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                                                                   EXHIBIT 10.29









                                CREDIT AGREEMENT

                                     BETWEEN

                             INTELLICOAT CORPORATION

                                       AND

                          AMERICAN NATIONAL BANK D/B/A
                               OLD NATIONAL BANK,


                                   DATED AS OF

                                  JUNE 5, 2000


















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                                TABLE OF CONTENTS

<TABLE>

<S>                                                                                                         <C>
CREDIT AGREEMENT.............................................................................................Page 1

         Section 1.  ACCOUNTING TERMS -- DEFINITIONS.........................................................Page 1

         Section 2.  THE LOANS...............................................................................Page 7
                  a.       The Revolving Loan................................................................Page 7
                           (i)      The Commitment -- Use of Proceeds........................................Page 7
                           (ii)     Method of Borrowing......................................................Page 7
                           (iii)    Interest on the Revolving Loan...........................................Page 9
                           (iv)     Extensions of Revolving Loan Maturity Date...............................Page 9
                           (v)      Special Repayments of Principal ........................................Page 10
                  b.       The Capital Expenditure Line of Credit...........................................Page 10
                           (i)      The Capital Expenditure of Line Commitment --
                                            Use of Proceeds.................................................Page 10
                           (ii)     Method of Borrowing.....................................................Page 11
                           (iii)    Interest on the Capital Expenditure Line of Credit......................Page 12
                           (iv)     Extensions of Capital Expenditure Line of Credit
                                            Maturity Date...................................................Page 13
                  c.       The Capital Expenditure Term Loan................................................Page 13
                           (i)      Amount..................................................................Page 13
                           (ii)     The Capital Expenditure Term Note.......................................Page 13
                           (iii)    Interest on the Capital Expenditure Term Loan...........................Page 14
                           (iv)     Use of Proceeds of the Capital Expenditure Term Loan....................Page 15
                  d.       Provisions Applicable to All of the Loans........................................Page 15
                           (i)      Calculation of Interest.................................................Page 15
                           (ii)     Manner of Payment -- Application........................................Page 15
                           (iii)    Commitment Fee..........................................................Page 15
                           (iv)     Automatic Debit.........................................................Page 15
                           (v)      Prepayment..............................................................Page 16

         Section 3.  REPRESENTATIONS AND WARRANTIES.........................................................Page 16
                  a.       Organization of the Company......................................................Page 16
                  b.       Authorization; No Conflict.......................................................Page 16
                  c.       Validity and Binding Nature......................................................Page 17
                  d.       Financial Statements.............................................................Page 17
                  e.       Litigation and Contingent Liabilities............................................Page 17
                  f.       Liens............................................................................Page 18
                  g.       Employee Benefit Plans...........................................................Page 18
                  h.       Payment of Taxes.................................................................Page 18
                  i.       Investment Company Act...........................................................Page 19
</TABLE>

                                        i

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<TABLE>
<S>                                                                                                        <C>
                  j.       Regulation U and other Federal Regulations.......................................Page 19
                  k.       Hazardous Substances.............................................................Page 19
                  l.       Subsidiaries.....................................................................Page 20
                  m.       Organization of Landec...........................................................Page 20
                  n.       Landec Authorization; No Conflict................................................Page 20
                  o.       Landec Validity and Binding Nature...............................................Page 21

         Section 4  COLLATERAL FOR THE OBLIGATIONS..........................................................Page 21
                  a.       Security Agreement...............................................................Page 21
                  b.       Mortgage.........................................................................Page 21
                           (i)      Title Search............................................................Page 22
                           (ii)     Flood Hazard Determination Form.........................................Page 22
                  c.       Subordination Agreement..........................................................Page 22
                           (i)      Ratio of Liabilities to Tangible Capital Base...........................Page 23
                  d.       Guaranty Agreement...............................................................Page 23
                  e.       Assignment of Licensing Agreement................................................Page 23
                  f.       Intercreditor Agreement..........................................................Page 23

         Section 5.  AFFIRMATIVE COVENANTS OF THE COMPANY...................................................Page 24
                  a.       Corporate Existence..............................................................Page 24
                  b.       Reports, Certificates and Other Information......................................Page 24
                           (i)      Annual Statements.......................................................Page 24
                           (ii)     Interim Statements......................................................Page 24
                           (iii)    Guarantor's Financial Statements........................................Page 25
                           (iv)     Borrowing Base Certificates.............................................Page 25
                           (v)      Orders..................................................................Page 25
                           (vi)     Notice of Default or Litigation.........................................Page 26
                           (vii)    Registration Statements and Reports.....................................Page 26
                           (viii)   Other Information.......................................................Page 26
                  c.       Books, Records and Inspections...................................................Page 26
                  d.       Insurance........................................................................Page 26
                  e.       Taxes and Liabilities............................................................Page 27
                  f.       Compliance with Legal and Regulatory Requirements................................Page 27
                  g.       Primary Banking Relationship.....................................................Page 27
                  h.       Employee Benefit Plans...........................................................Page 27
                  i.       Hazardous Substances.............................................................Page 27
                  j.       Annual Cleanup...................................................................Page 29

         Section 6.  NEGATIVE COVENANTS OF THE COMPANY......................................................Page 29
                  a.       Restricted Payments..............................................................Page 29
                           (i)      Ratio of Liabilities to Tangible Capital Base...........................Page 29
                           (ii)     Cash Flow Coverage Ratio................................................Page 30
                  b.       Liens............................................................................Page 30
</TABLE>

                                       ii

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<TABLE>
<S>                                                                                                        <C>
                  c.       Guaranties.......................................................................Page 31
                  d.       Loans or Advances................................................................Page 32
                  e.       Mergers, Consolidations, Sales, Acquisition or Formation
                                    of Subsidiaries ........................................................Page 32
                  f.       Margin Stock.....................................................................Page 32
                  g.       Other Agreements.................................................................Page 32
                  h.       Judgments........................................................................Page 33
                  i.       Principal Office.................................................................Page 33
                  j.       Hazardous Substances.............................................................Page 33
                  k.       Debt.............................................................................Page 33

         Section 7.  CONDITIONS OF LENDING..................................................................Page 33
                  a.       No Default.......................................................................Page 34
                  b.       Documents to be Furnished at Closing.............................................Page 34

         Section 8.  EVENTS OF DEFAULT......................................................................Page 37
                  a.       Nonpayment of the Loans..........................................................Page 37
                  b.       Nonpayment of Other Indebtedness for Borrowed Money..............................Page 37
                  c.       Other Material Obligations.......................................................Page 37
                  d.       Bankruptcy, Insolvency, etc......................................................Page 37
                  e.       Warranties and Representations...................................................Page 38
                  f.       Violations of Negative Covenants.................................................Page 38
                  g.       Noncompliance With Other Provisions of this Agreement............................Page 38

         Section 9.  EFFECT OF EVENT OF DEFAULT.............................................................Page 38

         Section 10.  WAIVER -- AMENDMENTS..................................................................Page 39

         Section 11.  NOTICES...............................................................................Page 39

         Section 12.  COSTS, EXPENSES AND TAXES.............................................................Page 40

         Section 13.  SEVERABILITY..........................................................................Page 41

         Section 14.  CAPTIONS..............................................................................Page 41

         Section 15.  GOVERNING LAW -- JURISDICTION.........................................................Page 41

         Section 16.  PRIOR AGREEMENTS, ETC.................................................................Page 41

         Section 17.  SUCCESSORS AND ASSIGNS................................................................Page 42

         Section 18.  WAIVER OF JURY TRIAL..................................................................Page 42

         Section 19.  ARBITRATION...........................................................................Page 42
</TABLE>

                                       iii



<PAGE>




         Exhibit "A"       Promissory Note (Revolving Loan)($3,000,000.00)

         Exhibit "B"       Promissory Note (Capital Expenditure Line of Credit)
                           ($1,000,000.00)

         Exhibit "C"       Promissory Note (Capital Expenditure Term Loan)
                           ($1,000,000.00)

         Exhibit "D"       Schedule of Exceptions

         Exhibit "E"       Security Agreement (Equipment, Inventory, Accounts
                           Receivable and General Intangibles)

         Exhibit "F"       Mortgage, Security Agreement, Assignment of Rents and
                           Fixture Filing

         Exhibit "G"       Subordination Agreement (Landec Corporation)

         Exhibit "H"       Guaranty Agreement (Landec Corporation)

         Exhibit "I"       Collateral Assignment of Licensing Agreement

         Exhibit "J"       Intercreditor Agreement







                                       iv


<PAGE>

                                CREDIT AGREEMENT


       INTELLICOAT CORPORATION, a Delaware corporation (the "Company"), and
AMERICAN NATIONAL BANK D/B/A OLD NATIONAL BANK, a national banking association
with its principal office in Indianapolis, Indiana (the "Bank"), agree as
follows:

       SECTION 1. ACCOUNTING TERMS -- DEFINITIONS. All accounting and financial
terms used in this Agreement are used with the meanings such terms would be
given in accordance with generally accepted accounting principles except as may
be otherwise specifically provided in this Agreement. The following terms have
the meanings indicated when used in this Agreement with the initial letter
capitalized:

       -      "ADVANCE" means a disbursement of proceeds of the Revolving Loan
              or the Capital Expenditure Line of Credit, as the context
              requires.

       -      "AGREEMENT" means this Credit Agreement between the Company and
              the Bank, as it may from time to time be amended.

       -      "ASSIGNMENT OF LICENSING AGREEMENTS" is used as defined in Section
              4(e).

       -      "AUTHORIZED OFFICER" means the Chief Financial Officer or the
              Controller of the Company or such other officer whose authority to
              perform acts to be performed only by an Authorized Officer under
              the terms of this Agreement is evidenced to the Bank by a
              certified copy of an appropriate resolution of the Board of
              Directors of the Company.

       -      "BANK" is used as defined in the preamble.

       -      "BANKING DAY" means a day on which the principal office of the
              Bank in the City of Indianapolis, Indiana, is open for the purpose
              of conducting substantially all of the Bank's business activities.

       -      "BORROWING BASE" means an amount equal to the sum of seventy
              percent (70%) of the book value of the Company's Eligible
              Inventory.

<PAGE>

       -      "BORROWING BASE CERTIFICATE" means a certificate of the Company
              signed by an appropriate officer indicating the amount of the
              Borrowing Base as of a stated date and in such form and showing
              such detail as the Bank may reasonably require.

       -      "CAPITAL EXPENDITURE LINE OF CREDIT" is used as defined in Section
              2(b)(i).

         -      "CAPITAL EXPENDITURE LINE OF CREDIT COMMITMENT" means the
                agreement of the Bank to extend the Capital Expenditure Line of
                Credit to the Company until the Capital Expenditure Line of
                Credit Maturity Date, and if the context so requires, the term
                may also refer to the maximum principal amount which is
                permitted to be outstanding under the Capital Expenditure Line
                of Credit at any time.

         -      "CAPITAL EXPENDITURE LINE OF CREDIT MATURITY DATE" means
                initially June 30, 2001, and thereafter any subsequent date to
                which the Capital Expenditure Line of Credit Commitment may be
                extended by the Bank pursuant to the terms of Section 2(b)(iv).

       -      "CAPITAL EXPENDITURE LINE OF CREDIT NOTE" is used as defined in
              Section 2(b)(ii).

       -      "CAPITAL EXPENDITURE TERM LOAN" is used as defined in Section
              2(c).

       -      "CAPITAL EXPENDITURE TERM NOTE" is used as defined in Section
              2(c)(ii).

       -      "CODE" means the Internal Revenue Code of 1986, as amended.

       -      "COMMITMENT" means the agreement of the Bank to extend the
              Revolving Loan to the Company until the Revolving Loan Maturity
              Date, and if the context so requires, the term may also refer to
              the maximum principal amount which is permitted to be outstanding
              under the Revolving Loan at any time, assuming the Borrowing Base
              is equal to or in excess of such amount.

       -      "COMPANY" is used as defined in the Preamble.


                                       2
<PAGE>

       -      "EBITDA" means earnings before interest, taxes, depreciation, and
              amortization, all determined in accordance with GAAP.

