Document:

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                EXHIBIT 10.8   FORM OF AMERICAN BANK OF CONNECTICUT
       STOCK OPTION ASSUMPTION AGREEMENT FOR AMERICAN BANK OF CONNECTICUT
                           DIRECTORS STOCK OPTION PLAN

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                                     FORM OF
                        AMERICAN FINANCIAL HOLDINGS, INC.
           STOCK OPTION ASSUMPTION AGREEMENT FOR THE AMERICAN BANK OF
                     CONNECTICUT DIRECTORS STOCK OPTION PLAN

OPTIONEE:             [NAME]

        THIS STOCK OPTION ASSUMPTION AGREEMENT is hereby issued as of the ___
day of January, 2002, by American Financial Holdings, Inc., a Delaware
corporation ("AMFH").

        WHEREAS, the undersigned individual ("Optionee") holds one or more
outstanding options to purchase shares of the common stock of American Bank of
Connecticut ("ABC"), which were granted to Optionee under the American Bank of
Connecticut Directors Stock Option Plan (the "Plan"), and are evidenced by an
award agreement or similar documentation (the "Award Agreement") between ABC and
the Optionee, which are incorporated by reference herein.

        WHEREAS, effective as of January 18, 2002 (the "Effective Time"), ABC
has merged with and into AMFH (the "Merger") pursuant to the Agreement and Plan
of Merger (the "Merger Agreement"), dated as of July 18, 2001, by and between
ABC and AMFH.

        WHEREAS, the Merger Agreement provides that, as of the Effective Time,
by virtue of the Merger and without any action on the part of the Optionee, each
option granted by ABC to purchase shares of ABC common stock that is outstanding
and unexercised, shall be converted into an option to purchase shares of AMFH
common stock at an exercise price determined in accordance with Section 1.8 of
the Merger Agreement.

        NOW, THEREFORE, it is hereby agreed as follows:

        1. The number of shares of ABC common stock subject to the stock
option(s) held by Optionee under the Plan immediately prior to the Effective
Time, and the exercise price payable per share are set forth in Exhibit A
hereto.

        2. AMFH hereby assumes, as of the Effective Time, all of the duties and
obligations of ABC under each of the options as set forth in the Plan,
Optionee's Award Agreement, or similar documentation containing the terms and
conditions of the option grant.

        3. In connection with such option assumption by AMFH, the number of
shares of AMFH Common Stock purchasable under each ABC option hereby assumed,
and the exercise price payable thereunder, have been adjusted in accordance with
the provisions of Section 1.8 of the Merger Agreement for the conversion of the
ABC options. Accordingly, the number of shares of AMFH common stock subject to
each ABC option hereby assumed as of the Effective Time shall be as specified in
the attached Exhibit A, and the adjusted exercise price payable per share of
AMFH common stock under the assumed ABC option shall be as indicated in the
attached Exhibit A.

        4. The following additional provisions shall govern each ABC option
hereby assumed by AMFH:

               (a) Unless the context otherwise requires, all references in each
Award Agreement and in the applicable plan document (as incorporated by
reference in such Award Agreement) (i) to the "Company" shall mean AMFH, (ii) to
"Common Stock" shall mean shares of AMFH Common Stock, (iii) to the "Board

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of Directors" shall mean the Board of Directors of AMFH, (iv) to the "Committee"
shall mean the Committee of AMFH which administers the Plan and (v) to the
"Bank" shall mean American Savings Bank.

               (b) The grant date and the expiration date for each assumed ABC
option and all other provisions, unless otherwise specified herein, which govern
either the exercisability or the termination of the assumed ABC option shall
remain the same as set forth in the Award Agreement applicable to that option
and the provisions of the Plan document, and shall accordingly govern and
control Optionee's rights to purchase AMFH common stock under this Stock Option
Assumption Agreement.

               (c) The adjusted exercise price payable for the AMFH Common Stock
subject to each assumed ABC option shall be payable in any of the forms
authorized under the Plan and the Award Agreement applicable to that option.

               (d) All unexercised options subject to the Optionee's Award
Agreement and assumed hereby shall be 100% vested as of the Effective Time.

