information as to the period ending not
more than five Business Days prior to the date of such letter) with respect to
the registration in respect of which such letter is being given as Agent may
reasonably request; and
 
(vi)         Otherwise use commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
security holders, as soon as reasonably practicable but not later than 18 months
after the effective date of such registration statement, an earnings statement
covering the period of at least 12 months beginning with the first full month
after the effective date of such registration statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act.
 
(d)           All expenses incurred in complying with Section 9(c), including
all registration and filing fees (including all expenses incident to filing with
the National Association of Securities Dealers, Inc.), printing expenses, fees
and disbursements of counsel for the registrant, the fees and expenses of
counsel for Agent, expenses of the independent certified public accountants
(including any special audits incident to or required by any such registration)
and expenses of complying with the securities or blue sky laws of any
jurisdictions, shall be paid by Pledgor.
 
(e)           If, at any time when Agent shall determine to exercise its right
to sell the whole or any part of the Pledged Collateral hereunder, the Pledged
Collateral or the part thereof to be sold shall not, for any reason whatsoever,
be effectively registered under the Securities Act (or any similar statute),
then Agent may, in its discretion (subject only to applicable requirements of
law), sell the Pledged Collateral or part thereof by private sale in such manner
and under such circumstances as Agent may deem necessary or advisable, but
subject to the other requirements of this Section 9, and shall not be required
to effect such registration or to cause the same to be effected.  Without
limiting the generality of the foregoing, in any such event, Agent in its
discretion may (1) in accordance with applicable securities laws proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering the Pledged Collateral or part thereof could be or shall have
been filed under the Securities Act (or similar statute), (2) approach and
negotiate with a single possible purchaser to effect such sale, and (3) restrict
such sale to a purchaser who is an accredited investor under the Securities Act
and who will represent and agree that such purchaser is purchasing for its own
account, for investment and not with a view to the distribution or sale of the
Pledged Collateral or any part thereof.  In addition to a private sale as
provided above in this Section 9, if any of the Pledged Collateral shall not be
freely distributable to the public without registration under the Securities Act
(or similar statute) at the time of any proposed sale pursuant to this
Section 9, then Agent shall not be required to effect such registration or cause
the same to be effected but, in its discretion (subject only to applicable
requirements of law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions:
 
 
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(i)           as to the financial sophistication and ability of any Person
permitted to bid or purchase at any such sale;
 
(ii)          as to the contents of legends to be placed upon any certificates
representing the Pledged Collateral sold in such sale, including restrictions on
future transfer thereof;
 
(iii)         as to the representations required to be made by each Person
bidding or purchasing at such sale relating to such Person’s access to financial
information about Pledgor and such Person’s intentions as to the holding of the
Pledged Collateral so sold for investment for its own account and not with a
view to the distribution thereof; and
 
(iv)         as to such other matters as Agent may, in its discretion, deem
necessary or appropriate in order that such sale (notwithstanding any failure so
to register) may be effected in compliance with the Bankruptcy Code and other
laws affecting the enforcement of creditors’ rights and the Securities Act and
all applicable state securities laws.
 
(f)           Pledgor recognizes that Agent may be unable to effect a public
sale of any or all the Pledged Collateral and may be compelled to resort to one
or more private sales thereof in accordance with clause (e) above.  Pledgor also
acknowledges that any such private sale may result in prices and other terms
less favorable to the seller than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall not
be deemed to have been made in a commercially unreasonable manner solely by
virtue of such sale being private.  Agent shall be under no obligation to delay
a sale of any of the Pledged Collateral for the period of time necessary to
permit Apio to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if Pledgor and Apio would
agree to do so.
 