       -      "ELIGIBLE INVENTORY" means seed corn inventory :(i) for which the
              Company has made payment, (ii) that is held in a warehouse in
              Illinois or Indiana approved in advance by the Bank, or at
              Hubner's plant located in West Lebanon, Indiana (each of the
              foregoing called a "Warehouse"), (iii) which is segregated at each
              such Warehouse from other non-Fielder's Choice Direct seed corn
              inventory that is clearly marked in bags or other containers with
              the words "Fielder's Choice Direct" or another name clearly
              identifying the Company's seed corn supported by the books and
              records of the Company as being owned by the Company, (iv) as to
              which all creditors of the owner or lessee of the Warehouse where
              such inventory is located have entered into an Ownership
              Acknowledgment Agreement or similar agreement, appropriate lien
              waivers have been executed, and appropriate UCC financing
              statements disclaiming any interest in such seed corn inventory
              have been filed, complete copies of which have been provided to
              the Bank, and (v) as to which the Bank has filed the appropriate
              UCC financing statements giving notice of the Bank's security
              interest in the Company's seed corn inventory located at such
              Warehouse and perfecting the Bank's lien thereon.

       -      "ERISA" means the Employee Retirement Income Security Act of 1974,
              as amended.

       -      "EVENT OF DEFAULT" means any of the events described in Section 8.

       -      "GAAP" means generally accepted account principles as then in
              effect, which shall include the official interpretations thereof
              by the Financial Accounting Standards Board, consistently applied.

       -      "GUARANTY AGREEMENT" is used as defined in Section 4(d).

       -      "HAZARDOUS SUBSTANCE" means any hazardous or toxic substance
              regulated by any federal, state or local statute or regulation
              including but not limited


                                       3
<PAGE>

              to the Comprehensive Environmental Response, Compensation and
              Liability Act, the Resource Conservation and Recovery Act and the
              Toxic Substance Control Act, or by any federal, state or local
              governmental agencies having jurisdiction over the control of any
              such substance including but not limited to the United States
              Environmental Protection Agency.

       -      "HUBNER" means Hubner Industries, LLC, together with its
              successors and assigns.

       -      "INFORMAL REQUEST" has the meaning set forth in Section 2(a)(ii)
              herein.

       -      "INTERCREDITOR AGREEMENT" is used as defined in Section 4(f)
              herein.

       -      "INTEREST PERIOD" means each consecutive one year period for which
              the Company shall have selected the T-Bill Rate, effective as of
              the first day of each Interest Period and ending on the last day
              of each Interest Period.

       -      "LANDEC" means Landec Corporation, a California corporation,
              together with its successors and assigns.

       -      "LOAN" means any of the Revolving Loan, the Capital Expenditure
              Line of Credit, or the Capital Expenditure Term Loan, as the
              context requires, and when used in the plural form refers to all
              of the Loans.

       -      "LOAN DOCUMENT" means any of this Agreement, the Revolving Note,
              the Capital Expenditure Line of Credit Note, the Capital
              Expenditure Term Note, the Mortgage, the Security Agreement, the
              Subordination Agreement, the Guaranty Agreement, the Assignment of
              Licensing Agreements, the Intercreditor Agreement, and any other
              instrument or document which evidences or secures the Loans or any
              of them or which expresses an agreement as to terms applicable to
              the Loans or any of them, and in the plural means any two or more
              of the Loan Documents, as the context requires.

       -      "MORTGAGE" is used as defined in Section 4(b).


                                       4
<PAGE>

       -      "NOTE" means any of the Revolving Note, the Capital Expenditure
              Line of Credit Note, or the Equipment Term Note, as the context
              requires, and when used in the plural form refers to all of the
              Notes.

       -      "OBLIGATIONS" means all obligations of the Company in favor of the
              Bank of every type and description, direct or indirect, absolute
              or contingent, due or to become due, now existing or hereafter
              arising pursuant to this Agreement and the other Loan Documents,
              including but not limited to: (i) all of such obligations on
              account of the Loans, including any Advances made pursuant to any
              extension of the Commitment beyond the initial Revolving Loan
              Maturity Date, any extension of the Capital Expenditure Line of
              Credit Commitment beyond the initial Capital Expenditure Line of
              Credit Maturity Date, or pursuant to any other amendment of this
              Agreement, and (ii) all other obligations arising under any Loan
              Document as amended from time to time.

       -      "OWNERSHIP ACKNOWLEDGMENT AGREEMENT" means that certain Ownership
              Acknowledgment Agreement entered into by and among the Company,
              Hubner, and Civitas Bank, now known as Fifth Third Bank, Indiana,
              dated as of November 1, 1998, as it may be amended.

       -      "PLAN" means an employee pension benefit plan as defined in ERISA.

       -      "PLEDGE AGREEMENT" is used as defined in Section 4(e).

       -      "PRIME RATE" means the interest rate announced from time to time
              in the Money Section of the WALL STREET JOURNAL (MidWest Edition)
              as the "Prime Rate." Any change in such Prime Rate shall take
              effect on the date specified in the published change in such rate.

       -      "PRIME-BASED RATE" means any variable rate at which interest may
              accrue on all or a portion of any of the Loans under the terms of
              this Agreement determined by reference to the Prime Rate.

       -      "REVOLVING LOAN" is used as defined in Section 2(a)(i).


                                       5
<PAGE>

       -      "REVOLVING LOAN MATURITY DATE" means initially June 30, 2003, and
              thereafter any subsequent date to which the Commitment may be
              extended by the Bank pursuant to the terms of Section 2(a)(iv).

       -      "REVOLVING NOTE" is used as defined in Section 2(a)(ii).

       -      "SECURITY AGREEMENT" is used as defined in Section 4(a).

       -      "SEED AGREEMENT" means that certain Hybrid Seed Corn Production
              and Sales Agreement entered into by and between Hubner and the
              Company dated as of November 1, 1998, pursuant to which, among
              other things, Hubner has agreed to supply seed corn to the Company
              (as amended, and as further amended, restated or otherwise
              modified from time to time).

       -      "SUBORDINATED DEBT" means indebtedness of the Company which is
              subordinated to the indebtedness of the Company to the Bank under
              the terms of the Subordination Agreement and any other
              indebtedness of the Company which is subordinated to the Company's
              indebtedness to the Bank on substantially similar terms.

       -      "SUBORDINATION AGREEMENT" is used as defined in Section 4(c).

       -      "SUBSIDIARY" means any corporation, partnership, joint venture or
              other business entity over which the Company owns, directly or
              indirectly fifty-one percent (51%) or more of the equity of such
              entity having ordinary voting power to elect a majority of the
              board of directors.

       -      "T-BILL RATE" means the sum of the 5-Year T-Bill Rate plus two and
              three-quarters percent (2-3/4%) per annum.

       -      "5-YEAR T-BILL RATE" means the 5-Year T-Bill Rate as published in
              the "Money Section" of the WALL STREET JOURNAL (MidWest Edition)
              two (2) Banking Days prior to the first day of Capital Expenditure
              Term Loan.

       -      "TANGIBLE CAPITAL BASE" means the shareholders' equity of the
              Company less any recorded goodwill, patents, trademarks, trade
              secrets, and any other assets which would be classified as
              intangible assets under generally


                                       6
<PAGE>

              accepted accounting principles, plus the principal amount of the
              Company's Subordinated Debt.

       -      "UNMATURED EVENT OF DEFAULT" means any event specified in Section
              8, which is not initially an Event of Default, but which would, if
              uncured, become an Event of Default with the giving of notice or
              the passage of time or both.

       -      "WAREHOUSE" is used as defined in the definition of Eligible
              Inventory.

       SECTION 2. THE LOANS. Subject to all of the terms and conditions of this
Agreement, the Bank will make the Loans described in this Section to the
Company.

       a.     THE REVOLVING LOAN. The Bank will make a revolving loan to the
              Company on the following terms and subject to the following
              conditions:

              (i)    THE COMMITMENT -- USE OF PROCEEDS. From the date of this
                     Agreement and until the Revolving Loan Maturity Date, the
                     Bank agrees to make Advances (collectively, the "Revolving1
                     Loan") under a revolving line of credit from time to time
                     to the Company of amounts not exceeding in the aggregate at
                     any time outstanding the lesser of Three Million and 00/100
                     Dollars ($3,000,000.00) (the "Commitment") or the Borrowing
                     Base, provided that all of the conditions of lending stated
                     in Section 7 of this Agreement as being applicable to the
                     Revolving Loan have been fulfilled at the time of each
                     Advance. Proceeds of the Revolving Loan may be used by the
                     Company only for working capital purposes.

              (ii)   METHOD OF BORROWING. The obligation of the Company to repay
                     the Revolving Loan shall be evidenced by a promissory note
                     (the "Revolving Note") of the Company in the form of
                     EXHIBIT "A" attached hereto. So long as no Event of Default
                     or Unmatured Event of Default shall have occurred and be
                     continuing and until the Revolving Loan Maturity Date, the
                     Company may borrow,


                                       7
<PAGE>

                     repay and reborrow (subject to the "annual cleanup
                     requirements set forth in Section 5(j)) under the Revolving
                     Note on any Banking Day; provided, that no borrowing may
                     cause the principal balance of the Loan to exceed the
                     lesser of the Commitment or the Borrowing Base or may
                     result in an Event of Default or an Unmatured Event of
                     Default, and provided further, that the Company may receive
                     the proceeds of only one Advance per Banking Day. Each
                     Advance under the Revolving Loan shall be conditioned upon
                     receipt by the Bank from the Company of a Borrowing Base
                     Certificate completed as of the date of the request. The
                     Bank shall make a disbursement upon the oral request of the
                     Company made by an Authorized Officer, or upon a request
                     transmitted to the Bank by telephone facsimile ("fax")
                     machine, or by any other form of written electronic
                     communication (all such requests for Advances being
                     hereafter referred to as "Informal Requests"). In so doing,
                     the Bank may rely on any Informal Request which shall have
                     been received by it in good faith from a person reasonably
                     believed to be an Authorized Officer. Upon making each
                     Informal Request, the Company shall promptly deliver to the
                     Bank a Borrowing Base Certificate completed as of the date
                     of such Informal Request, and shall in and of itself
                     constitute the representation of the Company that no Event
                     of Default or Unmatured Event of Default has occurred and
                     is continuing or would result from the making of the
                     requested Advance, and that the making of the requested
                     Advance shall not cause the principal balance of the
                     Revolving Loan to exceed the lesser of the Commitment or
                     the Borrowing Base. All borrowings and reborrowings and all
                     repayments shall be in amounts of not less than One
                     Thousand Dollars ($1,000.00), except for repayment


                                       8
<PAGE>

                     of the entire principal balance of the Revolving Loan and
                     except for special prepayments of principal required under
                     the terms of Section 2(a)(v). Upon receipt of a request for
                     an Advance, a Borrowing Base Certificate, and upon
                     compliance with any other conditions of lending stated in
                     Section 7 of this Agreement applicable to the Revolving
                     Loan, the Bank shall disburse the amount of the requested
                     Advance to the Company. All Advances by the Bank and
                     payments by the Company shall be recorded by the Bank on
                     its books and records, and the principal amount outstanding
                     from time to time, plus interest payable thereon, shall be
                     determined by reference to the books and records of the
                     Bank. The Bank's books and records shall be presumed PRIMA
                     FACIE to be correct as to such matters.

              (iii)  INTEREST ON THE REVOLVING LOAN. The principal amount of the
                     Revolving Loan outstanding from time to time shall bear
                     interest until maturity of the Revolving Note at a rate per
                     annum equal to the Prime Rate plus three-quarters percent
                     (3/4%). After maturity, whether on the Revolving Loan
                     Maturity Date or on account of acceleration upon the
                     occurrence of an Event of Default, and until paid in full,
                     the Revolving Loan shall bear interest at a per annum rate
                     equal to the Prime Rate plus four and three-quarters
                     percent (4-3/4%). Accrued interest shall be due and payable
                     monthly on the last Banking Day of each month prior to
                     maturity. After maturity, interest shall be payable as
                     accrued and without demand.

              (iv)   EXTENSIONS OF REVOLVING LOAN MATURITY DATE. The Bank may,
                     upon the request of the Company, but at the Bank's sole
                     discretion, extend the Revolving Loan Maturity Date from
                     time to time to such date or dates as the Bank may elect by
                     notice in writing to


                                       9
<PAGE>

                     the Company, and upon any such extension and upon execution
                     and delivery by the Company of a Revolving Note reflecting
                     the extended maturity date, the date to which the
                     Commitment is then extended will become the "Revolving Loan
                     Maturity Date" for purposes of this Agreement.

