Document:

Exhibit
4.1

Landec Corporation

2,580,665 Shares

Common Stock

Registration Rights Agreement

March 26, 2002

TO EACH OF THE PURCHASERS

NAMED ON THE SIGNATURE PAGES HEREOF

Ladies and Gentlemen:

Landec Corporation, a California corporation (the “Company”), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set
forth in the Subscription Agreement (as defined herein) 2,580,665 shares of its
common stock, par value $0.001 per share (the “Securities”).  As an inducement to the Purchasers to enter
into the Subscription Agreement and in satisfaction of a condition to the obligations
of the Purchasers thereunder, the Company agrees with the Purchasers for the
benefit of holders (as defined herein) from time to time of the Registrable
Securities (as defined herein) as follows:

1.             Definitions.

(a)           Capitalized
terms used herein without definition shall have the meanings ascribed thereto
in the Subscription Agreement.  As used
in this Agreement, the following defined terms shall have the following
meanings:

“Affiliate” of any specified person means any other person
which, directly or indirectly, is in control of, is controlled by, or is under
common control with such specified person. 
For purposes of this definition, control of a person means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such person whether by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

“Business Day” means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.

 

 

“Closing Date” has the meaning in the Subscription Agreement.

“Closing Price” as of any date means the closing price of one
share of Common Stock as reported by the Nasdaq National Market on such date.

“Commission” means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

“Common Stock” means the Company’s common stock, par value
$0.001 per share.

“Delay Conditions” means (i) the Company is in possession of
material non-public information the disclosure of which would have a material
adverse effect on the business, operations, prospects, condition (financial or
otherwise) of the Company and its subsidiaries, taken as a whole or (ii) the
Board of Directors of the Company determines in good faith that a delay in the
effectiveness of the Shelf Registration Statement, or the Shelf Registration
Statement ceasing to be effective or a Prospectus thereunder ceasing to be
usable, as the case may be, is appropriate due to occurrence or existence of
any pending corporate development with respect to the Company.  The Delay Conditions shall be deemed to no
longer exist if (x) in the case of clause (i) above, the Board of Directors of
the Company determines in good faith that the disclosure of such material
information would not be prejudicial to or contrary to the interest of the
Company and (y) in the case of clause (ii) above, the Board of Directors of the
Company determines in good faith that such delay or cessation is no longer appropriate.

“Effectiveness Period” has the meaning assigned thereto in
Section 2(b)(i) hereof.

“Effective Time” means the date on which the Commission declares
the Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.

“Effectiveness Deadline Date” means the date which is 90 days
from the Closing Date if the Commission determines not to review the Shelf
Registration Statement, or if the Commission determines to review the Shelf
Registration Statement, then Effectiveness Deadline Date means the date which
is 120 days from the Closing Date; provided that, in either case, the
Effectiveness Deadline Date may be postponed for up to 60 days if and so long
as the Delay Conditions exist.

“Electing Holder” has the meaning assigned thereto in Section
3(a)(ii) hereof.

“Exchange Act” means the United States Securities Exchange Act
of 1934, as amended.

“Filing Deadline Date” means the date which is 30 days from the
Closing Date.

 

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“holder” means, when used with respect to any Security, the
record holder of such Security.

“Managing Underwriters” means the investment banker or
investment bankers and manager or managers that shall administer an
underwritten offering, if any, conducted pursuant to Section 6 hereof.

“Maximum Delay Period” means 60 consecutive days (or 60 days in
the aggregate in any calendar year); provided that the Maximum Delay Period
shall be reduced by the number of days in which the Effectiveness Deadline Date
was postponed pursuant to the proviso in the definitions thereof.

“NASD Rules” means the Rules of the National Association of
Securities Dealers, Inc., as amended from time to time.

“Notice and Questionnaire” means a Notice of Registration Statement
and Selling Securityholder Questionnaire, substantially in the form of Exhibit
A attached hereto, relating to the Securities.

“person” means an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

“Prospectus” means the prospectus (including, without
limitation, any preliminary prospectus, any final prospectus and any prospectus
that discloses information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A under the
Securities Act) included in the Shelf Registration Statement, as amended or
supplemented by any prospectus supplement with respect to the terms of the offering
of any portion of the Registrable Securities covered by the Shelf Registration
Statement and by all other amendments and supplements to such prospectus,
including all material incorporated by reference in such prospectus and all
documents filed after the date of such prospectus by the Company under the
Exchange Act and incorporated by reference therein.