               (e) In order to exercise each assumed ABC option, Optionee must
deliver to AMFH a written notice of exercise which indicates the number of
shares of AMFH Common Stock to be purchased, accompanied by payment of the
adjusted exercise price. Such notice shall be delivered to AMFH at the following
address:

                      American Savings Bank
                      Human Resources Department
                      102 West Main Street
                      New Britain, Connecticut 06050

        5. Except to the extent specifically modified by this Stock Option
Assumption Agreement, all of the terms and conditions of each Award Agreement,
as in effect immediately prior to the Merger, shall continue in full force and
effect and shall not in any way be amended, revised or otherwise affected by
this Stock Option Assumption Agreement.

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        IN WITNESS WHEREOF, AMFH has caused this Stock Option Assumption
Agreement to be executed on its behalf by its duly authorized officer as of the
___ day of January, 2002.

                                            AMERICAN FINANCIAL HOLDINGS, INC.

                                            By: ________________________________

                                            Title: _____________________________

                                 ACKNOWLEDGMENT

        The undersigned acknowledges receipt of this Stock Option Assumption
Agreement and understands and acknowledges that all rights and liabilities with
respect to each of his ABC options hereby assumed by AMFH are as set forth only
in the Award Agreement, the Plan and this Stock Option Assumption Agreement, and
that no other agreements exist with respect to his ABC options. The undersigned
also acknowledges that, except to the extent specifically modified by this Stock
Option Assumption Agreement, all of the terms and conditions of the Award
Agreement, as in effect immediately prior to the Effective Time, shall continue
in full force and effect and shall not be otherwise affected by this Stock
Option Assumption Agreement. The undersigned further acknowledges that the ABC
options described in Exhibit A hereto constitute all of the options or other
rights to purchase ABC common stock that he owned immediately prior to the
Effective Time of the Merger.

                                            OPTIONEE

                                            ____________________________________
                                            [NAME]

                                            DATE:  _____________________________

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                                    EXHIBIT A

                Optionee's Outstanding Options to Purchase Shares
                  of American Bank of Connecticut Common Stock
                                  (Pre-Merger)

DATE OF OPTION GRANT      NUMBER OF OUTSTANDING STOCK   EXERCISE PRICE PER SHARE
--------------------      ---------------------------   ------------------------
                                    OPTIONS
                                    -------

                Optionee's Outstanding Options to Purchase Shares
                of American Financial Holdings, Inc. Common Stock
                                  (Post-Merger)

DATE OF OPTION GRANT     NUMBER OF OUTSTANDING STOCK    EXERCISE PRICE PER SHARE
--------------------     ---------------------------    ------------------------
                                    OPTIONS
                                    -------

                                        4Prepared by MERRILL CORPORATION

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Exhibit 4.2    
  

 
 

LANDEC CORPORATION
  
    SERIES B PREFERRED STOCK PURCHASE AGREEMENT
  
    October 24, 2001    
  

 
 

LANDEC CORPORATION
  
    SERIES B PREFERRED STOCK PURCHASE AGREEMENT

    This
Series B Preferred Stock Purchase Agreement (the "Agreement") is made as of October 24, 2001 by and between Landec
Corporation, a California corporation (the "Company"), and Seahawk Ranch Irrevocable Trust (the
"Purchaser"). 

    The
parties hereby agree as follows: 

    1.  Purchase and Sale of Preferred Stock.  

1.1  Sale and Issuance of Preferred Stock.  

    (a) As
of the Closing (as defined below) Company will have authorized the issuance, pursuant to the terms and conditions of this Agreement, of 142,857 shares of
Series B Preferred Stock, $0.001 par value (the "Series B Preferred Stock") having the rights, preferences, privileges and restrictions
set forth in the Certificate of Determination of Rights, Preferences and Privileges of Series B Preferred Stock attached to this Agreement as  Exhibit A (the "Certificate
of Determination"), and shall have filed the Certificate of
Determination with the California Secretary of State. 