              (v)    SPECIAL REPAYMENTS OF PRINCIPAL. At any time the principal
                     balance of the Revolving Loan exceeds the Borrowing Base,
                     as determined on the basis of the most recent Borrowing
                     Base Certificate furnished by the Company or as determined
                     by the Bank upon an inspection of the books and records of
                     the Company, the Company shall immediately repay that
                     portion of the principal balance of the Revolving Loan
                     which is in excess of the Borrowing Base. Such repayment
                     shall be due without demand.

       b.     THE CAPITAL EXPENDITURE LINE OF CREDIT. The Bank will make a
              Capital Expenditure Line of Credit to the Company on the following
              terms and subject to the following conditions:

              (i)    THE CAPITAL EXPENDITURE LINE OF CREDIT COMMITMENT -- USE OF
                     PROCEEDS. From the date of this Agreement and until the
                     Capital Expenditure Line of Credit Maturity Date, the Bank
                     agrees to make Advances (collectively, the "Capital
                     Expenditure Line of Credit") from time to time to the
                     Company of amounts not exceeding in the aggregate during
                     the term of the Capital Expenditure Line of Credit the
                     amount of One Million and 00/100 Dollars ($1,000,000.00)
                     (the "Capital Expenditure Line of Credit Commitment");
                     provided, that all of the conditions of lending stated in
                     Section 7 of this Agreement as being applicable to the
                     Capital Expenditure Line of Credit have been fulfilled at
                     the time of each Advance; and provided further, that no
                     Advance of the Capital Expenditure Line of Credit shall
                     exceed one hundred


                                       10
<PAGE>

                     percent (100%) of the amount of the invoice evidencing the
                     cost to the Company of each piece of equipment (including
                     without limitation, freight and installation costs and
                     expenses, and taxes, all as evidenced on the invoice)
                     purchased with proceeds of the Loan. Proceeds of the
                     Capital Expenditure Line of Credit may be used by the
                     Company only for capital expenditures.

              (ii)   METHOD OF BORROWING. The obligation of the Company to repay
                     the Capital Expenditure Line of Credit shall be evidenced
                     by a promissory note (the "Capital Expenditure Line of
                     Credit Note") of the Company in the form of EXHIBIT "B"
                     attached hereto. So long as no Event of Default or
                     Unmatured Event of Default shall have occurred and be
                     continuing and until the Capital Expenditure Line of Credit
                     Maturity Date, the Company may borrow under the Capital
                     Expenditure Line of Credit Note on any Banking Day;
                     provided, that no borrowing may cause the principal amount
                     of the Loan disbursed to the Company during the term of the
                     Loan to exceed in the aggregate the Capital Expenditure
                     Line of Credit Commitment or may result in an Event of
                     Default or an Unmatured Event of Default. Each Advance
                     under the Capital Expenditure Line of Credit shall be
                     conditioned upon receipt by the Bank from the Company of a
                     copy of the invoice for the equipment to be purchased with
                     the proceeds of the Advance. The Bank shall make a
                     disbursement upon receipt of an Informal Request. In so
                     doing, the Bank may rely on any Informal Request which
                     shall have been received by it in good faith from a person
                     reasonably believed to be an Authorized Officer. Upon
                     making each Informal Request, the Company shall promptly
                     deliver to the Bank an invoice for the equipment to be
                     purchased with proceeds of the Advance, and shall in and of
                     itself constitute the representation


                                       11
<PAGE>

                     of the Company that no Event of Default or Unmatured Event
                     of Default has occurred and is continuing or would result
                     from the making of the requested Advance and that the
                     making of the requested Advance shall not cause the
                     aggregate principal amount disbursed under of the Capital
                     Expenditure Line of Credit to exceed the Capital
                     Expenditure Line of Credit Commitment. All borrowings and
                     all repayments shall be in amounts of not less than One
                     Thousand Dollars ($1,000.00), except for repayment of the
                     entire principal balance of the Capital Expenditure Line of
                     Credit. Upon receipt of receipt of a request for an Advance
                     and the associated invoice or invoices, and upon compliance
                     with any other conditions of lending stated in Section 7 of
                     this Agreement applicable to the Capital Expenditure Line
                     of Credit, the Bank shall disburse the amount of the
                     requested Advance to the Company. All Advances by the Bank
                     and payments by the Company shall be recorded by the Bank
                     on its books and records, and the principal amount
                     outstanding from time to time, plus interest payable
                     thereon, shall be determined by reference to the books and
                     records of the Bank. The Bank's books and records shall be
                     presumed PRIMA FACIE to be correct as to such matters.

              (iii)  INTEREST ON THE CAPITAL EXPENDITURE LINE OF CREDIT. The
                     principal amount of the Capital Expenditure Line of Credit
                     outstanding from time to time shall bear interest until
                     maturity of the Capital Expenditure Line of Credit Note at
                     a rate per annum equal to the Prime Rate plus
                     three-quarters percent (3/4%). After maturity, whether on
                     the Capital Expenditure Line of Credit Maturity Date or on
                     account of acceleration upon the occurrence of an Event of
                     Default, and until paid in full, the Capital Expenditure
                     Line of Credit shall bear interest at a per annum rate
                     equal to the Prime


                                       12
<PAGE>

                     Rate plus four and three-quarters percent (4-3/4%). Accrued
                     interest shall be due and payable monthly on the last
                     Banking Day of each month prior to maturity. After
                     maturity, interest shall be payable as accrued and without
                     demand.

              (iv)   EXTENSIONS OF CAPITAL EXPENDITURE LINE OF CREDIT MATURITY
                     DATE. The Bank may, upon the request of the Company, but at
                     the Bank's sole discretion, extend the Capital Expenditure
                     Line of Credit Maturity Date from time to time to such date
                     or dates as the Bank may elect by notice in writing to the
                     Company, and upon any such extension and upon execution and
                     delivery by the Company of a Capital Expenditure Line of
                     Credit Note reflecting the extended maturity date, the date
                     to which the Capital Expenditure Line of Credit Commitment
                     is then extended will become the "Capital Expenditure Line
                     of Credit Maturity Date" for purposes of this Agreement.

       c.     THE CAPITAL EXPENDITURE TERM LOAN. The Bank will make a Capital
              Expenditure Term Loan (the "Capital Expenditure Term Loan") to the
              Company on the Capital Expenditure Line of Credit Maturity Date on
              the following terms and subject to the following conditions:

              (i)    AMOUNT. The principal amount of the Capital Expenditure
                     Term Loan shall be equal to the lesser of One Million and
                     00/100 Dollars ($1,000,000.00), or the amount of the
                     aggregate principal amount of the Capital Expenditure Line
                     of Credit outstanding on the Capital Expenditure Line of
                     Credit Maturity Date.

              (ii)   THE CAPITAL EXPENDITURE TERM NOTE. The obligation of the
                     Company to repay the Capital Expenditure Term Loan shall be
                     evidenced by a promissory note (the "Capital Expenditure
                     Term Note") in the form of EXHIBIT "C" attached hereto.
                     Principal and interest of the Capital Expenditure Term Loan
                     shall be repayable


                                       13
<PAGE>

                     in equal monthly installments, each of which shall be equal
                     to one-forty-eighth (1/48th) of the sum of the initial
                     principal amount of the Capital Expenditure Line of Credit
                     outstanding on the Capital Expenditure Line of Credit
                     Maturity Date plus interest calculated at the rate provided
                     in Section 2(c)(iii) herein for the entire scheduled term
                     of the Capital Expenditure Term Loan , which monthly
                     payments shall be due commencing on the last Banking Day of
                     the month in which the Capital Expenditure Term Loan is
                     made, and continuing thereafter on the last Banking Day of
                     each month thereafter until the fourth anniversary of the
                     making of the Capital Expenditure Term Loan, on which date
                     the entire principal balance of the Capital Expenditure
                     Term Loan shall be due and payable together with all
                     accrued and unpaid interest. The principal of the Capital
                     Expenditure Term Loan may be prepaid at any time in whole
                     or in part without premium or penalty, provided that: (A)
                     any partial prepayment shall be in an amount which is an
                     integral multiple of $1,000.00, and (B) all partial
                     prepayments shall be applied to the latest maturing
                     scheduled installments of principal in inverse order of
                     maturity.

              (iii)  INTEREST ON THE CAPITAL EXPENDITURE TERM LOAN. The unpaid
                     principal balance from time to time of the Capital
                     Expenditure Term Loan shall bear interest from the date the
                     Loan is made prior to the maturity of the Capital
                     Expenditure Term Note at a rate per annum equal to the
                     T-Bill Rate. After maturity, whether scheduled maturity or
                     maturity by virtue of acceleration on account of the
                     occurrence of an Event of Default, interest will accrue on
                     the Capital Expenditure Term Loan at a rate per annum equal
                     to the T-Bill Rate plus four percent (4%). Prior to
                     maturity, interest shall be due and payable on the last
                     Banking Day of each


                                       14
<PAGE>

                     month together with payment of principal due on such dates
                     as provided in Section 2(c)(ii) above. After maturity,
                     interest shall be payable as accrued and without demand.

              (iv)   USE OF PROCEEDS OF THE CAPITAL EXPENDITURE TERM LOAN. The
                     proceeds of the Capital Expenditure Term Loan shall be used
                     in their entirety to refinance the Capital Expenditure Line
                     of Credit on the Capital Expenditure Line of Credit
                     Maturity Date.

       d.     PROVISIONS APPLICABLE TO ALL OF THE LOANS. The following
              provisions are applicable to both of the Loans:

              (i)    CALCULATION OF INTEREST. Interest on the Loans shall be
                     calculated by applying the ratio of the annual interest
                     rate over a year of 360 days, multiplied by the outstanding
                     principal balance, multiplied by the actual number of days
                     the principal balance is outstanding.

              (ii)   MANNER OF PAYMENT - APPLICATION. All payments of principal
                     and interest on the Loans shall be payable at the principal
                     office of the Bank in Indianapolis, Indiana, in funds
                     available for the Bank's immediate use in that city and no
                     payment will be considered to have been made until received
                     in such funds. All payments received on account of each
                     Loan will be applied first to the satisfaction of any
                     interest which is then due and payable on account of such
                     Loan, and to principal only after all interest which is due
                     and payable has been satisfied.

              (iii)  COMMITMENT FEE. The Bank acknowledges receipt from the
                     Company of the sum of $5,000.00, either previous to or
                     contemporaneously with the execution of this Agreement, as
                     a fee for the Bank's commitment to make the Loans.

              (iv)   AUTOMATIC DEBIT. Upon prior notice to the Company, the Bank
                     may debit when due all payments of principal and interest
                     due under


                                       15
<PAGE>

                     the terms of this Agreement to any deposit account of the
                     Company carried with the Bank without further authority.

              (v)    PREPAYMENT. The Loans may be prepaid at any time in whole
                     or in part without penalty or premium.

       SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the Bank to make the
Loans, the Company represents and warrants to the Bank that:

       a.     ORGANIZATION OF THE COMPANY. The Company is a corporation
              organized, existing and in good standing under the laws of the
              State of Delaware. The Company is qualified to do business in
              every jurisdiction in which: (i) the nature of the business
              conducted or the character or location of properties owned or
              leased, or the residences or activities of employees make such
              qualification necessary, and (ii) failure so to qualify might
              impair the title of the Company to material properties or the
              Company's right to enforce material contracts or result in
              exposure of the Company to liability for material penalties in
              such jurisdiction. No jurisdiction in which the Company is not
              qualified to do business has asserted in writing that the Company
              is required to be qualified therein. The principal office of the
              Company is located at 306 North Main Street, Monticello, Indiana
              47960. The Company does not conduct any material operations or
              keep any material amounts of property at any other location,
              except the Warehouses. The Company has not done business under any
              name other than its present corporate name at any time during the
              six years preceding the date of this Agreement except for the
              names "Fielder's Choice Direct," "Fielder's Choice," and "Williams
              & Sun, Inc."

       b.     AUTHORIZATION; NO CONFLICT. The execution and delivery of this
              Agreement, the borrowings hereunder, the execution and delivery of
              all of the other Loan Documents and the performance by the Company
              of its obligations under this Agreement and all of the other Loan
              Documents are within the Company's corporate powers, have been
              duly authorized by all necessary


                                       16
<PAGE>

              corporate action, have received any required governmental or
              regulatory agency approvals and do not and will not contravene or
              conflict with any provision of law or of the Articles of
              Incorporation or ByLaws of the Company or of any agreement binding
              upon the Company or its properties.

       c.     VALIDITY AND BINDING NATURE. This Agreement and all of the other
              Loan Documents are the legal, valid and binding obligations of the
              Company, enforceable against the Company in accordance with their
              respective terms, except to the extent that enforcement thereof
              may be limited by bankruptcy, insolvency, reorganization,
              moratorium and other laws enacted for the relief of debtors
              generally and other similar laws affecting the enforcement of
              creditors' rights generally or by equitable principles which may
              affect the availability of specific performance and other
              equitable remedies.

       d.     FINANCIAL STATEMENTS. The Company has delivered to the Bank the
              audited financial statements of Landec (which includes the Company
              as a separate segment) as of October 31, 1999, and for the fiscal
              year of Landec then ended and its unaudited interim financial
              statements as of March 31, 2000, and for the month and partial
              fiscal year then ended. Such statements have been prepared in
              accordance with generally accepted accounting principles
              consistently applied except, as to the interim statements, for the
              absence of a statement of cash flows, footnotes and adjustments
              normally made at year end which are not material in amount. Such
              statements present fairly the financial position of the Company as
              of the dates thereof and the results of its operations for the
              periods covered and since the date of the latest of such
              statements there has been no material adverse change in the
              financial position of the Company or in the results of its
              operations.

       e.     LITIGATION AND CONTINGENT LIABILITIES. No litigation, arbitration
              proceedings or governmental proceedings are pending or to the
              Company's knowledge threatened against the Company which would, if
              adversely


                                       17
<PAGE>

              determined, materially and adversely affect its financial position
              or continued operations. The Company has no material contingent
              liabilities not provided for or disclosed in the financial
              statements referred to in Section 3(d) or in the "Schedule of
              Exceptions" attached as EXHIBIT "D."

       f.     LIENS. None of the assets of the Company are subject to any
              mortgage, pledge, title retention lien, or other lien, encumbrance
              or security interest except for liens and security interests
              described in the exceptions enumerated in Section 6(b).

       g.     EMPLOYEE BENEFIT PLANS. Each Plan maintained by the Company is in
              material compliance with ERISA, the Code, and all applicable rules
              and regulations adopted by regulatory authorities pursuant
              thereto, and the Company has filed all reports and returns
              required to be filed by ERISA, the Code and such rules and
              regulations. No Plan maintained by the Company and no trust
              created under any such Plan has incurred any "accumulated funding
              deficiency" within the meaning of Section 412(c)(1) of the Code,
              and the present value of all benefits vested under each Plan did
              not exceed, as of the last annual valuation date, the value of the
              assets of the respective Plans allocable to such vested benefits.
              The Company has no knowledge that any "reportable event" as
              defined in ERISA has occurred with respect to any Plan.

       h.     PAYMENT OF TAXES. The Company has filed all federal, state and
              local tax returns and tax related reports which the Company is
              required to file by any statute or regulation and all taxes and
              any tax related interest payments and penalties that are due and
              payable have been paid, except for such as are being contested in
              good faith and by appropriate proceedings and as to which
              appropriate reserves have been established. Adequate provision has
              been made for the payment when due of all tax liabilities which
              have been incurred, but are not as yet due and payable.


                                       18
<PAGE>

       i.     INVESTMENT COMPANY ACT. The Company is not an "investment company"
              or a company "controlled" by an "investment company" within the
              meaning of the Investment Company Act of 1940, as amended.

       j.     REGULATION U AND OTHER FEDERAL REGULATIONS. The Company is not
              engaged principally, or as one of its important activities, in the
              business of extending credit for the purpose of purchasing or
              carrying margin stock within the meaning of Regulation U of the
              Board of Governors of the Federal Reserve System. Not more than
              twenty-five percent (25%) of the assets of the Company consists of
              margin stock, within the contemplation of Regulation U, as
              amended. No portion of any Loan made hereunder shall be used
              directly or indirectly to purchase ineligible securities, as
              defined by applicable regulations of the Federal Reserve Board,
              underwritten by any affiliate of the Bank during the underwriting
              period and for thirty (30) days thereafter.

       k.     HAZARDOUS SUBSTANCES. Except as disclosed on the "Schedule of
              Exceptions" attached as EXHIBIT "D", to the knowledge of the
              Company after reasonable inquiry and investigation; (i) there are
              no underground storage tanks of any kind on any premises owned or
              occupied by or under lease to the Company; (ii) there are no
              tanks, drums or other containers of any kind on premises owned or
              occupied by or under lease to the Company, the contents of which
              are unknown to the Company; (iii) no premises owned or occupied by
              or under lease to the Company have ever been used, and as of the
              date of this Agreement, no such premises are being used for any
              activities involving the use, treatment, transportation,
              generation, storage or disposal of any Hazardous Substances in
              reportable quantities, and (iv) no Hazardous Substances in
              reportable quantities have been released on any such premises nor
              is there any threat of release of any Hazardous Substances in
              reportable quantities on any such premises.


                                       19
<PAGE>

       l.     SUBSIDIARIES. The Company has no Subsidiaries as of the date of
              this Agreement.

       m.     ORGANIZATION OF LANDEC. Landec is a corporation organized,
              existing and in good standing under the laws of the State of
              California. Landec is qualified to do business in every
              jurisdiction in which: (i) the nature of the business conducted or
              the character or location of properties owned or leased, or the
              residences or activities of employees make such qualification
              necessary, and (ii) failure so to qualify might impair the title
              of Landec's material properties or Landec's right to enforce
              material contracts or result in exposure of Landec to liability
              for material penalties in such jurisdiction. No jurisdiction in
              which Landec is not qualified to do business has asserted in
              writing that Landec is required to be qualified therein. The
              principal office of Landec is located at 3603 Haven Avenue, Menlo
              Park, California 94025-1010. Landec does not conduct any material
              operations or keep any material amounts of property at any other
              location, except at the principal office of its subsidiary, Apio,
              Inc. located at 4575 West Main, Guadalupe, California 93434 and
              41646 Road 62, Reedly, California 93654, and its subsidiary Dock
              Resins Corporation at 1512 West Elizabeth Avenue, Linden, New
              Jersey 07036. Landec has not done business under any name other
              than its present corporate name at any time during the six years
              preceding the date of this Agreement.

       n.     LANDEC AUTHORIZATION; NO CONFLICT. The execution and delivery of
              the Guaranty and the performance thereunder, and the execution and
              delivery of all of the other Loan Documents to which Landec is a
              party and the performance by Landec of its obligations under the
              Guaranty and all of the other Loan Documents to which Landec is a
              party are within Landec's corporate powers, have been duly
              authorized by all necessary corporate action, have received any
              required governmental or regulatory agency approvals and do not
              and will not contravene or conflict with any provision


                                       20
<PAGE>

              of law or of the Articles of Incorporation or ByLaws of Landec or
              of any agreement binding upon Landec or its properties.

       o.     LANDEC VALIDITY AND BINDING NATURE. The Guaranty and all of the
              other Loan Documents to which Landec is a party are the legal,
              valid and binding obligations of Landec, enforceable against
              Landec in accordance with their respective terms, except to the
              extent that enforcement thereof may be limited by bankruptcy,
              insolvency, reorganization, moratorium and other laws enacted for
              the relief of debtors generally and other similar laws affecting
              the enforcement of creditors' rights generally or by equitable
              principles which may affect the availability of specific
              performance and other equitable remedies.

       SECTION 4. COLLATERAL FOR THE OBLIGATIONS. The Obligations shall be
secured and supported as provided in this Section.

       a.     SECURITY AGREEMENT. The Obligations shall be secured by a security
              interest in all equipment, inventory, accounts receivable, chattel
              paper and general intangibles of the Company now owned and
              hereafter acquired and in the proceeds thereof, which security
              interest will be created by a Security Agreement (the "Security
              Agreement") in the form attached as EXHIBIT "E." The Security
              Agreement will provide a security interest in the collateral
              described therein subject only to liens and security interests
              described in the exceptions enumerated in Section 6(b).

       b.     MORTGAGE. The Obligations will further be secured by the mortgage
              lien and security interests created by a Mortgage, Security
              Agreement, Assignment of Rents and Fixture Filing (the "Mortgage")
              on the real estate in White County, Indiana, owned by the Company
              and commonly known as 306 North Main Street, Monticello, Indiana
              47960, (referred to in this Section as the "Real Estate"). The
              Real Estate is more particularly described in the form of the
              Mortgage which is attached as EXHIBIT "F." In


                                       21
<PAGE>

              support of the Mortgage, the Company shall provide to the Bank at
              the Bank's expense the following documentation:

              (i)    TITLE SEARCH. The Bank shall obtain a title search which
                     shall show no liens or encumbrances on the Real Estate
                     other than (i) the Bank's Mortgage, if recorded at the time
                     such search is conducted, (ii) standard exceptions as to
                     rights of parties in possession and matters which would be
                     disclosed by survey which do not materially and adversely
                     affect the value or marketability of the Real Estate or the
                     usefulness of the Real Estate in the operations of the
                     Company, (iii) easements not shown by the public records
                     and mechanic's liens not shown by the public records, and
                     (iv) those liens described in the exceptions enumerated in
                     Section 6(b).

              (ii)   FLOOD HAZARD DETERMINATION FORM. The Bank shall obtain the
                     completion of a Flood Hazard Determination Form from a
                     registered land surveyor or engineer pursuant to the
                     requirements of the Office of the Comptroller of the
                     Currency and the Federal Emergency Management Agency. If
                     such form shows that the Real Estate is in a flood plain,
                     the Company shall be required to obtain flood hazard
                     insurance as required by the Office of the Comptroller of
                     the Currency in order to close the Loans.

       c.     SUBORDINATION AGREEMENT. The indebtedness of the Company to Landec
              in an amount not less than $7,000,000 shall be subordinated to the
              indebtedness of the Company to the Bank under the terms of a
              Subordination Agreement (the "Subordination Agreement") in the
              form of EXHIBIT "G" attached hereto. The Subordination Agreement
              shall not allow payments of principal to be made by Landec unless
              the Company is in compliance with the following financial
              covenants:



                                       22
<PAGE>

              (i)    RATIO OF LIABILITIES TO TANGIBLE CAPITAL BASE. The Company
                     shall maintain at all times the ratio of its total
                     liabilities less Subordinated Debt to its Tangible Capital
                     Base at a level not greater than 2.00 to1.00. For purposes
                     of testing compliance with this covenant, the term
                     "liabilities" shall include the present value of all
                     capital lease obligations of the Company, determined as of
                     any date the ratio is to be tested.

              (ii)   CASH FLOW COVERAGE RATIO. Semiannually on a year-to-date
                     basis measured as of the end of each April and October, the
                     Company shall maintain a cash flow coverage ratio of not
                     less than 1.50 to1.00. For purposes of this covenant, the
                     phrase "cash flow coverage ratio" means the ratio of: (A)
                     the Company's EBITDA over (B) the sum of the principal paid
                     plus interest expense.

       d.     GUARANTY AGREEMENT. The Obligations shall be supported by the
              unconditional guaranty of prompt payment of Landec, which guaranty
              shall be evidenced by a Guaranty Agreement (the "Guaranty
              Agreement") in the form of EXHIBIT "H."

       e.     ASSIGNMENT OF LICENSING AGREEMENT. The Obligations shall further
              be secured by an assignment by the Company to the Bank of all of
              the Company's rights, title, and interest in the Licensing
              Agreements entered into between the Company and Landec which
              assignment shall be evidenced by the Collateral Assignment of
              Licensing Agreement (the "Assignment of Licensing Agreement") in
              the form attached hereto as EXHIBIT "I."

       f.     INTERCREDITOR AGREEMENT. The Bank and Fifth Third Bank, Indiana
              shall enter into an Intercreditor Agreement substantially in the
              form of EXHIBIT "J" attached hereto (the "Intercreditor
              Agreement") setting forth terms


                                       23
<PAGE>

              which, among other things, provide for the acknowledgment by Fifth
              Third Bank, Indiana, as lender to Hubner, of the first priority
              lien rights of the Bank in the Eligible Inventory.