“Purchasers” means the Purchasers named on the signature pages
of the Subscription Agreement.

“Registrable Securities” means all or any portion of the
Securities; provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted Security.

“Restricted Security” means any Security except any such
Security that (i) has been registered pursuant to an effective registration
statement under the Securities Act and sold in a manner contemplated by the
Shelf Registration Statement, (ii) has been transferred in compliance with Rule
144 under the Securities Act (or any successor provision thereto) or is
transferable pursuant to paragraph (k) of such Rule 144 (or any successor
provision thereto) or (iii) has otherwise been transferred and a new Security
not subject to transfer restrictions under the Securities Act has been
delivered by or on behalf of the Company.

 

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“Rules and Regulations” means the published rules and
regulations of the Commission promulgated under the Securities Act or the
Exchange Act, as in effect at any relevant time.

“Securities Act” means the United States Securities Act of 1933,
as amended.

“Shelf Registration” means a registration effected pursuant to
Section 2 hereof.

“Shelf Registration Statement” means a “shelf” registration
statement filed under the Securities Act providing for the registration of, and
the sale on a continuous or delayed basis by the holders of, all of the
Registrable Securities pursuant to Rule 415 under the Securities Act and/or any
similar rule that may be adopted by the Commission, filed by the Company
pursuant to the provisions of Section 2 of this Agreement, including the
Prospectus contained therein, any amendments and supplements to such
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such registration statement.

“Subscription Agreement” means the Subscription Agreements,
dated as of March 26, 2002, between the Company and the Purchasers.

“underwriter” means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.

2.             Shelf
Registration.

(a)           The
Company shall, (1) use its reasonable best efforts to file with the Commission
a Shelf Registration Statement relating to the offer and sale of the
Registrable Securities on or prior to the Filing Deadline Date and (2) use its
reasonable best efforts to cause such Shelf Registration Statement to be declared
effective under the Securities Act on or prior to the Effectiveness Deadline
Date; provided, however, that no holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
Prospectus for resales of Registrable Securities unless such holder is an
Electing Holder.

If (x) such Shelf Registration Statement covering the Registrable
Securities is not filed with the Commission on or prior to the Filing Deadline
Date, (y) such Shelf Registration Statement covering the Registrable Securities
is not declared effective by the Commission on or prior to the Effectiveness
Deadline Date or (z) such Shelf Registration Statement ceases to be effective
or any Prospectus thereunder ceases to be usable with respect to any
Registrable Securities, the Company will make pro rata payments to each
Purchaser, as liquidated damages and not as a penalty, in an amount per 30-day
period (or pro rata portion thereof) equal to 2.0% of the aggregate amount paid
by such Purchaser on the Closing Date to the Company in respect of the then
Registrable Securities (i) in the case of clause (x), for the period from the
Filing Deadline Date to the date on which such Shelf Registration Statement is
filed, (ii) in the case of clause (y), for the period from the Effectiveness
Deadline Date to the date on which such Shelf Registration Statement becomes
effective and (iii) in the case of clause (z), for any period in excess of the
Maximum Delay Period in which such Shelf Registration Statement ceases to be
effective or any Prospectus thereunder ceases to be usable 

 

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with respect to any Registrable Securities.  No such payments shall be payable in respect of any Securities
that are not Registrable Securities. 
Such payments shall be made to each Purchaser in cash not later than
three Business Days following the end of each 30-day period.

(b)           The
Company shall use all reasonable efforts:

(i)            to keep the Shelf Registration
Statement continuously effective in order to permit the Prospectus to be usable
by holders for resales of Registrable Securities until the earlier of (A) the
sale under the Shelf Registration Statement of all the Registrable Securities
registered thereunder and (B) all of the Securities ceasing to be Restricted
Securities (such period being referred to herein as the “Effectiveness Period”);

(ii)           after the Effective Time, promptly
upon the request of any transferee that is a holder of Registrable Securities
that did not have an opportunity to become an Electing Holder prior to the
Effective Time, to take any action reasonably necessary to enable such holder
to use the Prospectus for resales of Registrable Securities, including without
limitation any action necessary to identify such holder as a selling
securityholder in the Shelf Registration Statement; provided, however,
that nothing in this subparagraph shall relieve such holder of the obligation
to return a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(a) hereof; and

(iii)          after the Effective Time, so long as
the Company is obligated to add holders pursuant to clause (ii) immediately
above, upon the request of any other holder of Registrable Securities that is
not then an Electing Holder, to take any action reasonably necessary to enable
such holder to use the Prospectus for resales of Registrable Securities,
including without limitation any action necessary to identify such holder as a selling
securityholder in the Shelf Registration Statement; provided, however,
that nothing in this subparagraph shall relieve such holder of the obligation
to return a completed and signed Notice and Questionnaire to the Company in
accordance with Section 3(a) hereof.