    (b) Subject
to the terms and conditions of this Agreement, the Purchaser agrees to purchase at the Closing and the Company agrees to sell and issue to the Purchaser at
the Closing 142,857 shares of Series B Preferred Stock at a purchase price of $35.00 per share. The shares of Series B Preferred Stock issued to the Purchaser pursuant to this Agreement
shall be hereinafter referred to as the "Stock", and the Common Stock of the Company issuable upon conversion of the Stock shall be hereinafter referred
to as the "Converted Common Stock". 

    1.2  Closing; Delivery.  

    (a) The
purchase and sale of the Stock shall take place at the offices of Orrick, Herrington & Sutcliffe LLP, 1020 Marsh Road, Menlo Park, California, at
10:00 a.m., on October 24, 2001, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing (which time and place are designated as the
"Closing"). 

    (b) At
the Closing, the Company shall deliver to the Purchaser a certificate representing the Stock being purchased thereby against payment of the purchase price
therefor by certified check or by wire transfer to the Company's bank account. 

    2.  Representations, Warranties and Covenants of the Company.  The Company
hereby represents, warrants and covenants to the Purchaser as follows: 

    2.1  Organization, Good Standing and Qualification.  The Company is a
corporation duly organized, validly existing and in good standing under the laws of the State of California and has all requisite corporate power and authority to carry on its business as now
conducted and as proposed to be conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a material
adverse effect on its business or properties. 

    2.2  Authorization.  All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement and the
Standstill Agreement in the form attached hereto as Exhibit B (the "Standstill Agreement") to be
executed by the Purchaser, the performance of all obligations of the Company hereunder and thereunder and the authorization, issuance and delivery of the Stock and the Converted Common Stock
(together, the "Securities") has been taken or will be taken prior to the Closing, and the Agreement, when executed and delivered by the Company, shall
constitute a valid and legally binding obligations of the Company, enforceable against the Company in accordance with its terms except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and other laws of general application affecting enforcement of creditors' rights generally, as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies. 

 

    2.3  Valid Issuance of Securities.  The Stock that is being issued to the
Purchaser hereunder, when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free
of restrictions on transfer other than restrictions on transfer under this Agreement, the Standstill Agreement and those set forth under the Certificate of Determination and applicable state and
federal securities laws. Based in part upon the representations of the Purchaser in this Agreement and subject to the provisions of Section 2.5 below, the Stock will be issued in compliance
with all applicable federal and state securities laws. The Converted Common Stock has been duly and validly reserved for issuance, and upon issuance in accordance with the terms of the Certificate of
Determination, shall be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, the Standstill Agreement
and applicable federal and state securities laws and will be issued in compliance with all applicable federal and state securities laws. 

    2.4  Governmental Consents.  No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of the Company is required in connection with the consummation of
the transactions contemplated by this Agreement and the Standstill Agreement, except for such filings as may be required to be made with the Securities and Exchange Commission (the
"SEC") and the Nasdaq National Market and similar filings under applicable state securities laws. 

    2.5  Disclosure.  The Company has made available to the Purchaser all documents
(other than preliminary materials) filed with the SEC since January 1, 2000 (the "SEC Documents"). As of their respective filing dates, the SEC
Documents complied in all material respects with the requirements of the Securities Act of 1933 (the "Securities Act") or the Securities Exchange Act of
1934 (the "Exchange Act"), as applicable. Neither the Agreement nor any of the SEC Documents as of their respective dates included an untrue statement
of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents (the "Financial Statements") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC with respect thereto. The Financial Statements have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present the consolidated financial position of the Company and any subsidiaries at the dates thereof
and the consolidated results of their operations and consolidated cash flows for the periods then ended (subject, in the case of unaudited statements, to normal, recurring adjustments). 

    2.6  Changes.  Except as disclosed herein or in reports filed with the SEC by
the Company, since July 29, 2001, there has not been (a) any change in the assets, liabilities, financial condition, business prospects or operations of the Company from those reflected
in the Financial Statements, except changes in the ordinary course of business which, individually and in the aggregate, have not had a material adverse effect on the Company and its subsidiaries
considered as one enterprise; (b) any material change or amendment to a contract or arrangement by which the Company or any of its assets or properties is bound or subject and filed as an
exhibit to the SEC Documents; (c) any resignation or termination of employment, or to the Company's knowledge, any impending resignation or termination of employment, of any executive officer
of the Company; or (d) any declaration or payment of any dividend or other distribution of assets of the Company. 