(g)           Pledgor agrees to the maximum extent permitted by applicable law
that following the occurrence and during the continuance of an Event of Default,
it will not at any time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or hereafter in
force in order to prevent or delay the enforcement of this Agreement, or the
absolute sale of the whole or any part of the Pledged Collateral or the
possession thereof by any purchaser at any sale hereunder, and it waives the
benefit of all such laws to the extent it lawfully may do so.  Pledgor agrees
that he, she or it will not interfere with any right, power or remedy of Agent
provided for in this Agreement or now or hereafter existing at law or in equity
or by statute or otherwise, or the exercise or beginning of the exercise by
Agent of any one or more of such rights, powers or remedies.  No failure or
delay on the part of Agent to exercise any such right, power or remedy and no
notice or demand that may be given to or made upon Pledgor by Agent with respect
to any such remedies shall operate as a waiver thereof, or limit or impair
Agent’s right to take any action or to exercise any power or remedy hereunder,
without notice or demand, or prejudice its rights as against Pledgor in any
respect.
 
 
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(h)           Pledgor further agrees that a breach of any of the covenants
contained in this Section 9 will cause irreparable injury to Agent, that Agent
shall have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 9
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that the Secured Obligations are not then
due and payable in accordance with the agreements and nstruments governing and
evidencing the Secured Obligations.
 
10.           Waiver.  No delay on Agent’s part in exercising any power of sale,
Lien, option or other right hereunder, and no notice or demand that may be given
to or made upon Pledgor by Agent with respect to any power of sale, Lien, option
or other right hereunder, shall constitute a waiver thereof, or limit or impair
Agent’s right to take any action or to exercise any power of sale, Lien, option,
or any other right hereunder, without notice or demand, or prejudice Agent’s
rights as against Pledgor in any respect.
 
11.           Assignment.  Agent and any other Secured Party may assign, indorse
or transfer any instrument evidencing all or any part of the Secured Obligations
as provided in, and in accordance with, the Credit Agreement, and the holder of
such instrument shall be entitled to the benefits of this Agreement.
 
12.           Termination.  Immediately following the date all Revolving Loan
Commitments have been terminated and all Obligations have been paid in full in
cash, Agent shall deliver to Pledgor the Pledged Collateral at the time subject
to this Agreement and all instruments of assignment executed in connection
therewith, free and clear of the Liens created in favor of Agent under this
Agreement and the other Loan Documents and, except as otherwise provided herein,
all such obligations of Pledgor hereunder shall at such time terminate.
 
13.           Lien Absolute.  All rights of Agent hereunder, and all obligations
of Pledgor hereunder, shall be absolute and unconditional irrespective of:
 
(a)           any lack of validity or enforceability of the Credit Agreement,
any other Loan Document or any other agreement or instrument governing or
evidencing any Secured Obligations;
 
(b)           any change in the time, manner or place of payment of, or in any
other term of, all or any part of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement,  any other Loan Document or any other agreement or instrument
governing or evidencing any Secured Obligations;
 
 
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(c)           any exchange, release or non-perfection of any other Collateral or
any release or amendment or waiver of, or consent to departure from any guaranty
for, all or any of the Secured Obligations;
 
(d)           the insolvency of any Credit Party; or
 
(e)           any other circumstance that might otherwise constitute a defense
available to, or a discharge of, Pledgor.
 
14.           Release.  Pledgor consents and agrees that Agent may at any time,
or from time to time, in its discretion:
 
(a)           renew, extend or change the time of payment of, or the manner,
place or terms of payment of, all or any part of the Secured Obligations; and
 
(b)           exchange, release or surrender all or any of the Collateral
(including the Pledged Collateral), or any part thereof, by whomsoever
deposited, that is now or may hereafter be held by Agent in connection with all
or any of the Secured Obligations;
 
all in such manner and upon such terms as Agent may deem proper, and without
notice to or further assent from Pledgor, it being hereby agreed that Pledgor
shall be and remain bound by this Agreement irrespective of the value or
condition of any of the Collateral and notwithstanding any such change,
exchange, settlement, compromise, surrender, release, renewal or extension, and
notwithstanding also that the Secured Obligations may, at any time, exceed the
aggregate principal amount thereof set forth in the Credit Agreement or any
other agreement governing any Secured Obligations.  Pledgor hereby waives notice
of acceptance of this Agreement, presentment, demand, protest and notice of
dishonor of any and all of the Secured Obligations, and any delay by Agent or
any Lender in commencing suit against any party hereto or Person liable hereon,
and in giving any notice to or of making any claim or demand hereunder upon
Pledgor.  No act or omission of any kind on Agent’s part shall in any event
affect or impair this Agreement.
 