3.             Registration
Procedures.  In connection with the
Shelf Registration Statement, the following provisions shall apply:

(a)           The
Company shall mail the Notice and Questionnaire to the holders of Registrable
Securities.  No holder shall be entitled
to be named as a selling securityholder in the Shelf Registration Statement as
of the Effective Time, and no holder shall be entitled to use the Prospectus
for resales of Registrable Securities at any time unless such holder has returned
a completed and signed Notice and Questionnaire to the Company by the deadline
for response set forth therein; provided, however, holders of
Registrable Securities shall have at least 10 calendar days from the date on
which the Notice and Questionnaire is first mailed to such holders to return a
completed and signed Notice and

 

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Questionnaire to the Company.  The term “Electing Holder” shall mean any
holder of Registrable Securities that has returned a completed and signed
Notice and Questionnaire to the Company in accordance with Section 3(a) hereof.

(b)           The
Company shall furnish to each Electing Holder, counsel to the Electing Holders,
and the Managing Underwriters, if any, no fewer than five Business Days prior
to the initial filing of the Shelf Registration Statement, a copy of such Shelf
Registration Statement, and shall furnish to such holders, counsel to such
holders, and the Managing Underwriters, if any, no fewer than two Business Days
prior to the filing of any amendment or supplement to the Prospectus, a copy of
such amendment or supplement and shall use all reasonable efforts to reflect in
each such document when so filed with the Commission such comments as such
holders and their respective counsel reasonably may propose; provided, however,
that the Company shall make the final decision as to the form and content of
each such document.  If any such Shelf
Registration Statement refers to any Electing Holder by name or otherwise as
the holder of any securities of the Company, then such Electing Holder shall
have the right to require (i) the insertion therein of language, in form and
substance reasonably satisfactory to such Electing Holder, to the effect that
the holding by such Electing Holder of such securities is not to be construed
as a recommendation by such Electing Holder of the investment quality of the
Company’s securities covered thereby and that such holding does not imply that
such Electing Holder will assist in meeting any future financial requirements
of the Company or (ii) in the event that such reference to such Electing Holder
by name or otherwise is not required by the Securities Act or any similar
Federal statute then in force, the deletion of the reference to such Electing
Holder in any amendment or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be required.

(c)           From
the date hereof until the end of the Effectiveness Period, the Company shall
(subject to paragraph (j) below) promptly take such action as may be necessary
so that (i) each of the Shelf Registration Statement and any amendment thereto
and the Prospectus and any amendment or supplement thereto (and each report or
other document incorporated by reference therein in each case) complies in all
material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, (ii) each of the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit 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 (iii) each of the Prospectus and any amendment or supplement to
the Prospectus does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit 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.

(d)           The
Company shall promptly advise each Electing Holder, and shall confirm such
advice in writing if so requested by any such holder (which notice pursuant to
clauses (ii) through (iv) hereof shall be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made):

 

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(i)            when the Shelf Registration
Statement and any amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post-effective amendment thereto has
become effective;

(ii)           of the issuance by the Commission or
any other federal or state governmental authority of any stop order suspending
the effectiveness of the Shelf Registration Statement or the initiation of any
proceedings for such purpose;

(iii)          of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
securities included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose; and

(iv)          if changes in the Shelf Registration
Statement or the Prospectus are required in order that the Shelf Registration
Statement and Prospectus do not contain an untrue statement of a material fact
and do not omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading.

(e)           The
Company shall use its reasonable efforts to prevent the issuance, and if issued
to obtain the withdrawal, of any order suspending the effectiveness of the
Shelf Registration Statement at the earliest possible time.

(f)            The
Company shall furnish to each requesting Electing Holder, without charge, at
least one copy of the Shelf Registration Statement and all post-effective
amendments thereto, including financial statements and schedules, and, if such
holder so requests in writing, all reports, other documents and exhibits that
are filed with or incorporated by reference in the Shelf Registration
Statement.