    2.7  No Conflicts.  The execution, delivery, and performance of and compliance
with this Agreement and the Standstill Agreement, and the issuance and sale of the Stock pursuant hereto and of the Converted Common Stock pursuant to the Certificate of Determination, are not
prohibited by, and will not violate or conflict with, any provision of the Articles of Incorporation or Bylaws of the Company, or any provision of any contract to which the Company is a party, 

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except where any of the foregoing would not have, individually or in the aggregate, a material adverse effect on the Company. 

    3.  Representations and Warranties of the Purchaser.  The Purchaser hereby
represents and warrants to the Company that: 

    3.1  Authorization.  This Agreement and the Standstill Agreement has been duly
authorized by all necessary action on the part of the Purchaser and, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable
in accordance with their terms, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting
enforcement of creditors' rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies. 

    3.2  Purchase Entirely for Own Account.  This Agreement is made with the
Purchaser in reliance upon the Purchaser's representation to the Company, which by the Purchaser's execution of this Agreement, the Purchaser hereby confirms, that the Securities to be acquired by the
Purchaser will be acquired for investment for the Purchaser's own account, not as a nominee or agent for any person or entity and not with a view to the resale or distribution of any part thereof, and
that the Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any
contract, undertaking, agreement or arrangement with any person or entity to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities. The
Purchaser represents that it has full power and authority to enter into this Agreement. 

    3.3  Disclosure of Information.  The Purchaser has had an opportunity to discuss
the Company's business, management, financial affairs and the terms and conditions of the offering of the Stock with the Company's management and has reviewed the SEC Documents. The Purchaser
understands that such discussions, as well as the written information issued by the Company, were intended to describe the aspects of the Company's business which it believes to be material. 

    3.4  Restricted Securities.  The Purchaser understands that the Securities have
not been registered under the Securities Act, by reason of a specific exemption from the registration provisions of the Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as expressed herein. The Purchaser understands that the Securities are "restricted securities" under applicable U.S. federal
and state securities laws and that, pursuant to these laws, the Purchaser must hold the Securities indefinitely unless they are registered with the SEC and qualified by state authorities, or an
exemption from such registration and qualification requirements is available. The Purchaser acknowledges that if an exemption from registration or qualification is available, it may be conditioned on
various requirements including, but not limited to, the time and manner of sale, the holding period for the Securities, and on requirements relating to the Company which are outside of the Purchaser's
control, and which the Company may not be able to satisfy. 

    3.5  Legends.  The Purchaser understands that the Securities and any securities
issued in respect of or exchange for the Securities, may bear one or all of the following legends: 

    (a) "THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED UNLESS: (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO,
(II) THERE IS AN OPINION OF COUNSEL IN A 

3

 

FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE ACT, OR (III) THE SHARES ARE SOLD PURSUANT TO RULE 144 PROMULGATED UNDER THE ACT." 

    (b) Any
legend required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate so legended. 

    3.6  Accredited Investor.  The Purchaser is an accredited investor as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act. 

    4.  Registration Requirements.  

    4.1  Shelf Registration.  The Company shall use its best efforts to prepare and
file with the Securities and Exchange Commission (the "SEC") a Registration Statement pursuant to Rule 415 (or any appropriate similar rule that
may be adopted by the SEC) under the Securities Act covering the Converted Common Stock (including any amendment thereto, the "Shelf Registration") not
later than ninety (90) days after the date the Purchaser notifies the Company of its intent to convert all or a portion of the Stock (the "Filing
Date"). The Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Converted Common Stock for resale by the
Purchaser from time to time. The Purchaser agrees to furnish promptly to the Company in writing all information required from time to time to be disclosed in order to make the information previously
furnished to the Company by such holder not misleading. 