       SECTION 5. AFFIRMATIVE COVENANTS OF THE COMPANY. Until all Obligations of
the Company terminate or are paid and satisfied in full, and so long as the
Commitment or the Capital Expenditure Line of Credit Commitment is outstanding,
the Company shall strictly observe the following covenants.

       a.     CORPORATE EXISTENCE. The Company shall preserve its corporate
              existence, and shall cause Landec to preserve its corporate
              existence.

       b.     REPORTS, CERTIFICATES AND OTHER INFORMATION. The Company shall
              furnish to the Bank copies of the following financial statements,
              certificates and other information:

              (i)    ANNUAL STATEMENTS. As soon as available and in any event
                     within one hundred twenty (120) days after the close of
                     each fiscal year, the consolidated and consolidating
                     financial statements of Landec, which shall have a segment
                     broken out for the Company, for such fiscal year prepared
                     and presented in accordance with generally accepted
                     accounting principles, consistently applied (except for
                     changes in which the independent accountants of Landec
                     concur) in each case setting forth in comparative form
                     corresponding figures for the preceding fiscal year for
                     Landec and for the Company, together with the audit report,
                     unqualified as to scope, of independent certified public
                     accountants approved by the Bank, which approval shall not
                     be unreasonably withheld, together with the management
                     letter, if any, issued by such independent certified public
                     accountants.

              (ii)   INTERIM STATEMENTS. As soon as available and in any event
                     within thirty (30) days after the end of each month, a copy
                     of the interim financial statements of the Company,
                     consisting at a minimum of:


                                       24
<PAGE>

                     A.     the balance sheet as of the end of the month, and

                     B.     a statement of income for the month and for the
                            partial or full fiscal year ended as of the end of
                            the month,

                     all in reasonable detail and accompanied by the written
                     representation of the chief financial officer of the
                     Company that such financial statements have been prepared
                     in accordance with generally accepted accounting principles
                     (except that they need not include a statement of cash
                     flows and footnotes and need not reflect adjustments
                     normally made at year end, if such adjustments are not
                     material in amount), consistently applied, (except for
                     changes in which the independent accountants of the Company
                     concur) and present fairly the financial position of the
                     Company and the results of its operation as of the dates of
                     such statements and for the fiscal periods then ended.

              (iii)  GUARANTOR'S FINANCIAL STATEMENTS. The Company shall provide
                     the Bank within one hundred twenty (120) days after the
                     close of each fiscal year with a copy of Landec's Form
                     10-K. Within forty-five (45) days after the end of each of
                     Landec's fiscal quarters, the Company shall provide to the
                     Bank a copy of Landec's Form 10-Q.

              (iv)   BORROWING BASE CERTIFICATES. At the time of each request
                     for an Advance of the Revolving Loan, within thirty (30)
                     days after the end of each month, a Borrowing Base
                     Certificate as of the date of the Advance or such month
                     end, as applicable, and promptly as of such other dates as
                     the Bank may reasonably require.

              (v)    ORDERS. Prompt notice of any orders in any material
                     proceedings to which the Company is a party, issued by any
                     court or regulatory agency, federal or state, and if the
                     Bank should so request, a copy of any such order.


                                       25
<PAGE>

              (vi)   NOTICE OF DEFAULT OR LITIGATION. Immediately upon learning
                     of the occurrence of an Event of Default or Unmatured Event
                     of Default, or the institution of or any adverse
                     determination in any litigation, arbitration proceeding or
                     governmental proceeding which is material to the Company,
                     or the occurrence of any event which could have a material
                     adverse effect upon the Company, written notice thereof
                     describing the same and the steps being taken with respect
                     thereto.

              (vii)  REGISTRATION STATEMENTS AND REPORTS. Within five (5)
                     Banking Days of the filing by the Company or Landec with
                     the Securities and Exchange Commission or any state
                     securities regulatory authority, complete copies of all
                     registration statements or periodic and special reports
                     filed under federal or state securities laws and
                     regulations.

              (viii) OTHER INFORMATION. From time to time such other information
                     concerning the Company or Landec as the Bank may reasonably
                     request.

       c.     BOOKS, RECORDS AND INSPECTIONS. The Company shall maintain
              complete and accurate books and records. The Company shall permit
              the Bank to inspect such books and records for purposes of copying
              and audit, and inspect its properties and operations, upon
              reasonable notice and all at reasonable times during normal
              business hours; provided, however, that unless there is an Event
              of Default or Unmatured Event of Default, the Bank shall not
              perform more than three (3) such inspections per year.

       d.     INSURANCE. In addition to any insurance required by the Mortgage
              and the Security Agreement, the Company shall maintain such
              insurance as may be required by law and such other insurance, to
              such extent and against such hazards and liabilities, as is
              customarily maintained by companies similarly situated. The
              Company agrees to name the Bank as additional


                                       26
<PAGE>

              loss payee on any such insurance policy under a standard lender's
              loss payable clause and to provide a copy of any such policy to
              the Bank.

       e.     TAXES AND LIABILITIES. The Company shall pay when due all taxes,
              license fees, assessments and other liabilities except such as are
              being contested in good faith and by appropriate proceedings and
              for which appropriate reserves have been established.

       f.     COMPLIANCE WITH LEGAL AND REGULATORY REQUIREMENTS. The Company
              shall maintain material compliance with the applicable provisions
              of all federal, state and local statutes, ordinances and
              regulations and any court orders or orders of regulatory
              authorities issued thereunder.

       g.     PRIMARY BANKING RELATIONSHIP. The Company shall maintain its
              primary concentration and depository accounts with the Bank.

       h.     EMPLOYEE BENEFIT PLANS. The Company shall maintain and shall cause
              any Subsidiary to maintain any Plan in material compliance with
              ERISA, the Code, and all rules and regulations of regulatory
              authorities pursuant thereto and shall file and shall cause any
              Subsidiary to file all reports required to be filed pursuant to
              ERISA, the Code, and such rules and regulations.

       i.     HAZARDOUS SUBSTANCES. If the Company or any Subsidiary should
              commence the use, treatment, transportation, generation, storage
              or disposal of any Hazardous Substance in reportable quantities in
              its operations in addition to those noted in EXHIBIT "D", the
              Company shall immediately notify the Bank of the commencement of
              such activity with respect to each such Hazardous Substance. The
              Company shall cause any Hazardous Substances which are now or may
              hereafter be used or generated in the operations of the Company or
              any Subsidiary in reportable quantities to be accounted for and
              disposed of in compliance with all applicable federal, state and
              local laws and regulations. The Company shall notify the Bank
              immediately upon obtaining actual knowledge that:


                                       27
<PAGE>

              (i)    any premises which have at any time been owned or occupied
                     by or have been under lease to the Company or any
                     Subsidiary are the subject of an environmental
                     investigation by any federal, state or local governmental
                     agency having jurisdiction over the regulation of any
                     Hazardous Substances, the purpose of which investigation is
                     to quantify the levels of Hazardous Substances located on
                     such premises, or

              (ii)   the Company or any Subsidiary has been named or is
                     threatened to be named as a party responsible for the
                     possible contamination of any real property or ground water
                     with Hazardous Substances, including, but not limited to
                     the contamination of past and present waste disposal sites.

              If the Company or any Subsidiary is notified of any event
              described at items (i) or (ii) above, the Company shall
              immediately engage or cause the Subsidiary to engage a firm or
              firms of engineers or environmental consultants appropriately
              qualified to determine as quickly as practical the extent of
              contamination and the potential financial liability of the Company
              or the Subsidiary with respect thereto, and the Bank shall be
              provided with a copy of any report prepared by such firm or by any
              governmental agency as to such matters as soon as any such report
              becomes available to the Company, and Company shall immediately
              take appropriate steps to establish reserves in the amount of the
              potential financial liability of the Company or the Subsidiary
              identified by such environmental consultants or engineers. The
              selection of any engineers or environmental consultants engaged
              pursuant to the requirements of this Section shall be subject to
              the approval of the Bank, which approval shall not be unreasonably
              withheld.


                                       28
<PAGE>

       j.     ANNUAL CLEANUP. The outstanding principal balance of the Revolving
              Loan shall be $0 for a period of thirty (30) consecutive days in
              each fiscal year of the Company.

       SECTION 6. NEGATIVE COVENANTS OF THE COMPANY. Until all Obligations of
the Company terminate or are paid and satisfied in full, and so long as the
Commitment or the Capital Expenditure Line of Credit Commitment is outstanding,
the Company shall strictly observe the following covenants.

       a.     RESTRICTED PAYMENTS. The Company shall not purchase or redeem any
              shares of the capital stock of the Company or declare or pay any
              dividends thereon except for dividends payable entirely in capital
              stock, and the Company shall not make any other distributions to
              shareholders as shareholders, or set aside any funds for any such
              purpose, or prepay, purchase or redeem any Subordinated Debt of
              the Company; provided, however, that notwithstanding the
              foregoing, such distributions, redemptions, dividends and payments
              (each hereinafter called a "Shareholder Payment") may be made at
              any time that no Event of Default or Unmatured Event of Default
              exists at the time of the making of such Shareholder Payment or
              would result from the making thereof, and upon compliance with the
              following financial covenants at the time of the making of such
              Shareholder Payments:

              (i)    RATIO OF LIABILITIES TO TANGIBLE CAPITAL BASE. The Company
                     shall maintain at all times the ratio of its total
                     liabilities less Subordinated Debt to its Tangible Capital
                     Base at a level not greater than 2.00 to 1.00. For purposes
                     of testing compliance with this covenant, the term
                     "liabilities" shall include the present value of all
                     capital lease obligations of the Company, determined as of
                     any date the ratio is to be tested.


                                       29
<PAGE>

              (ii)   CASH FLOW COVERAGE RATIO. Semiannually on a year-to-date
                     basis measured at the end of each April and October, the
                     Company shall maintain a cash flow coverage ratio of not
                     less than 1.50 to1.00. For purposes of this covenant, the
                     phrase "cash flow coverage ratio" means the ratio of: (A)
                     the Company's EBITDA over (B) the sum of the principal paid
                     plus interest expense.

       b.     LIENS. The Company shall not create or permit to exist any
              mortgage, pledge, title retention lien or other lien, encumbrance
              or security interest (all of which are hereafter referred to in
              this subsection as a "lien" or "liens") with respect to any
              property or assets now owned or hereafter acquired except:

              (i)    liens in favor of the Bank created pursuant to the
                     requirements of this Agreement or otherwise;

              (ii)   any lien or deposit with any governmental agency required
                     or permitted to qualify the Company to conduct business or
                     exercise any privilege, franchise or license, or to
                     maintain self-insurance or to obtain the benefits of or
                     secure obligations under any law pertaining to worker's
                     compensation, unemployment insurance, old age pensions,
                     social security or similar matters, or to obtain any stay
                     or discharge in any legal or administrative proceedings, or
                     any similar lien or deposit arising in the ordinary course
                     of business;

              (iii)  any mechanic's, worker's, repairmen's, carrier's,
                     warehousemen's or other like liens arising in the ordinary
                     course of business for amounts not yet due and for the
                     payment of which adequate reserves have been established,
                     or deposits made to obtain the release of such liens;


                                       30
<PAGE>

              (iv)   easements, licenses, minor irregularities in title or minor
                     encumbrances on or over any real property which do not, in
                     the judgment of the Bank, materially detract from the value
                     of such property or its marketability or its usefulness in
                     the business of the Company;

              (v)    liens for taxes and governmental charges which are not yet
                     due or which are being contested in good faith and by
                     appropriate proceedings and for which appropriate reserves
                     have been established;

              (vi)   liens created by or resulting from any litigation or legal
                     proceeding which is being contested in good faith and by
                     appropriate proceedings and for which appropriate reserves
                     have been established;

              (vii)  liens securing indebtedness not exceeding $100,000.00 in
                     the aggregate, provided such liens are subordinated at all
                     times to liens in favor of the Bank securing the
                     Obligations; and

              (viii) those specific liens now existing described on the
                     "Schedule of Exceptions" attached as EXHIBIT "D."

       c.     GUARANTIES. The Company shall not be a guarantor or surety of, or
              otherwise be responsible in any manner with respect to any
              undertaking of any other person or entity, whether by guaranty
              agreement or by agreement to purchase any obligations, stock,
              assets, goods or services, or to supply or advance any funds,
              assets, goods or services, or otherwise, except for:

              (i)    guaranties in favor of the Bank;

              (ii)   guaranties by endorsement of instruments for deposit made
                     in the ordinary course of business; and

              (iii)  those specific existing guaranties listed in the "Schedule
                     of Exceptions" attached as EXHIBIT "D."