15.           Reinstatement.  This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
Pledgor or Apio for liquidation or reorganization, should Pledgor or Apio become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
Pledgor’s or Apio’s assets, and shall continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Secured
Obligations, or any part thereof, is, pursuant to applicable law, rescinded or
reduced in amount, or must otherwise be restored or returned by any obligee of
the Secured Obligations, whether as a “voidable preference,” “fraudulent
transfer,” or otherwise, all as though such payment or performance had not been
made.  In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Secured Obligations shall be reinstated and
deemed reduced only by such amount paid and not so rescinded, reduced, restored
or returned.
 
16.           Notices.  All notices, demands or other communications required or
made under this Agreement shall be given in writing and addressed to the party
to be notified and sent to the address or facsimile number indicated for such
party below, and shall be effective and be deemed to have been received (i) if
delivered by hand, upon personal delivery, (ii) if delivered by overnight
courier service, one Business Day after delivery to such courier service, (iii)
if delivered by mail, when deposited in the mails and (iv) if delivered by
facsimile, upon sender’s receipt of confirmation of proper transmission.
 
 
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Agent:
General Electric Capital Corporation
101 California Street, Suite 1500
San Francisco, CA  94111
Attention:    Account Manager (Apio)
Telephone: (415) 277-7423
Facsimile:    (415) 944-1796
 
 
With a copy to:
     
General Electric Capital Corporation
12750 High Bluff Dr., Suite 200
San Diego, CA  92130
Attention:     Legal Counsel
Facsimile:     (858) 726-6221
 
Pledgor:
Landec Corporation
3603 Haven Avenue
Menlo Park, CA  94025
Attention:     Gary Steele
Facsimile:     (650) 368-9818
Email:             gsteele@landec.com
     
With a copy to:
     
Orrick, Herrington & Sutcliffe LLP
405 Howard Street
San Francisco, CA 94105
Attention:     Dolph M. Hellman, Esq.
Facsimile:     (415) 773-5759

The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice.  Any party may change its address for
notices hereunder by notice to each other party hereunder given in accordance
with this Section 16.
 
17.           Severability.  Whenever possible, each provision of this Agreement
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
 
 
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18.           No Amendment or Waiver; Cumulative Remedies.  Neither Agent nor
any Lender shall by any act, delay, omission or otherwise be deemed to have
waived any of its rights or remedies hereunder, and no amendment or waiver of
any provision of this Agreement shall be valid unless in writing, signed by
Agent and then only to the extent therein set forth.  A waiver by Agent of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy which Agent would otherwise have had on any future
occasion.  No failure to exercise nor any delay in exercising on the part of
Agent or any Lender, any right, power or privilege hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder preclude any other or future exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies
hereunder provided are cumulative and may be exercised singly or concurrently,
and are not exclusive of any rights and remedies provided by law.  None of the
terms or provisions of this Agreement may be waived, altered, modified or
amended except by an instrument in writing, duly executed by Agent and Pledgor.
 
19.           Termination of This Agreement.  Subject to Section 15 hereof, this
Agreement shall terminate upon the date all Revolving Loan Commitments have been
terminated and all Obligations have been paid in full in cash.
 
20.           Successors and Assigns.  This Agreement and all obligations of
Pledgor hereunder shall be binding upon the successors and assigns of Pledgor
(including any trustee or debtor-in-possession on behalf of Pledgor) and shall,
together with the rights and remedies of Agent, for the benefit of Secured
Parties, hereunder, inure to the benefit of, and be enforceable by, Secured
Parties, all future holders of any instrument evidencing any of the Secured
Obligations and their respective successors and assigns.  No sales of
participations, other sales, assignments, transfers or other dispositions of any
agreement governing or instrument evidencing the Obligations or any portion
thereof or interest therein shall in any manner impair the Lien granted to
Agent, for the benefit of Secured Parties, hereunder.  No Pledgor may assign,
sell, hypothecate or otherwise transfer any interest in or obligation under this
Agreement.
 