(g)           The
Company shall, during the Effectiveness Period, deliver to each Electing
Holder, without charge, as many copies of the Prospectus (including each preliminary
Prospectus) and any amendment or supplement thereto as such Electing Holder may
reasonably request; and the Company consents (except during the continuance of
any event described in Section 3(d)(iv) above) to the use of the Prospectus and
any amendment or supplement thereto by each of the Electing Holders in connection
with the offering and sale of the Registrable Securities covered by the
Prospectus and any amendment or supplement thereto during the Effectiveness
Period.

(h)           Prior
to any offering of Registrable Securities pursuant to the Shelf Registration
Statement, the Company shall (i) register or qualify or cooperate with the
Electing Holders and a single counsel for the Electing Holders in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or “blue sky” laws of such jurisdictions within
the United States as any Electing

 

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Holder may reasonably request, (ii) keep such registrations
or qualifications in effect and comply with such laws so as to permit the
continuance of offers and sales in such jurisdictions for so long as may be
necessary to enable any Electing Holder or underwriter, if any, to complete its
distribution of Registrable Securities pursuant to the Shelf Registration
Statement, and (iii) take any and all other actions necessary or advisable to
enable the disposition in such jurisdictions of such Registrable Securities; provided,
however, that in no event shall the Company be obligated to (A) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction where
it would not otherwise be required to so qualify but for this Section 3(h) or
(B) file any general consent to service of process in any jurisdiction where it
is not as of the date hereof so subject.

(i)            The
Company shall cooperate with the Electing Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold pursuant to the Shelf Registration Statement, which certificates shall
not bear any restrictive legends and shall meet the requirements of any
securities exchange on which the Company’s Common Stock is then listed and
which certificates shall be in such permitted denominations and registered in
such names as Electing Holders may request in connection with the sale of
Registrable Securities pursuant to the Shelf Registration Statement.

(j)            Upon
the occurrence of any fact or event contemplated by paragraph 3(d)(iv) above,
the Company shall (subject to the next sentence) promptly prepare a
post-effective amendment or supplement to the Shelf Registration Statement or
the Prospectus, or any document incorporated therein by reference, or file any
other required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. 
If the Company notifies the Electing Holders in accordance with clauses
(ii) through (iv) of paragraph 3(d) above to suspend the use of the Prospectus
until the requisite changes to the Prospectus have been made, then each
Electing Holder shall suspend the use of the Prospectus until (i) such Electing
Holder has received copies of the supplemented or amended Prospectus
contemplated by the preceding sentence or (ii) such Electing Holder is advised
in writing by the Company that the use of the Prospectus may be resumed and has
received copies of any additional or supplemental filings that are incorporated
by reference in the Prospectus. 
Notwithstanding the foregoing, but subject to Section 6 hereof, the Company
may suspend the use of the Prospectus and shall not be required to amend or
supplement the Shelf Registration Statement, any related Prospectus or any document
incorporated by reference, for a period not to exceed the Maximum Delay Period
if and so long as the Delay Conditions exist.

(k)           The
Company shall use all reasonable efforts to comply with all applicable Rules
and Regulations, and to make generally available to its securityholders as soon
as practicable, but in any event not later than eighteen months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Shelf Registration Statement, (ii) the effective date of each post-effective
amendment to the Shelf Registration Statement, and (iii) the date of each
filing by the Company with the Commission of an Annual Report on Form 10-K that
is incorporated by reference in the Shelf Registration Statement, an earnings 

 

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statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act and the Rules and Regulations of the
Commission thereunder (including, at the option of the Company, Rule 158).

(l)            In
the event of an underwritten offering conducted pursuant to Section 6 hereof,
the Company shall (subject to paragraph 3(j) above), if requested, promptly include
or incorporate in a Prospectus supplement or post-effective amendment to the
Shelf Registration Statement such information as the Managing Underwriters
reasonably agree should be included therein and to which the Company does not
reasonably object and shall (subject to paragraph 3(j) above) make all required
filings of such Prospectus supplement or post-effective amendment as soon as
practicable after it is notified of the matters to be included or incorporated
in such Prospectus supplement or post-effective amendment.