                                       31
<PAGE>

       d.     LOANS OR ADVANCES. The Company shall not make or permit to exist
              any loans or advances to any other person or entity, except for:

              (i)    extensions of credit or credit accommodations to customers
                     or vendors made by the Company in the ordinary course of
                     its business as now conducted;

              (ii)   reasonable salary advances to non-executive employees, and
                     other advances to agents and employees for anticipated
                     expenses to be incurred on behalf of the Company in the
                     course of discharging their assigned duties; and

              (iii)  the specific items listed in the "Schedule of Exceptions"
                     attached as EXHIBIT "D."


       e.     MERGERS, CONSOLIDATIONS, SALES, ACQUISITION OR FORMATION OF
              SUBSIDIARIES. The Company shall not be a party to any
              consolidation or to any merger and shall not purchase the capital
              stock of or otherwise acquire any equity interest in any other
              business entity without the prior written consent of the Bank
              which shall not be unreasonably withheld. The Company shall not
              acquire any material part of the assets of any other business
              entity, except in the ordinary course of business. The Company
              shall not sell, transfer, convey or lease all or any material part
              of its assets, except in the ordinary course of business, or sell
              or assign with or without recourse any receivables. The Company
              shall not cause to be created or otherwise acquire any
              Subsidiaries.

       f.     MARGIN STOCK. The Company shall not use or cause or permit the
              proceeds of the Loans to be used, either directly or indirectly,
              for the purpose, whether immediate, incidental or ultimate, of
              purchasing or carrying any margin stock within the meaning of
              Regulation U of the Board of Governors of the Federal Reserve
              System, as amended from time to time.

       g.     OTHER AGREEMENTS. The Company shall not enter into any agreement
              containing any provision which would be violated or breached in
              material


                                       32
<PAGE>

              respect by the performance of its obligations under this Agreement
              or under any other Loan Document.

       h.     JUDGMENTS. The Company shall not permit any uninsured judgment or
              monetary penalty rendered against it in any judicial or
              administrative proceeding to remain unsatisfied for a period in
              excess of forty-five (45) days unless such judgment or penalty is
              being contested in good faith by appropriate proceedings and
              execution upon such judgment has been stayed, and unless an
              appropriate reserve has been established with respect thereto.

       i.     PRINCIPAL OFFICE. The Company shall not change the location of its
              principal office unless it gives not less than ten (10) days prior
              written notice of such change to the Bank.

       j.     HAZARDOUS SUBSTANCES. The Company shall not allow or permit to
              continue the release or threatened release of any Hazardous
              Substance on any premises owned or occupied by or under lease to
              the Company or any Subsidiary.

       k.     DEBT. The Company shall not incur nor permit to exist any
              indebtedness for borrowed money except:

              (i)    to the Bank;

              (ii)   indebtedness permitted to be secured under Section
                     6(b)(vii) herein; and

              (iii)  except for those existing obligations disclosed on the
                     "Schedule of Exceptions" attached as EXHIBIT "D."

       For purposes of this covenant, the phrase "indebtedness for borrowed
       money," shall be construed to include capital lease obligations.

       SECTION 7. CONDITIONS OF LENDING. The obligation of the Bank to make any
Advance and to make the Capital Expenditure Term Loan shall be subject to
fulfillment of each of the following conditions precedent:


                                       33
<PAGE>

       a.     NO DEFAULT. No Event of Default or Unmatured Event of Default
              shall have occurred and be continuing, and the representations and
              warranties of the Company contained in Section 3 shall be true and
              correct as of the date of this Agreement and as of the date of
              each Advance (except for representations and warranties expressly
              made as of a specific time and correct as of such date), except
              that after the date of this Agreement: (i) the representations
              contained in Section 3(d) will be construed so as to refer to the
              latest financial statements furnished to the Bank by the Company
              or Landec pursuant to the requirements of this Agreement, (ii) the
              representations contained in Section 3(k) (with respect to
              Hazardous Substances) will be construed so as to apply not only to
              the Company, but also to any Subsidiaries, (iii) the
              representation contained in Section 3(l) will be construed so as
              to except any Subsidiary which may hereafter be formed or acquired
              by the Company with the consent of the Bank, and (iv) all other
              representations will be construed to have been amended to conform
              with any changes of which the Bank shall previously have been
              given notice in writing by the Company.

       b.     DOCUMENTS TO BE FURNISHED AT CLOSING. The Bank shall have received
              contemporaneously with the execution of this Agreement, the
              following, each duly executed, currently dated and in form and
              substance satisfactory to the Bank:

              (i)    The Revolving Note, the Capital Expenditure Line of Credit,
                     and the Capital Expenditure Term Note.

              (ii)   The Mortgage and requisite Uniform Commercial Code
                     financing statements.

              (iii)  The Security Agreement and requisite Uniform Commercial
                     Code financing statements.

              (iv)   The Subordination Agreement together with a photocopy of
                     the Subordinated Note with the subordination legend
                     thereon.


                                       34
<PAGE>

              (v)    The Guaranty Agreement.

              (vi)   The Collateral Assignment of Licensing Agreement together
                     with complete copies of the Licensing Agreement.

              (vii)  The Schedule of Exceptions.

              (viii) A certified copy of a Resolution of the Board of Directors
                     of the Company authorizing the execution, delivery and
                     performance, respectively, of this Agreement and the other
                     Loan Documents provided for in this Agreement to which the
                     Company is a party.

              (ix)   A certificate of the Secretary of the Board of Directors of
                     the Company certifying the names of the officer or officers
                     authorized to sign this Agreement and the other Loan
                     Documents provided for in this Agreement to which the
                     Company is a party, together with a sample of the true
                     signature of each such officer.

              (x)    A copy of the file-marked Articles of Incorporation of the
                     Company certified as complete and correct as of a recent
                     date by the Secretary of State of Delaware, and a copy of
                     the By-Laws of the Company, certified as complete and
                     correct by the Secretary of the Board of Directors of the
                     Company.

              (xi)   A currently dated Certificate of Good Standing of the
                     Company issued by the Secretary of State of Delaware.

              (xii)  A currently dated Certificate of Existence of the Company
                     issued by the Secretary of State of Indiana.

              (xiii) A certified copy of a Resolution of the Board of Directors
                     of Landec authorizing the execution, delivery and
                     performance, respectively, of the Guaranty , the
                     Subordination Agreement, the Collateral Assignment of
                     Licensing Agreement and the other Loan Documents provided
                     for in this Agreement to which Landec is a party.


                                       35
<PAGE>

              (xiv)  A certificate of the Secretary of the Board of Directors of
                     Landec certifying the names of the officer or officers
                     authorized to sign the Guaranty and the other Loan
                     Documents provided for in this Agreement to which Landec is
                     a party, together with a sample of the true signature of
                     each such officer.

              (xv)   A copy of the file-marked Articles of Incorporation of
                     Landec certified as complete and correct as of a recent
                     date by the Secretary of State of California, and a copy of
                     the By-Laws of Landec, certified as complete and correct by
                     the Secretary of the Board of Directors of Landec.

              (xvi)  A currently dated Certificate of Good Standing of Landec
                     issued by the Secretary of State of California.

              (xvii) A currently dated Certificate of Existence of Landec issued
                     by the Secretary of State of Indiana.

             (xviii) The results of the title search required under the terms
                     of Section 4(b)(i).

              (xix)  Certificates evidencing the existence of all insurance
                     required under the terms of this Agreement or any other
                     Loan Documents.

              (xx)   The commitment fee required under the terms of Section
                     2(d)(iii).

              (xxi)  The Flood Hazard Determination Form required under the
                     terms of Section 4(b)(ii).

              (xxii) A complete copy of the Ownership Acknowledgment Agreement
                     and all amendments thereto, together with all lien waivers
                     and UCC filings by creditors of Hubner.

             (xxiii) The Intercreditor Agreement.

              (xxiv) A complete copy of the Seed Agreement.

              (xxv)  Such other documents as the Bank may reasonably require.

              (xxvi) Fees of legal counsel for the Bank incurred in connection
                     with the drafting, negotiation, and execution of this
                     Agreement.


                                       36
<PAGE>

       SECTION 8. EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:

       a.     NONPAYMENT OF THE LOANS. Default in the payment, within five (5)
              Banking Days of being due, of any amount payable under the terms
              of either of the Notes, or otherwise payable to the Bank or any
              other holder of the Notes under the terms of this Agreement.

       b.     NONPAYMENT OF OTHER INDEBTEDNESS FOR BORROWED MONEY. Default by
              the Company in the payment when due, whether by acceleration or
              otherwise, of any other material indebtedness for borrowed money,
              or default in the performance or observance of any obligation or
              condition with respect to any such other indebtedness if the
              effect of such default is to accelerate the maturity of such other
              indebtedness or to permit the holder or holders thereof, or any
              trustee or agent for such holders, to cause such indebtedness to
              become due and payable prior to its scheduled maturity, unless the
              Company is contesting the existence of such default in good faith
              and by appropriate proceedings.

       c.     OTHER MATERIAL OBLIGATIONS. Subject to the expiration of any
              applicable grace period, default by the Company in the payment
              when due, or in the performance or observance of any material
              obligation of, or condition agreed to by the Company with respect
              to any material purchase or lease of goods, securities or services
              except only to the extent that the existence of any such default
              is being contested in good faith and by appropriate proceedings
              and that appropriate reserves have been established with respect
              thereto.

       d.     BANKRUPTCY, INSOLVENCY, ETC. The Company admitting in writing its
              inability to pay its debts as they mature or an administrative or
              judicial order of dissolution or determination of insolvency being
              entered against the Company; or the Company applying for,
              consenting to, or acquiescing in the appointment of a trustee or
              receiver for the Company or any property


                                       37
<PAGE>

              thereof, or the Company making a general assignment for the
              benefit of creditors; or, in the absence of such application,
              consent or acquiescence, a trustee or receiver being appointed for
              the Company or for a substantial part of its property and not
              being discharged within forty-five (45) days; or any bankruptcy,
              reorganization, debt arrangement, or other proceeding under any
              bankruptcy or insolvency law, or any dissolution or liquidation
              proceeding being instituted by or against the Company, and, if
              involuntary, being consented to or acquiesced in by the Company or
              remaining for forty-five (45) days undismissed.

       e.     WARRANTIES AND REPRESENTATIONS. Any warranty or representation
              made by the Company in this Agreement proving to have been false
              or misleading in any material respect when made, or any schedule,
              certificate, financial statement, report, notice, or other writing
              furnished by the Company to the Bank proving to have been false or
              misleading in any material respect when made or delivered.

       f.     VIOLATIONS OF NEGATIVE COVENANTS. Failure by the Company to comply
              with or perform any covenant stated in Section 6 of this Agreement

       g.     NONCOMPLIANCE WITH OTHER PROVISIONS OF THIS AGREEMENT. Failure of
              the Company to comply with or perform any covenant or other
              provision of this Agreement or to perform any other Obligation
              (which failure does not constitute an Event of Default under any
              of the preceding provisions of this Section 8) and continuance of
              such failure for forty-five (45) days after notice thereof to the
              Company from the Bank.

       SECTION 9. EFFECT OF EVENT OF DEFAULT. If any Event of Default described
in Section 8(d) shall occur, the maturity of the Loans shall immediately be
accelerated and the Notes and the Loans evidenced thereby, and all other
indebtedness and any other payment Obligations of the Company to the Bank shall
become immediately due and payable, and the Commitment and the Capital
Expenditure Line of Credit Commitment shall immediately terminate, all without
notice of any kind.