21.           Counterparts.  This Agreement may be authenticated in any number
of separate counterparts, each of which shall collectively and separately
constitute one agreement.  This Agreement may be authenticated by manual
signature, facsimile or, if approved in writing by Agent, electronic means, all
of which shall be equally valid.
 
22.           GOVERNING LAW.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE,
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  PLEDGOR HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY,
CITY OF NEW YORK, STATE OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN PLEDGOR, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND PLEDGOR ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY,
AND, PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
AGENT.  PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND PLEDGOR HEREBY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.  PLEDGOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO PLEDGOR
AT THE ADDRESS SET FORTH FOR IT IN SECTION 16 OF THIS AGREEMENT AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR
THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
 
 
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23.           WAIVER OF JURY TRIAL.  BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES
ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF
THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG AGENT, LENDERS AND
PLEDGOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO.
 
24.           Section Titles.  The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
 
25.           No Strict Construction.  The parties hereto have participated
jointly in the negotiation and drafting of this Agreement.  In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
 
26.           Advice of Counsel.  Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Section 23 and Section 24, with its counsel.
 
27.           Benefit of Secured Parties.  All Liens granted or contemplated
hereby shall be for the benefit of Agent individually and the other Secured
Parties, and all proceeds or payments realized from the Pledged Collateral in
accordance herewith shall be applied to the Obligations in accordance with the
terms of the Credit Agreement.
 
 
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28.           Authorization.  Pledgor hereby irrevocably authorizes Agent at any
time and from time to time to file in any filing office in any UCC Jurisdiction
any initial financing statements and amendments thereto that (a) describe the
Pledged Collateral and (b) contain any other information required by part 5 of
Article 9 of the UCC for the sufficiency or filing office acceptance of any
financing statement or amendment.  Pledgor agrees to furnish any such
information to Agent promptly upon request.  Pledgor also ratifies its
authorization for Agent to have filed in any Uniform Commercial Code
Jurisdiction any initial financing statements or amendments thereto if filed
prior to the date hereof.
 
29.           Performance By Agent.  If Pledgor fails to perform or comply with
any of its agreements contained herein, Agent may in its discretion perform or
comply, or otherwise cause performance or compliance, with such agreement, and
(a) the expenses of Agent incurred in connection with such performance or
compliance, and (b) at the election of Agent (confirmed by written notice from
Agent to Borrowers), interest on such expenses of Agent at the Default Rate that
would be applicable to a Loan comprised of a Base Rate Loan, shall be payable by
Pledgor to Agent within five days after written demand and shall constitute a
part of and be included in the Secured Obligations.
 
30.           Reasonable Care.  Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral in its
possession if the Pledged Collateral is accorded treatment substantially equal
to that which Agent accords its own property of the same type, or if it appoints
an agent to hold the Pledged Collateral on its behalf and such agent agrees to
be bound by a similar standard of care, it being understood that neither Agent
nor such agent shall have any responsibility for (a) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not Agent or such
agent has or is deemed to have knowledge of such matters, or (b) taking any
necessary steps to preserve rights against any parties with respect to any
Pledged Collateral.
 
31.           Continuing Security Interest.  This Agreement shall create a
continuing security interest in the Pledged Collateral and shall remain in full
force and effect until the date all Revolving Loan Commitments have been
terminated and all Obligations have been paid in full in cash.
 
32.           Suretyship Waivers.  In addition to any other waivers contained
herein, Pledgor waives, agrees and acknowledges as follows and waives any
defense based upon or arising from the following:
 
(a)           The obligations of Pledgor hereunder are the immediate, direct,
primary and absolute liabilities of Pledgor, and are independent of, and not
co-extensive with, the Obligations or the obligations of any other
Person.  Pledgor expressly waives any right it may have now or in the future to
direct or affect the manner or timing of Agent’s enforcement of its rights or
remedies hereunder or under the other Loan Documents.  Pledgor expressly waives
any right it may have now or in the future to require Agent to, and Agent shall
not have any liability to, first pursue or enforce its rights and remedies
against Borrower, any other guarantor of the Obligations, any of the properties
or assets of Borrower or such other guarantor, the Collateral or any other
security, guaranty or pledge that may now or hereafter be held by Agent for the
Secured Obligations, or to apply such security, guaranty, or pledge to the
Secured Obligations.  Pledgor shall remain liable for its obligations hereunder,
notwithstanding any judgment Agent may obtain against Borrower, any other
guarantor of the Obligations, or any other Person, or any modification,
extension or renewal with respect thereto.  Agent shall not be under any
liability or obligation to marshal any assets in favor of Pledgor or in payment
of any or all of the Secured Obligations, all of which are hereby expressly
waived.
 