(m)          The
Company shall enter into such customary agreements (including an underwriting
agreement in customary form in the event of an underwritten offering conducted
pursuant to Section 6 hereof) and take all other appropriate action in order to
expedite and facilitate the registration and disposition of the Registrable
Securities, and in connection therewith, if an underwriting agreement is
entered into, cause the same to contain indemnification provisions and
procedures substantially identical to those set forth in Section 5 hereof with
respect to all parties to be indemnified pursuant to Section 5 hereof;
provided, however, the Company shall not be required to facilitate an underwritten
offering pursuant to the Shelf Registration Statement by any holders unless the
offering relates to at least 25% of the Securities sold pursuant to the Subscription
Agreement.

(n)           The
Company shall:

(i)            (A) 
make reasonably available for inspection by requesting Electing Holders,
any underwriter participating in any disposition pursuant to the Shelf
Registration Statement, and any attorney selected in accordance with Section
4(b) hereof, one accountant and any other agent retained by such holders or any
such underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries and (B) cause the
Company’s officers, directors and employees to supply all information
reasonably requested by such holders or any such underwriter, attorney,
accountant or agent in connection with the Shelf Registration Statement, in
each case, as is customary for similar due diligence examinations; provided,
however, that all records, information and documents that are designated
in writing by the Company, in good faith, as confidential shall be kept
confidential by such holders and any such underwriter, attorney, accountant or
agent, unless such disclosure is made in connection with a court proceeding or
required by law, or such records, information or documents become available to
the public generally or through a third party without an accompanying
obligation of confidentiality; and provided, further that, if the
foregoing inspection and information gathering would otherwise disrupt the
Company’s conduct of its business, such inspection and information gathering
shall, to the greatest extent possible, be

 

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coordinated on behalf of the requesting Electing Holders
and the other parties entitled thereto by one counsel designated by and on behalf
of Electing Holders and other parties;

(ii)           in connection with any underwritten
offering conducted pursuant to Section 6 hereof, make such representations and
warranties to the Electing Holders participating in such underwritten offering
and to the Managing Underwriters, in form, substance and scope as are
customarily made by the Company to underwriters in comparable underwritten
offerings of equity securities;

(iii)          in connection with any underwritten
offering conducted pursuant to Section 6 hereof, obtain opinions of counsel to
the Company (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the Managing Underwriters) addressed to each
requesting Electing Holder, covering such matters as are customarily covered in
opinions requested in comparable underwritten offerings of equity securities
(it being agreed that the matters to be covered shall include, without
limitation, as of the date of the opinion and as of the Effective Time or the
date of the most recent post-effective amendment thereto, as the case may be,
comment of such counsel as to the absence, to such counsel’s knowledge, from
the Shelf Registration Statement and the Prospectus, including the documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading);

(iv)          in connection with any underwritten
offering conducted pursuant to Section 6 hereof, obtain “cold comfort” letters
and updates thereof from the independent public accountants of the Company
(and, if necessary, from the independent public accountants of any subsidiary
of the Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each requesting Electing Holder (if such
Electing Holder has provided such letter, representations or documentation, if
any, required for such cold comfort letter to be so addressed) and the
underwriters, in customary form and covering matters of the type customarily
covered in “cold comfort” letters in connection with comparable underwritten offerings;

(v)           in connection with any underwritten
offering conducted pursuant to Section 6 hereof, deliver such documents and
certificates as may be reasonably requested by any Electing Holders and the
Managing Underwriters, if any, including without limitation certificates to
evidence compliance with Section 3(j) hereof and with any conditions contained
in the underwriting agreement or other agreements entered into by the Company
in connection therewith.

 

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(o)           The
Company will use all reasonable efforts to cause the Securities to be listed on
the Nasdaq National Market or other stock exchange or trading system, if any,
on which the Common Stock primarily trades on or prior to the Effective Time.

(p)           The
Company shall use all reasonable efforts to take all other steps necessary to
effect the registration, offering and sale of the Registrable Securities
covered by the Shelf Registration Statement contemplated hereby.