                                       38
<PAGE>

When any other Event of Default has occurred and is continuing, the Bank or any
other holder of the Notes may accelerate payment of the Loans and declare the
Notes and all other payment Obligations due and payable, whereupon maturity of
the Loans shall be accelerated and the Notes and the Loans evidenced thereby,
and all other payment Obligations shall become immediately due and payable and
the Commitment shall immediately terminate, all without notice of any kind. The
Bank or such other holder shall promptly advise the Company of any such
declaration, but failure to do so shall not impair the effect of such
declaration. The remedies of the Bank specified in this Agreement or in any
other Loan Document shall not be exclusive, and the Bank may avail itself of any
other remedies provided by law as well as any equitable remedies available to
the Bank.

       SECTION 10. WAIVER -- AMENDMENTS. No delay on the part of the Bank, or
any holder of the Notes in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or remedy preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. No amendment,
modification or waiver of, or consent with respect to any of the provisions of
this Agreement or the other Loan Documents or otherwise of the Obligations shall
be effective unless such amendment, modification, waiver or consent is in
writing and signed by the Bank.

       SECTION 11. NOTICES. Any notice given under or with respect to this
Agreement to the Company or the Bank shall be in writing and, if delivered by
hand or sent by overnight courier service, shall be deemed to have been given
when delivered and, if mailed, shall be deemed to have been given five (5) days
after the date when sent by registered or certified mail, postage prepaid, and
addressed to the Company or the Bank (or other holder of the Notes) at its
address shown below, or at such other address as any such party may, by written
notice to the other party to this Agreement, have designated as its address for
such purpose. The addresses referred to are as follows:


                                       39
<PAGE>

         As to the Company:    Intellicoat Corporation
                               306 North Main Street
                               P.O. Box 898 (for mail)
                               Monticello, Indiana 47960
                               Attention:  Michael E. Godlove, Chief
                                           Financial Officer

         As to the Bank:       Old National Bank
                               101 West Ohio Street
                               Suite 1400
                               Indianapolis, Indiana 46204
                               Attention: John T. Travis, Vice President
                                          and Senior Lender

                               with copy to: Madalyn S. Kinsey, Esquire
                                             KROGER, GARDIS & REGAS
                                             Bank One Center/Circle
                                             Suite 900
                                             111 Monument Circle
                                             Indianapolis, Indiana 46204-5175

       SECTION 12. COSTS, EXPENSES AND TAXES. The Company shall pay or reimburse
the Bank on demand for all reasonable out-of-pocket costs and expenses of the
Bank including reasonable attorneys' fees and legal expenses incurred by it in
connection with the drafting, negotiation, execution, and delivery of this
Agreement and the other Loan Documents, and in connection with the enforcement,
or restructuring in the nature of a workout, of this Agreement or any other Loan
Document. The Company shall also reimburse the Bank for expenses incurred by the
Bank in connection with any audit of the books and records or physical assets of
the Company conducted pursuant to any right granted to the Bank under the terms
of this Agreement or any other Loan Document. Such reimbursement shall include,
without limitation, reimbursement of the Bank for its overhead expenses
reasonably allocated to such audits. In addition, the Company shall pay or
reimburse the Bank for all expenses incurred by the Bank in connection with the
perfection of any security interests or mortgage liens granted to the Bank by
the Company and for any stamp or similar documentary or transaction taxes which
may be payable in connection with the execution or delivery of this Agreement or
any other Loan Document or in connection with any other instruments or documents
provided for herein or delivered or required


                                       40
<PAGE>

in connection herewith including, without limitation, expenses incident to any
lien or title search or title insurance commitment or policy. All obligations
provided for in this Section shall survive termination of this Agreement.

       SECTION 13. SEVERABILITY. If any provision of this Agreement or any other
Loan Document is determined to be illegal or unenforceable, such provision shall
be deemed to be severable from the balance of the provisions of this Agreement
or such Document and the remaining provisions shall be enforceable in accordance
with their terms.

       SECTION 14. CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.

       SECTION 15. GOVERNING LAW -- JURISDICTION. Except as may otherwise be
expressly provided in any other Loan Document, this Agreement and all other Loan
Documents are made under and will be governed in all cases by the substantive
laws of the State of Indiana, notwithstanding the fact that Indiana conflicts of
law rules might otherwise require the substantive rules of law of another
jurisdiction to apply. The Company consents to the jurisdiction of any state or
federal court located within Marion County, Indiana, and waives personal service
of any and all process upon the Company. All service of process may be made by
messenger, by certified mail, return receipt requested, or by registered mail
directed to the Company at the address stated in Section 11. The Company waives
any objection which the Company may have to any proceeding commenced in a
federal or state court located within Marion County, Indiana, based upon
improper venue or FORUM NON CONVENIENS. Nothing contained in this Section shall
affect the right of the Bank to serve legal process in any other manner
permitted by law or to bring any action or proceeding against the Company or its
property in the courts of any other jurisdiction.

       SECTION 16. PRIOR AGREEMENTS, ETC. This Agreement supersedes all previous
agreements and commitments made by the Bank and the Company with respect to the
Loans and all other subjects of this Agreement, including, without limitation,
any oral or written proposals or commitments made or issued by the Bank.


                                       41
<PAGE>

       SECTION 17. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon and shall inure to the benefit of the Company
and the Bank and their respective successors and assigns, provided that the
Company's rights under this Agreement shall not be assignable without the prior
written consent of the Bank.

       SECTION 18. WAIVER OF JURY TRIAL. THE BANK (BY ITS ACCEPTANCE HEREOF)AND
THE COMPANY HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE OR CLAIM, WHETHER
BASED UPON CONTRACT, TORT, OR OTHERWISE, BETWEEN THE BANK AND THE COMPANY
ARISING OUT OF, OR IS ANY WAY RELATED TO THE RELATIONSHIP ESTABLISHED BETWEEN
THE COMPANY AND THE BANK BY THIS OR ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP
BETWEEN THE BANK AND THE COMPANY. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
BANK TO ENTER INTO THIS AGREEMENT AND TO PROVIDE THE FINANCING DESCRIBED HEREIN.

       SECTION 19. ARBITRATION. BANK AND THE COMPANY AGREE THAT UPON THE WRITTEN
DEMAND OF EITHER PARTY, WHETHER MADE BEFORE OR AFTER THE INSTITUTION OF ANY
LEGAL PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY JUDGMENT IN THAT
PROCEEDING, ALL DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN THEM, WHETHER
INDIVIDUAL, JOINT, OR CLASS IN NATURE, ARISING FROM THIS AGREEMENT, OR ANY LOAN
DOCUMENT OR OTHERWISE, INCLUDING WITHOUT LIMITATION CONTRACT AND TORT DISPUTES,
SHALL BE RESOLVED BY BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA"). ANY ARBITRATION PROCEEDING HELD
PURSUANT TO THIS ARBITRATION PROVISION SHALL BE CONDUCTED IN THE CITY NEAREST
THE COMPANY'S ADDRESS HAVING AN AAA REGIONAL OFFICE, OR AT ANY OTHER PLACE
SELECTED BY MUTUAL AGREEMENT OF


                                       42
<PAGE>

THE PARTIES. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SHALL CONSTITUTE A
WAIVER OF THIS ARBITRATION AGREEMENT OR BE PROHIBITED BY THIS ARBITRATION
AGREEMENT.

       THIS ARBITRATION PROVISION SHALL NOT LIMIT THE RIGHT OF EITHER PARTY
DURING ANY DISPUTE TO SEEK, USE, AND EMPLOY ANCILLARY OR PRELIMINARY RIGHTS
AND/OR REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON,
PRESERVING, PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER FORCIBLE ENTRY AND
DETAINER FOR POSSESSION OF ANY REAL OR PERSONAL PROPERTY, AND ANY SUCH ACTION
SHALL NOT BE DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES INCLUDE, WITHOUT
LIMITATION, OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER,
INVOKING A POWER OF SALE UNDER ANY DEED OF TRUST OR MORTGAGE; OBTAINING A WRIT
OF ATTACHMENT OR IMPOSITION OF A RECEIVERSHIP; OR EXERCISING ANY RIGHTS RELATING
TO PERSONAL PROPERTY, INCLUDING EXERCISING THE RIGHT OF SETOFF, OR TAKING OR
DISPOSING OF SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO THE
UNIFORM COMMERCIAL CODE. ANY DISPUTES, CLAIMS, OR CONTROVERSIES CONCERNING THE
LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR REMEDY,
CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR OTHERWISE
MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE ARBITRATED;
PROVIDED, HOWEVER THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE POWER TO ENJOIN
OR RESTRAIN ANY ACT OF ANY PARTY. JUDGMENT UPON ANY AWARD RENDERED BY ANY
ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE STATUTE OF
LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES WHICH WOULD
OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE APPLICABLE IN
ANY ARBITRATION


                                       43
<PAGE>

PROCEEDING, AND THE COMMENCEMENT OF AN ARBITRATION PROCEEDING
SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR THESE PURPOSE. THE FEDERAL
ARBITRATION ACT (TITLE 9 OF THE UNITED STATES CODE) SHALL APPLY TO THE
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF THIS ARBITRATION PROVISION.

       Dated as of June 5, 2000.


                                  INTELLICOAT CORPORATION,  a Delaware
                                  corporation



                                  By:________________________________________
                                     Michael E. Godlove, Chief Financial Officer




                                  AMERICAN NATIONAL BANK d/b/a OLD NATIONAL
                                  BANK, a national banking association



                                   By:_______________________________________
                                      John T. Travis, Vice President and
                                      Senior Lender





                                       44
<PAGE>

                              SCHEDULE OF EXHIBITS


Exhibit "A"     -     Promissory Note (Revolving Loan)($3,000,000.00)


Exhibit "B"     -     Promissory Note (Capital Expenditure Line of Credit)
                      ($1,000,000.00)


Exhibit "C"     -     Promissory Note (Capital Expenditure Term Loan)
                      ($1,000,000.00)


Exhibit "D"     -     Schedule of Exceptions


Exhibit "E"     -     Security Agreement (Equipment, Inventory, Accounts
                      Receivable, Chattel Paper, and General Intangibles)


Exhibit "F"     -     Mortgage, Security Agreement, Assignment of Rents and
                      Fixture Filing


Exhibit "G"     -     Subordination Agreement (Landec Corporation)


Exhibit "H"     -     Guaranty Agreement (Landec Corporation)


Exhibit "I"     -     Collateral Assignment of Licensing Agreement


Exhibit "J"     -     Intercreditor Agreement





                                       45
<PAGE>




                       FIRST AMENDMENT TO CREDIT AGREEMENT


     LANDEC AG, INC., formerly know as Intellicoat Corporation, a Delaware
corporation (the "Company") and OLD NATIONAL BANK, formerly known as American
National Bank, a national banking association (the "Bank"), being parties to
that certain Credit Agreement dated as of June 5, 2000 (the "Agreement"), hereby
agree to amend the Agreement by this First Amendment to Credit Agreement (this
"Amendment"), on the terms and subject to the conditions set forth as follows.


     1.   DEFINITIONS. Terms used in this Amendment with their initial letters
capitalized are used as defined in the Agreement, unless otherwise
defined herein.

     a.   AMENDED DEFINITIONS. The following definitions are hereby amended and
          restated in their respective entireties as follows:

          -    "ADVANCE" means a disbursement of proceeds of the Revolving Loan,
               the Capital Expenditure Line of Credit, or the Overline, as the
               context requires.

          -    "LOAN" means any of the Revolving Loan, the Capital Expenditure
               Line of Credit, the Overline, or the Capital Expenditure Term
               Loan, as the context requires, and when used in the plural form
               refers to all of the Loans.

          -    "LOAN DOCUMENT" means any of this Agreement, the Revolving Note,
               the Capital Expenditure Line of Credit Note, the Overline Note,
               the Capital Expenditure Term Note, the Mortgage, the Security
               Agreement, the Subordination Agreement, the Guaranty Agreement,
               the Assignment of Licensing Agreements, the Intercreditor
               Agreement, and any other instrument or document which evidences
               or secures the Loans or any of them or which expresses an
               agreement as to terms applicable to the Loans or any of them, and
               in the plural means any two or more of the Loan Documents, as the
               context requires.

          -    "NOTE" means any of the Revolving Note, the Capital Expenditure
               Line of Credit Note, the Overline Note, or the Capital
               Expenditure Term Note, as the context requires, and when used in
               the plural form refers to all of the Notes.