    4.2  Effectiveness.  The Company shall use its best efforts to cause the Shelf
Registration to become effective under the Securities Act not later than one hundred twenty (120) days after the Conversion Date (the "Effective
Date"). Subject to the requirements of the Securities Act including, without limitation, requirements relating to updating through post-effective amendments,
prospectus supplements or otherwise, the Company shall use its best efforts to keep the Shelf Registration continuously effective and in compliance with the Securities Act until the earlier of
(i) such date as all of the Converted Common Stock have been resold, or (ii) all of the Converted Common Stock may be sold under Rule 144 under the Securities Act
("Rule 144") during any ninety (90) day period. The Company shall use reasonable commercial efforts to take such actions under the laws of
various states as may be required, from time to time during the effectiveness of the Shelf Registration (and subject to the Purchaser's compliance with its obligations hereunder), to cause the resale
of the Converted Common Stock pursuant to the Shelf Registration to be lawful. 

    4.3  Suspension Periods.  Following the effectiveness of the Shelf Registration
filed pursuant to this Section 4, the Company may, at any time, suspend the effectiveness of such Shelf Registration for up to thirty (30) days, as appropriate (a
"Suspension Period"), by giving notice to the Purchaser, if the Company shall have determined, through action by its Board of Directors, that the
Company may be required to disclose any material corporate development, which disclosure, in the judgment of the Company's Board of Directors, could reasonably be expected to have a material adverse
effect on the Company; and at least two (2) business days prior to implementing any such Suspension Period, the Company shall deliver to the Purchaser a certificate to that effect.
Notwithstanding the foregoing, no more than two (2) Suspension Periods may occur in any calendar year. The Company shall use its reasonable commercial efforts to limit the duration and number
of any Suspension Periods, including, without limitation, preparing and filing with the SEC post-effective amendments to the Shelf Registration and/or prospectus supplements to the
prospectus included in the Shelf Registration. The Purchaser agrees that, upon receipt of notice from the Company of a Suspension Period in accordance
with the provisions of this Section 4.3, the Purchaser shall forthwith discontinue disposition of shares covered by such registration statement or prospectus in accordance with the provisions
of this Section 4.3 until the Purchaser (i) is advised in writing by the Company that the applicable Suspension Period has been 

4

 

terminated and the use of the prospectus may be resumed, (ii) has received copies of a supplemental or amended prospectus, if applicable, and (iii) has received copies of any additional
or supplemental filings which are incorporated or deemed to be incorporated by reference in such prospectus. The Purchaser shall treat any information relating to a Suspension Period, including its
receipt of notice of a Suspension Period, as confidential information of the Company, and shall not use or disclose any such information except with the prior written consent of the Company. 

    4.4  Registration Expenses.  The Company shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance hereunder, and the Purchaser shall pay all Selling Expenses (as defined below) and other expenses that are not
Registration Expenses relating to the Converted Common Stock resold by the Purchaser. "Registration Expenses" shall mean all expenses, except for
Selling Expenses, incurred by the Company in complying with the registration provisions herein described, including, without limitation, all registration, qualification and filing fees, printing
expenses, escrow fees, fees and expenses in connection with listing the Converted Common Stock for quotation on Nasdaq NMS, fees and disbursements of counsel for and the independent auditors of the
Company, blue sky fees and expenses, the expense of any special audits incident to or required by any such registration and the reasonable fees and expenses of one special counsel to the Purchaser.
"Selling Expenses" shall mean selling commissions, underwriting fees and stock transfer taxes applicable to the Converted Common Stock. 

    4.5  Notification.  In addition to the Company's other obligations under this
Section 4, in connection with the registration of the Converted Common Stock on the Shelf Registration, the Company shall: 

    (a) As
promptly as practicable after becoming aware of such event, notify the Purchaser of the occurrence of any event, as a result of which the prospectus included in
the Shelf Registration, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, and promptly prepare an amendment to the Shelf Registration and supplement to the prospectus to correct such untrue statement
or omission, and deliver a number of copies of such supplement and amendment to the Purchaser as the Purchaser may reasonably request; and 

    (b) As
promptly as practicable after becoming aware of such event, notify the Purchaser who holds Converted Common Stock being sold of the issuance by the SEC of any
stop order or other suspension of the effectiveness of the Shelf Registration at the earliest possible time and take all lawful action to effect the withdrawal, recession or removal of such stop order
or other suspension; and 

    (c) With
a view to making available to the Purchaser the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit the
Purchaser to sell Converted Common Stock to the public without registration or pursuant to registration, the Company covenants and agrees to use its reasonable commercial efforts to: (i) make
and keep public information available, as those terms are understood and defined in Rule 144, until the earlier of (A) the date that is thirty (30) months from the date of the
Closing or (B) such date as all of the Converted Common Stock shall have been resold; and (ii) file with the SEC in a timely manner all reports and other documents required of the
Company under the Exchange Act. 