4.             Registration
Expenses.

(a)           All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by it whether or not any Shelf Registration
Statement is filed or becomes effective and whether or not any securities are
issued or sold pursuant to any Shelf Registration Statement.  The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including without limitation fees and expenses (A) with respect to
filings required to be made with the National Association of Securities
Dealers, Inc. and (B) in compliance with securities or Blue Sky laws (including
without limitation and in addition to that provided for in (b) below,
reasonable fees and disbursements of counsel for the underwriters or counsel
for the holders of Registrable Securities in connection with Blue Sky
qualifications of the Registrable Securities )), (ii) printing expenses
(including without limitation expenses of printing certificates for Registrable
Securities and of printing Prospectuses if the printing of Prospectuses is in
the opinion of the Managing Underwriters, if any, appropriate to consummate the
offering), (iii) fees and disbursements of counsel for the Company and one
counsel for the holders of Registrable Securities, in accordance with the
provisions of Section 4(b) hereof, (v) fees and disbursements of all
independent certified public accountants referred to in Section 3(n)(iv) hereof
(including without limitation the expenses of any special audit and “cold
comfort” letters required by or incident to such performance), (vi) Securities
Act liability insurance, if the Company desires such insurance, and (vii) fees
and expenses of all other persons retained by the Company.  In addition, the Company shall pay its
internal expenses (including without limitation all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, and the fees and expenses incurred in connection with the
listing of the Securities on the Nasdaq National Market.  Notwithstanding the foregoing or anything in
this Agreement to the contrary, each holder of the Registrable Securities being
registered shall pay all commissions, placement agent fees and underwriting
discounts and commissions with respect to any Registrable Securities sold by it
and the fees and disbursements of any counsel or other advisors or experts
retained by such holders (severally or jointly), other than counsel referred to
in clause (iv) above.

(b)           In
connection with any registration hereunder, the Company shall reimburse the
holders of the Registrable Securities being registered in such registration for
the reasonable fees and disbursements of not more than one counsel chosen by
the holders of a majority of the Registrable Securities for whose benefit the
applicable Shelf Registration Statement is being prepared, in an amount not to
exceed $25,000.

 

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5.             Indemnification
and Contribution.

(a)           Indemnification
by the Company.

(i)            The Company shall indemnify and hold
harmless each Electing Holder and each underwriter, selling agent or other
securities professional, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and each person
who controls such Electing Holder, underwriter, selling agent or other
securities professional within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act (each such person being sometimes referred to
as an “Indemnified Person”) against any losses, claims, damages or liabilities,
joint or several, to which such Indemnified Person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in
any Shelf Registration Statement or any Prospectus contained therein or
furnished by the Company to any Indemnified Person, or any amendment or
supplement thereto, or arise 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 in
which they were made, not misleading, and

(ii)           the Company hereby agrees to
reimburse such Indemnified Person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such action
or claim as such expenses are incurred; provided, however, that the Company
shall not be liable to any such Indemnified Person in any such case under
Section 5(a)(i) above or this Section 5(a)(ii) to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such Shelf
Registration Statement or Prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information relating to such
Indemnified Person furnished to the Company by or on behalf of such Indemnified
Person expressly for use therein; provided, further, however, that the
foregoing indemnity agreement with respect to any Prospectus shall not inure to
the benefit of any Indemnified Person who failed to deliver a final Prospectus
or an amendment or supplement thereto (provided by the Company to the several
Indemnified Persons in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the relevant transaction date) to the person
asserting any losses, claims, damages and liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained
in any Prospectus, or caused by any 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,
not misleading, if such material misstatement or omission or alleged material 

 

12

 

misstatement or omission was cured in the final
Prospectus or an amendment or supplement thereto.

(b)           Indemnification
by the Holders and any Agents and Underwriters.  Each Electing Holder agrees, as a consequence of the inclusion of
any of such holder’s Registrable Securities in any Shelf Registration
Statement, and each underwriter, selling agent or other securities
professional, if any, which facilitates the disposition of Registrable Securities
shall agree, as a consequence of facilitating such disposition of Registrable
Securities, severally and not jointly, to (i) indemnify and hold harmless the Company,
its directors, officers who sign such Shelf Registration Statement and each
person, if any, who controls the Company within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act, against any losses,
claims, damages or liabilities to which the Company or such other persons may
become subject, under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in such Shelf Registration Statement or Prospectus, or any
amendment or supplement thereto, or arise 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 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 relating to such holder,
underwriter, selling agent or other securities professional furnished to the
Company by or on behalf of such holder, underwriter, selling agent or other
securities professional expressly for use therein and (ii) reimburse the
Company and its directors and officers who sign such Shelf Registration
Statement for any legal or other expenses reasonably incurred by the Company
and such directors and officers in connection with investigating or defending
any such action or claim as such expenses are incurred.