                                  Page 1 of 9


<PAGE>


          -    "OBLIGATIONS" means all obligations of the Company in favor of
               the Bank of every type and description, direct or indirect,
               absolute or contingent, due or to become due, now existing or
               hereafter arising pursuant to this Agreement and the other
               Loan Documents, including but not limited to: (i) all of such
               obligations on account of the Loans, including any Advances
               made pursuant to any extension of the Commitment beyond the
               initial Revolving Loan Maturity Date, any extension of the
               Capital Expenditure Line of Credit Commitment beyond the
               initial Capital Expenditure Line of Credit Maturity Date, any
               extension of the Overline Commitment beyond the initial
               Overline Maturity Date, or pursuant to any other amendment of
               this Agreement, and (ii) all other obligations arising under
               any Loan Document as amended from time to time.

     b.   NEW DEFINITIONS. The following definitions are hereby added to Section
          1 of the Agreement as follows:

          -    "FIRST AMENDMENT" means that agreement entitled "First Amendment
               to Credit Agreement" between the Company and the Bank dated as of
               December 15, 2000.

          -    "OVERLINE" is used as defined in Section 2(e)(i).

          -    "OVERLINE COMMITMENT" means the agreement of the Bank to extend
               the Overline to the Company until the Overline Maturity Date, and
               if the context so requires, the term may also refer to the
               maximum principal amount which is permitted to be outstanding
               under the Overline at any time.

          -    "OVERLINE MATURITY DATE" means January 15, 2001, and thereafter
               any subsequent date to which the Overline Commitment may be
               extended by the Bank pursuant to the terms of Section 2(e)(iv).

          -    "OVERLINE NOTE" is used as defined in Section 2(e)(ii).


     2.   OVERLINE. A new Section 2(e) is hereby added to the Agreement as
          follows:


     e.   THE OVERLINE. The Bank will make a revolving loan to the Company on
          the following terms and subject to the following conditions:




                                  Page 2 of 9


<PAGE>


          (i)  THE OVERLINE COMMITMENT -- USE OF PROCEEDS. From the date of the
               First Amendment and until the Overline Maturity Date, the Bank
               agrees to make Advances (collectively, the "Overline") under a
               revolving line of credit from time to time to the Company of
               amounts not exceeding in the aggregate at any time outstanding
               the lesser of (A) Two Million Four Hundred Thousand and 00/100
               Dollars ($2,400,000.00) (the "Overline Commitment") or (B) the
               remainder of the Borrowing Base minus the aggregate outstanding
               principal amount of the Revolving Loan, provided that all of the
               conditions of lending stated in this Agreement as being
               applicable to the Overline have been fulfilled at the time of
               each Advance. Proceeds of the Overline may be used by the Company
               only for working capital purposes.

          (ii) METHOD OF BORROWING. The obligation of the Company to repay the
               Overline shall be evidenced by a promissory note (the "Overline
               Note") of the Company in the form of EXHIBIT "A" attached to the
               First Amendment. So long as no Event of Default or Unmatured
               Event of Default shall have occurred and be continuing and until
               the Overline Maturity Date, the Company may borrow, repay and
               reborrow under the Overline Note on any Banking Day; provided,
               that no borrowing may cause the principal balance of the Overline
               to exceed the lesser of the Overline Commitment or the Borrowing
               Base or may result in an Event of Default or an Unmatured Event
               of Default, and provided further, that the Company may receive
               the proceeds of only one Advance per Banking Day. Each Advance
               under the Overline shall be conditioned upon receipt by the Bank
               from the Company of a Borrowing Base Certificate completed as of
               the date of the request. The Bank shall make a disbursement upon
               the oral request of the Company made by an Authorized Officer, or
               upon a request transmitted to the Bank by telephone facsimile
               ("fax") machine, or by any other form of written electronic
               communication (all such requests for Advances being hereafter
               referred to as "Informal Requests"). In so doing, the Bank may
               rely on any Informal Request which shall have been received by it
               in good faith from a person reasonably believed to be an
               Authorized Officer. Upon making each Informal Request, the
               Company shall promptly deliver to the Bank a Borrowing Base
               Certificate completed as of the date of such Informal Request,
               and shall in and of itself constitute the representation of the
               Company that no Event of Default or Unmatured Event of Default
               has occurred and is continuing or would result from the making of
               the requested




                                  Page 3 of 9


<PAGE>


               Advance, and that the making of the requested Advance shall not
               cause the principal balance of the Overline to exceed the lesser
               of the Overline Commitment or the Borrowing Base. All borrowings
               and reborrowings and all repayments shall be in amounts of not
               less than One Thousand Dollars ($1,000.00), except for repayment
               of the entire principal balance of the Overline and except for
               special prepayments of principal required under the terms of
               Section 2(e)(v). Upon receipt of a request for an Advance, a
               Borrowing Base Certificate, and upon compliance with any other
               conditions of lending stated in Section 7 of this Agreement
               applicable to the Overline, the Bank shall disburse the amount of
               the requested Advance to the Company. All Advances by the Bank
               and payments by the Company shall be recorded by the Bank on its
               books and records, and the principal amount outstanding from time
               to time, plus interest payable thereon, shall be determined by
               reference to the books and records of the Bank. The Bank's books
               and records shall be presumed PRIMA FACIE to be correct as to
               such matters.

         (iii) INTEREST ON THE OVERLINE. The principal amount of the Overline
               outstanding from time to time shall bear interest until maturity
               of the Overline Note at a rate per annum equal to the Prime Rate
               plus three-quarters percent (3/4%). After maturity, whether on
               the Overline Maturity Date or on account of acceleration upon the
               occurrence of an Event of Default, and until paid in full, the
               Overline shall bear interest at a per annum rate equal to the
               Prime Rate plus four and three-quarters percent (4-3/4%). Accrued
               interest shall be due and payable monthly on the last Banking Day
               of each month prior to maturity. After maturity, interest shall
               be payable as accrued and without demand.

          (iv) EXTENSIONS OF THE OVERLINE MATURITY DATE. The Bank may, upon the
               request of the Company, but at the Bank's sole discretion, extend
               the Overline Maturity Date from time to time to such date or
               dates as the Bank may elect by notice in writing to the Company,
               and upon any such extension and upon execution and delivery by
               the Company of a Overline Note reflecting the extended maturity
               date, the date to which the Commitment is then extended will
               become the "Overline Maturity Date" for purposes of this
               Agreement.

          (v)  SPECIAL REPAYMENTS OF PRINCIPAL. At any time the outstanding





                                  Page 4 of 9


<PAGE>


               principal balance of the Overline exceeds the maximum amount
               permitted pursuant to Section 2(e)(i)(B) herein (such amount
               hereinafter called the "Maximum Amount"), as determined on the
               basis of the most recent Borrowing Base Certificate furnished by
               the Company or as determined by the Bank upon an inspection of
               the books and records of the Company, the Company shall
               immediately repay that portion of the principal balance of the
               Overline which is in excess of such Maximum Amount. Such
               repayment shall be due without demand.

          (vi) COMMITMENT FEE. The Bank acknowledges receipt from the Company of
               the sum of $12,500.00, either previous to or contemporaneously
               with the execution of this First Amendment, as a fee for the
               Bank's commitment to make the Overline.

     3.   REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter into this
Amendment, the Company affirms that the representations and warranties continued
in the Agreement are correct and accurate as of the date of this Amendment,
except that (i) they shall be deemed also to refer this Amendment, as well as
all documents named herein, and (ii) Section 3(d) shall be deemed also to refer
to the most recent audited and unaudited financial statements of the Company
furnished to the Bank.

     4.   EVENTS OF DEFAULT. The Company certifies to the Bank that no Event of
Default or Unmatured Event of Default under the Agreement has occurred and is
continuing as of the date of this Amendment.

     5.   CONDITIONS PRECEDENT. This Amendment shall become effective upon
receipt of the following by the Bank, duly executed and in form and substance
satisfactory to the Bank:

     a.   This Amendment.

     b.   The Overline Note.

     c.   The Amendment to Mortgage, Security Agreement, Assignment of Rents and
          Fixture Filing in the form attached hereto as EXHIBIT "B."

     d.   The Reaffirmation of Guaranty Agreement in the form attached hereto as
          EXHIBIT "C."




                                  Page 5 of 9


<PAGE>


     e.   The Acknowledgment and Consent of Subordinated Creditor in the form
          attached hereto as EXHIBIT "D."

     f.   UCC-1 Financing Statement to be filed with the Delaware Secretary of
          State.

     g.   UCC-3 Amendment to UCC-1 Financing Statement to be filed with the
          Indiana Secretary of State to amend UCC-1 Financing Statement Number
          2329223 filed on June 8, 2000.

     h.   UCC-4 Amendment to UCC-2 Financing Statement to be filed with the
          Recorder of White County, Indiana to amend UCC-2 Financing Statement
          Number 060000873 filed on June 14, 2000.

     i.   A certified copy of a Resolution of the Board of Directors of the
          Company authorizing the execution, delivery and performance of this
          Amendment and the other Loan Documents named herein to which the
          Company is a party.

     j.   A certificate of the Secretary of the Board of Directors of the
          Company certifying the names of the officer or officers authorized to
          sign this Amendment and other Loan Documents named herein to which the
          Company is a party.

     k.   A certified copy of a Resolution of the Board of Directors of Landec
          authorizing the execution, delivery and performance of the
          Reaffirmation of Guaranty Agreement, the Acknowledgment and Consent of
          Subordinated Creditor, and the other Loan Documents named herein to
          which Landec is a party.

     l.   A certificate of the Secretary of the Board of Directors of the Landec
          certifying the names of the officer or officers authorized to sign the
          Reaffirmation of Guaranty Agreement, the Acknowledgment and Consent of
          Subordinated Creditor, and other Loan Documents named herein to which
          Landec is a party.

     m.   A certified copy of the Articles of Amendment to the Articles of
          Incorporation filed with the Delaware Secretary of State to evidence
          the change of the name of the Company.

     n.   A certified copy of the Application for Amended Certificate of
          Authority approved by the Indiana Secretary of State to evidence the
          change of the




                                  Page 6 of 9


<PAGE>


          name of the Company.

          o.   Certificate of Good Standing issued as of a recent date by the
               Delaware Secretary of State evidencing the change of the name of
               the Company

          p.   Certificate of Existence issued as of a recent date by the
               Indiana Secretary of State evidencing the change of the name of
               the Company.

          q.   Payment of the commitment fee required under the terms of Section
               2(e)(vi).

          r.   Payment of the reasonable attorneys' fees of counsel for the Bank
               incurred in connection with the drafting and negotiation of this
               Amendment; and

          s.   Such other instruments, agreements, and documents as may be
               required by the Bank pursuant hereto.


          6.   EFFECT OF FIRST AMENDMENT. Except as amended by this Amendment,
all of the terms and conditions of the Agreement shall continue unchanged and in
full force and effect together with this Amendment.

     IN WITNESS WHEREOF, the Company and the Bank, by their respective duly
authorized officers, have executed and delivered in Indiana this First Amendment
to Credit Agreement as of December 15, 2000.



                                LANDEC AG, INC., formerly known as
                                Intellicoat Corporation, a Delaware corporation



                                By: ________________________________
                                    Michael E. Godlove, Chief Financial Officer




                                  Page 7 of 9


<PAGE>

                                OLD NATIONAL BANK,  formerly known as
                                American  National Bank, a national banking
                                association



                                By: ________________________________
                                    John T. Travis, Vice President and
                                    Senior  Lender




                                  Page 8 of 9


<PAGE>

<TABLE>
<CAPTION>

                              SCHEDULE OF EXHIBITS
                              --------------------
<S>                <C>        <C>
Exhibit "A"         -          Promissory Note (Overline) ($2,400,000.00)

Exhibit "B"         -          Amendment  to Mortgage,  Security  Agreement,
                               Assignment  of Rents and Fixture Filing

Exhibit "C"         -          Reaffirmation of Guaranty Agreement (Landec
                               Corporation)

Exhibit "D"         -          Acknowledgment   and   Consent   of   Subordinated
                               Creditor (Landec Corporation)
</TABLE>



                                  Page 9 of 9