    4.6  Indemnification and Contribution. 

    (a) The
Company agrees to indemnify and hold harmless the Purchaser from and against any losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) to which the Purchaser (including for such purpose its officers, directors, partners, attorneys and 

5

 

agents) may become subject (under the Securities Act or otherwise) to the extent such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based
upon, any untrue statement of a material fact contained in the Shelf Registration or the prospectus (including any supplement) contained therein or arise out of, or are based upon, the omission to
state therein a material fact required to be stated therein or necessary to make the statements therein (in light of the circumstances under which they were made in the case of the prospectus), not
misleading, or to the extent arising out of any failure by the Company to fulfill any undertaking included in the Shelf Registration, and the Company will, on a quarterly basis, reimburse the
Purchaser for any legal or other expenses reasonably incurred in investigating or defending any such action, proceeding or claim; provided, however, that the Company shall not be liable in any such
case to the extent that such loss, claim, damage or liability arises out of, or is based upon (i) an untrue statement made in such Shelf Registration in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Purchaser, (ii) the failure of the Purchaser to comply with the covenants and agreements contained in this Agreement, or
(iii) any untrue statement in any prospectus that is corrected in any subsequent prospectus that was delivered to the Purchaser prior to the pertinent sale or sales by the Purchaser. 

    (b) The
Purchaser agrees to indemnify and hold harmless the Company (including for such purpose its officers, directors, partners, attorneys and agents) from and
against any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) to which the Company may become subject (under the Securities Act or otherwise) to the extent such
losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon any untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration or the prospectus (including any supplement) contained therein or to the extent arising out of, or are based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein (in light of the circumstances under which they were made in the case of the prospectus), not misleading, in each case,
to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Purchaser
specifically for use in preparation of the Shelf Registration. Notwithstanding the foregoing, the liability of the Purchaser under this Section 4.6(b) shall be limited to an amount equal to the
net proceeds from the sale of the shares sold by the Purchaser. 

    (c) Promptly
after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 4.6, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action (but the omission
to so notify the indemnifying party shall not relieve it from any liability that it otherwise may have to the indemnified party, except to the extent that the indemnifying party is materially
prejudiced and forfeits substantive rights and defenses by reason of such failure), and, subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified
person and the indemnifying person shall have been notified thereof, the indemnifying person shall be entitled to participate therein, and, in the case of any claim as to which both the indemnified
party and the indemnifying party are parties, to the extent that it shall wish, the indemnifying party may assume the defense thereof, with counsel reasonably satisfactory to the indemnified person.
After notice from the indemnifying person to such indemnified person of the indemnifying person's election to assume the defense thereof, the indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof; 

6

 

provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate in the reasonable judgment of the indemnified person for the same counsel to represent
both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying
person. If the indemnifying party shall assume the defense of any such claim, it shall not, without prior written consent of the indemnified party (which consent shall not unreasonably be withheld),
settle or compromise any such claim or consent to the entry of any judgment that does not include an unconditional release of the indemnified party from all liabilities with respect to such claim or
judgment. Further, no indemnifying party shall have any obligation with respect to any settlement entered into by an indemnified party without the prior written approval of this indemnifying party. 

    (d) If
the indemnification provided for in this Section 4.6 is unavailable to or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and the Purchaser on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities
(or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Purchaser on the other and the
parties' relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Purchaser agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 

    4.7  NASDAQ NMS Listing.  The Company shall use its reasonable commercial efforts
to cause the Converted Common Stock to be listed for inclusion on the Nasdaq National Market System no later than on the Effective Date. 