 
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(b)           Pledgor has entered into this Agreement based solely upon its
independent knowledge of the financial condition of Borrower, and Pledgor
assumes full responsibility for obtaining any further information with respect
to Borrower or the conduct of its business.  Pledgor represents that it is now,
and during the term of this Agreement will be, responsible for ascertaining the
financial condition of Borrower.  Pledgor hereby waives any duty on the part of
Agent to disclose to it, and agrees that it is not relying upon or expecting
Agent to disclose to it, any fact known or hereafter known by Agent relating to
the operation or condition of Borrower or its business or relating to the
existence, liability, or financial condition of any other guarantor of the
Obligations.  Pledgor knowingly accepts the full range of risk encompassed in a
contract of pledge, which risk includes the possibility that Borrower may incur
Obligations after Borrower’s financial condition or ability to pay debts as they
mature has deteriorated.
 
(c)           Except as specifically provided in this Agreement or applicable
law, Pledgor waives, to the fullest extent permitted by applicable
law:  (i) notice of the acceptance by Agent of this Agreement; (ii) notice of
the existence, creation, payment, nonpayment, performance or nonperformance of
all or any part of the Secured Obligations; (iii) presentment, demand and
protest and notice of presentment, dishonor, intent to accelerate, acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all of the Loan Documents, notes, commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by Agent on which Pledgor may be liable in any way,
and hereby ratifies and confirms whatever Agent may do in this regard in
accordance with the terms of the Loan Agreement and the other Loan Documents;
(iv) all rights to notice and a hearing prior to Agent’s taking possession or
control of, or to Agent’s replevy, attachment or levy upon, the Collateral or
any bond or security that might be required by any court prior to allowing Agent
to exercise any of its remedies; (v) all rights to receive notices from Agent
with respect to, or otherwise sent to, Pledgor or any guarantor; (vi) the
benefit of all valuation, appraisal, stay, extension, redemption and exemption
laws; (vii) the benefit of any law purporting to reduce Pledgor’s obligation in
proportion to the principal obligation hereby secured; (viii) the benefit of any
law purporting to exonerate Pledgor’s obligation upon performance or an offer of
performance of the principal obligation; (ix) notice of any extension,
modification, renewal, or amendment of any of the terms of any Loan Documents;
(x) notice of the occurrence of any Default or Event of Default; and (xi) notice
of any exercise or non-exercise by Agent of any right, power, or remedy with
respect to the Secured Obligations or the Collateral.
 
(d)           If Agent, under applicable law, may proceed to realize its
benefits under any Loan Document providing for a Lien upon any Collateral,
whether owned by Borrower or by any other Person, either by judicial foreclosure
or by nonjudicial sale or enforcement, then Agent, at its sole option, may
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Agreement.
 
 
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(e)           Pledgor represents that the Secured Obligations are and shall be
incurred by Borrower for business and commercial purposes only.  Pledgor
undertakes all the risks encompassed in the Loan Documents as they may be now or
are hereafter agreed upon by Agent and Borrower.  Prior to the date all
Revolving Loan Commitments have been terminated and all Obligations have been
paid in full in cash, Agent, in such manner and upon such terms and at such
times as it deems best, and with or without notice to Pledgor, may release, add,
subordinate or substitute security for the Secured Obligations.
 
(f)           A separate action or actions may be brought and prosecuted against
Pledgor whether or not an action is brought against Borrower, or whether
Borrower is joined in any such action or actions.
 
33.           Waivers Under Statutes.  Pledgor makes the following additional
waivers:
 
(a)           PLEDGOR WAIVES ALL RIGHTS AND DEFENSES THAT PLEDGOR MAY HAVE
BECAUSE THE SECURED OBLIGATIONS ARE OR MAY BECOME SECURED BY REAL
PROPERTY.  THIS MEANS, AMONG OTHER THINGS, THAT:  (a) AGENT MAY COLLECT FROM
PLEDGOR WITHOUT FIRST FORECLOSING ON ANY REAL OR PERSONAL PROPERTY COLLATERAL;
AND (b) IF AGENT FORECLOSES ON ANY REAL PROPERTY COLLATERAL:  (i) THE AMOUNT OF
THE DEBT MAY BE REDUCED ONLY BY THE PRICE FOR WHICH THAT COLLATERAL IS SOLD AT
THE FORECLOSURE SALE, EVEN IF THE COLLATERAL IS WORTH MORE THAN THE SALE PRICE;
AND (ii) AGENT MAY COLLECT FROM PLEDGOR EVEN IF AGENT, BY FORECLOSING ON THE
REAL PROPERTY COLLATERAL, HAS DESTROYED ANY RIGHT PLEDGOR MAY HAVE TO COLLECT
FROM BORROWER.  THIS IS AN UNCONDITIONAL AND IRREVOCABLE WAIVER OF ANY RIGHTS
AND DEFENSES PLEDGOR MAY HAVE BECAUSE BORROWER’S DEBT IS OR MAY BECOME SECURED
BY REAL PROPERTY.  THESE RIGHTS AND DEFENSES INCLUDE, BUT ARE NOT LIMITED TO,
ANY RIGHTS OR DEFENSES BASED UPON SECTION 580a, 580b, 580d OR 726 OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE (“CCP”).
 
(b)           IN ADDITION, PLEDGOR WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF
AN ELECTION OF REMEDIES BY AGENT, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS
A NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR A SECURED OBLIGATION, MAY
HAVE DESTROYED PLEDGOR’S RIGHTS OF SUBROGATION BY THE OPERATION OF SECTION 580d
OF THE CCP OR OTHERWISE.
 
34.           Additional Waivers.
 
(a)           Pledgor waives any and all rights of subrogation, reimbursement,
indemnification, and contribution and any other rights and defenses that are or
may become available to it by reason of California Civil Code Sections 2787 to
2855, inclusive, Sections 2899 and 3433, or other statutory or decisional
law.  This means, among other things, that:
 
 
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(i)           Pledgor waives and will be unable to raise any defense based upon
any statute or rule of law that provides that the obligation of a surety must be
neither larger in amount nor in any other respects more burdensome than that of
a principal;
 
(ii)          Pledgor waives and will be unable to raise any defense based upon
any statute or rule of law that provides that a creditor may be required to
pursue the principal obligor or the security for the principal obligation before
seeking enforcement against a surety or security pledged by the surety;
 
(iii)         Pledgor waives and will be unable to raise any defense based upon
any statute or rule of law that provides that a surety’s obligations may be
limited or exonerated by reason of the creditor’s alteration of the principal
obligation or of another surety, or by reason of the impairment or suspension of
the creditor’s rights or remedies against the principal, another surety, or any
security given for the principal obligation or given for other sureties;
 
(iv)         Pledgor waives and will be unable to claim any right to participate
in, or the benefit of, any security given for the principal obligation now or
hereafter held by Agent; and
 
(v)          Pledgor waives and will be unable to claim any right of subrogation
and any right to enforce any remedy that Agent may have against Borrower.
 
(b)           Pledgor waives any defense based upon any lack of authority of the
officers, directors, partners or agents acting or purporting to act on behalf of
Borrower, or any principal of Borrower, or any legal disability or defect in the
formation of Borrower.
 
(c)           Pledgor waives any defense based upon the application by Borrower
of the proceeds of any Loan for purposes other than the purposes represented by
Borrower to Agent or intended or understood by Agent or Pledgor.
 
(d)           Pledgor waives the benefit of any statute of limitations affecting
the liability of Pledgor hereunder or the enforcement hereof, and Pledgor
further agrees that any act or event that tolls any statute of limitations
applicable to the Obligations of Borrower shall similarly operate to toll the
statute of limitations applicable to Pledgor’s liability hereunder.
 