    4.8  Transfer of Registration Rights.  The rights to cause the Company to
register the Converted Common Stock under this Section 4 may be assigned to a transferee or assignee that is an affiliate (as such term is defined in Rule 405 of the Securities Act) of
the Purchaser provided that: (i) such transfer is otherwise effected in accordance with applicable securities laws, (ii) written notice is promptly given to the Company and
(iii) such transferee agrees to be bound by the provisions of this Agreement. 

    5.  Covenants of the Company.  

    5.1  The Purchaser's Filings.  The Company shall use its reasonable commercial
efforts to assist the Purchaser and its affiliates in preparing and filing all reports required by the Purchaser and its affiliates under the Exchange Act as a result of the transactions under this
Agreement, including Schedule 13D and Form 4, and shall bear all of the expenses relating to the preparation and filing of such reports. 

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    6.  Conditions of the Purchaser's Obligations at the Closing.  The obligations
of the Purchaser to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived: 

    6.1  Representations and Warranties.  The representations and warranties of the
Company contained in Section 2 shall be true and correct in all material respects on and as of the Closing with the same effect as though such representations and warranties had been made on
and as of the date of the Closing. 

    6.2  Performance.  The Company shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing. 

    6.3  Compliance Certificate.  The President of the Company shall deliver to the
Purchaser at the Closing a certificate certifying that the conditions specified in Sections 6.1 and 6.2 have been fulfilled. 

    6.4  Qualifications.  All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Stock pursuant to this Agreement shall be
obtained and effective as of the Closing. 

    6.5  Opinion of Company Counsel.  The Purchaser shall have received from Orrick,
Herrington & Sutcliffe LLP, counsel for the Company, an opinion, dated as of the Closing, in substantially the form of Exhibit C.

    6.6  Certificate of Determination.  The Company shall have filed the Certificate
of Determination with the Secretary of State of California on or prior to the date of the Closing, and the Certificate of Determination shall continue to be in full force and effect as of the date of
the Closing. 

    6.7  Standstill Agreement.  The Company and the Purchaser shall have executed
and delivered the Standstill Agreement between the Company and the Purchaser in the form attached hereto as Exhibit B. 

    6.8  Governmental Consents.  There shall have been obtained at or prior to the
date of the Closing such permits or authorizations, and there shall been taken such other action, as may be required by any regulatory authority having jurisdiction over the parties and the subject
matter and the actions herein proposed to be taken. 

    6.9  Legal Investment.  At the time of the Closing the purchase and sale of the
Stock shall be legally permitted by all laws and regulations to which the Purchaser and the Company are subject. 

    7.  Conditions of the Company's Obligations at the Closing.  The obligations of
the Company to the Purchaser under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived: 

    7.1  Representations and Warranties.  The representations and warranties of the
Purchaser contained in Section 3 shall be true and correct in all material respects on and as of the Closing with the same effect as though such representations and warranties had been made on
and as of the Closing. 

    7.2  Performance.  All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the Closing shall have been performed or complied with in all material respects. 

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    7.3  Qualifications.  All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Stock pursuant to this Agreement shall be
obtained and effective as of the Closing. 

    7.4  Standstill Agreement.  The Company and the Purchaser shall have executed
and delivered the Standstill Agreement between the Company and the Purchaser. 

    7.5  Governmental Consents.  There shall have been obtained at or prior to the
date of the Closing such permits or authorizations, and there shall been taken such other action, as may be required by any regulatory authority having jurisdiction over the parties and the subject
matter and the actions herein proposed to be taken. 

    7.6  Legal Investment.  At the time of the Closing the purchase and sale of the
Stock shall be legally permitted by all laws and regulations to which the Purchaser and the Company are subject. 

    8.  Miscellaneous.  

    8.1  Survival of Warranties.  Unless otherwise set forth in this Agreement, the
warranties, representations and covenants of the Company and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Closing
for a period of four (4) years following the Closing. 

    8.2  Transfer; Successors and Assigns.  The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party
other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 

    8.3  Governing Law.  This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of
conflicts of law. 

    8.4  Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall constitute one instrument. 