35.           Miscellaneous.
 
(a)           Agent may execute any of its duties hereunder by or through agents
or employees and shall be entitled to advice of counsel concerning all matters
pertaining to its duties hereunder.
 
(b)           Borrower shall promptly reimburse Agent for actual out-of-pocket
expenses, including reasonable counsel fees, incurred by Agent in connection
with the administration and enforcement of this Agreement.
 
 
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(c)           Neither Agent, nor any of its representative officers, directors,
employees, agents or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
 

[remainder of page intentionally left blank]
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to be
duly executed as of the date first written above.
 
 
“Agent”
 
GENERAL ELECTRIC CAPITAL CORPORATION
 
 
By:   /s/ Wafa
Shalabi                                                           
         Name: Wafa Shalabi
         Title:   Duly Authorized Signatory
 

 
[Signature page to Pledge Agreement]
 
 
 

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“Pledgor”
 
LANDEC CORPORATION
 
 
By:   /s/ Gregory S. Skinner                                               
         Name: Gregory S. Skinner
         Title:   Chief Financial Officer

[Signature page to Pledge Agreement]
 
 
 

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ACKNOWLEDGMENT OF BORROWER
 
Apio, Inc. (“Borrower”) hereby acknowledges receipt of a copy of the Pledge
Agreement dated as of April 23, 2012, to which this Acknowledgement is attached
and expressly consents to its terms, including, without limitation, the
provisions of Sections 9(d) and 36(b) thereof which impose certain payment
obligations on Borrower.

[remainder of page intentionally left blank

[Signature Page to Acknowledgment of Borrower to Pledge Agreement]
 
 
 

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IN WITNESS WHEREOF, the Borrower has caused this Acknowledgement to Pledge
Agreement to be duly executed as of the date first written above.
 
“Borrower”
 
APIO, INC.
 
 
By:   /s/ Gregory S. Skinner                                   
         Name: Gregory S. Skinner
         Title:   Vice President

 
 
[Signature Page to Acknowledgment of Borrower to Pledge Agreement]
 
 
 

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SCHEDULE I
PLEDGED SHARES
 
Pledged Entity
Class of Stock
Holder of Stock
Stock Certificates Number(s)
Numbers of Shares
Percentage of Outstanding Shares
Apio, Inc.
Common
Landec Corporation
CS-27
100
100%

[Signature Page to Acknowledgment of Borrower to Pledge Agreement]
 
 
 

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SCHEDULE II
 
PLEDGE AMENDMENT
 
This Pledge Amendment, dated as of ________________, ___ is delivered pursuant
to Section 7(d) of the Pledge Agreement referred to below.  All defined terms
herein shall have the meanings assigned thereto or incorporated by reference in
the Pledge Agreement.  The undersigned hereby certifies that the representations
and warranties in Section 6 of the Pledge Agreement are and continue to be true
and correct, both as to the shares and other items pledged prior to this Pledge
Amendment and as to the shares and other items pledged pursuant to and delivered
to Agent concurrently with the undersigned Pledgor’s delivery of this Pledge
Amendment.  The undersigned further agrees that this Pledge Amendment may be
attached to that certain Pledge Agreement dated as of April 23, 2012 (the
“Pledge Agreement”), by and among Pledgor and General Electric Capital
Corporation, as Agent, and that the Pledged Stock listed in this Pledge
Amendment shall be and become a part of the Pledged Collateral referred to in
the Pledge Agreement and shall secure all Secured Obligations referred to in the
Pledge Agreement.
 
 

 
“Pledgor”
 
By:   __________________________
         Name: _____________________
         Title:   _____________________

 
 
Name and Address of Pledgor
Pledged Entity
Class of Stock
Certificate Number(s)
Number of Shares
Landec Corporation
Apio, Inc.
     

 

[Signature Page to Acknowledgment of Borrower to Pledge Agreement]
 
 
 

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SCHEDULE III
 
PLEDGOR
 
Name
Jurisdiction of Organization
Organizational I.D.
Landec Corporation
Delaware
4356515

 
[Signature Page to Acknowledgment of Borrower to Pledge Agreement]