    8.5  Titles and Subtitles.  The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or interpreting this Agreement. 

    8.6  Notices.  Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by telegram or fax, or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at the address set forth on the signature page hereof, or as subsequently modified by written notice,
and (a) if to the Company, with a copy to: 

Orrick,
Herrington & Sutcliffe LLP

1020 Marsh Road

Menlo Park, CA 94025

Fax: 650-614-7401

Attn: Geoffrey P. Leonard 

or
(b) if to the Purchaser, with a copy to: 

Cooley
Godward LLP

Five Palo Alto Square

3000 El Camino Real

9

 

Palo Alto, CA 94306

Direct: (650) 843-5191

Fax: (650) 849-7400

Attn: Brett White 

    8.7  Finder's Fee.  Each party represents that it neither is, nor will be,
obligated for any other finder's fee or commission in connection with this transaction. The Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or
compensation in the nature of a finder's fee (and the costs and expenses of defending against such liability or asserted liability) for which the Purchaser or any of its officers, employees, or
representatives is responsible. The Company agrees to indemnify and hold harmless the Purchaser from any liability for any commission or compensation in the nature of a finder's fee (and the costs and
expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible. 

    8.8  Fees and Expenses.  Each party shall pay its own fees and expenses
irrespective of whether the Closing occurs; provided, however, that in the event the Closing occurs, the Company shall pay the legal fees and expenses incurred by the Purchaser in connection with the
transactions under this Agreement, such fees and expenses not to exceed $10,000. 

    8.9  Attorney's Fees.  If any action at law or in equity (including arbitration)
is necessary to enforce or interpret the terms of any of the Agreements, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled. 

    8.10  Amendments and Waivers.  Any term of this Agreement may be amended with
the written consent of the Company and the holders of at least a majority of the Converted Common Stock (calculated on an as-if-converted basis). Any amendment or waiver
effected in accordance with this Section 8.10 shall be binding upon the Purchaser and each transferee of the Stock (or the Converted Common Stock), each future holder of all such securities,
and the Company. 

    8.11  Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such
provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms. 

    8.12  Delays or Omissions.  No delay or omission to exercise any right, power or
remedy accruing to any holder of any of the Stock, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed
a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver
on the part of any holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative. 

    8.13  Entire Agreement.  This Agreement, and the documents referred to herein
constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties hereto are expressly
canceled. 

10

 

    8.14  Corporate Securities Law.  THE SALE OF THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE
RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT. 

    [Signature
Pages Follow] 

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    The parties have executed this Series B Preferred Stock Purchase Agreement as of the date first written above. 

	 	 	COMPANY:
	

 	
 	

LANDEC CORPORATION
	

 	
 	

By:	

  
 Gary T. Steele, President and CEO
	

 	
 	

Address:	

Landec Corporation

3603 Haven Avenue

Menlo Park, CA 94025

Tel: (650) 306-1650

Fax: (650) 261-3616
	

 	
 	
PURCHASER:
	

 	
 	

SEAHAWK RANCH IRREVOCABLE TRUST
	

 	
 	

By:	

  
 Kenneth E. Jones, Trustee
	

 	
 	

Address:	

550 Pilgrim Drive, Suite F

Foster City, CA 94404

SIGNATURE PAGE TO PURCHASE AGREEMENT

12

 
 

EXHIBITS    
  

Exhibit A      Form
of Certificate of Determinatione

Exhibit B      Form of Standstill Agreement

Exhibit C      Form of Legal Opinion of Orrick, Herrington & Sutcliffe LLP 

EXHIBIT A

   

FORM OF CERTIFICATE OF DETERMINATION

  

[see
tab 4] 

EXHIBIT B

FORM OF STANDSTILL AGREEMENT

[see
tab 3] 

EXHIBIT C

FORM OF LEGAL OPINION

OF

ORRICK, HERRINGTON & SUTCLIFFE LLP

[see
tab 7] 

QuickLinks

Exhibit 4.2

LANDEC CORPORATION SERIES B PREFERRED STOCK PURCHASE AGREEMENT October 24, 2001

LANDEC CORPORATION SERIES B PREFERRED STOCK PURCHASE AGREEMENT

EXHIBITS

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