(c)           Notices
of Claims, Etc.  Promptly after
receipt by an indemnified party under subsection (a) or (b) of this Section 5
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 5, notify such indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under this Section 5.  In case any such
action shall be brought against any indemnified party and it shall notify an indemnifying
party of the commencement thereof, such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party),
and, after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, such indemnifying party shall not be
liable to such indemnified party under this Section 5 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation.  No indemnifying
party shall, without the written consent of the indemnified party, which
consent will not be unreasonably withheld, effect the settlement or compromise
of, or consent to the 

 

13

 

entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.

(d)           Contribution.  If the indemnification provided for in this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) of this Section 5 in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a 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 indemnifying party and the
indemnified party 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 of such indemnifying
party and indemnified party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
about such indemnifying party or indemnified party supplied by such
indemnifying party or by such indemnified party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.  The parties
hereto agree that it would not be just and equitable if contribution pursuant
to this Section 5(d) were determined by pro  rata allocation (even
if the Electing Holders or any underwriters, selling agents or other securities
professionals or all of them were treated as one entity for such purpose) or by
any other method of allocation which does not take account of the equitable
considerations referred to in this Section 5(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 shall be deemed to include any legal or other fees or
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.   The obligations of
the Electing Holders and any underwriters, selling agents or other securities
professionals in this Section 5(d) to contribute shall be several in proportion
to the percentage of Registrable Securities registered or underwritten, as the
case may be, by them and not joint.

(e)           Notwithstanding
any other provision of this Section 5, in no event will any (i) Electing Holder
be required to undertake liability under this Section 5 for any amounts in
excess of the dollar amount of the proceeds to be received by such holder from
the sale of such holder’s Registrable Securities (after deducting any fees,
discounts and commissions applicable thereto) pursuant to any Shelf
Registration Statement and (ii) underwriter, selling agent or other securities
professional be required to undertake liability to any person for any amounts
in excess of the discount, commission or other compensation

 

14

 

payable to such underwriter, selling agent or other
securities professional with respect to the Registrable Securities underwritten
by it and distributed to the public.

(f)            The
obligations of the Company under this Section 5 shall be in addition to any
liability that the Company may otherwise have to any Indemnified Person and the
obligations of any Indemnified Person under this Section 5 shall be in addition
to any liability that such Indemnified Person may otherwise have to the
Company.  The remedies provided in this
Section 5 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to an indemnified party at law or in equity.

6.             Underwritten
Offering.  Any holder of Registrable
Securities who desires to do so may sell Registrable Securities (in whole or in
part) in an underwritten offering; provided, however, the Company shall not be
required to facilitate an underwritten offering pursuant to the Shelf
Registration Statement by any holders unless the offering relates to at least 25%
of the Securities sold pursuant to the Subscription Agreement.  In any such underwritten offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the holders of a majority of the Registrable Securities to be included in such
offering; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company.  No holder may participate in any
underwritten offering contemplated hereby unless (a) such holder agrees to sell
such holder’s Registrable Securities to be included in the underwritten
offering in accordance with any approved underwriting arrangements, (b) such
holder completes and executes all reasonable questionnaires, powers of
attorney, indemnities, underwriting agreements, lock-up letters and other
documents required under the terms of such approved underwriting arrangements
and (c) if such holder is not then an Electing Holder, such holder returns a
completed and signed Notice and Questionnaire to the Company in accordance with
Section 3(a) hereof within a reasonable amount of time before such underwritten
offering.  The holders participating in
any underwritten offering shall be responsible for any underwriting discounts
and commissions and fees and, subject to Section 4 hereof, expenses of their
own counsel.  The Company shall pay all
expenses customarily borne by issuers, including but not limited to filing
fees, the fees and disbursements of its counsel and independent public
accountants and any printing expenses incurred in connection with such
underwritten offering.  Notwithstanding
the foregoing or the provisions of Section 3(l) hereof, upon receipt of a
request from the Managing Underwriter or a representative of holders of a
majority of the Registrable Securities to be included in an underwritten
offering to prepare and file an amendment or supplement to the Shelf
Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to the Maximum Delay Period if and so long as the Delay Conditions
exist.

7.             Rule
144.

The Company agrees, for so long as any Registrable Securities remain outstanding
and during any period in which the Company is subject to Section 13 of 15 (d)
of

 

15

 

the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Registrable Securities pursuant to
Rule 144 of the Securities Act.

8.             Miscellaneous.

(a)           Remedies.  The Company acknowledges and agrees that any
failure by the Company to comply with its obligations under this Agreement may
result in material irreparable injury to the Purchasers or the holders of
Registrable Securities for which there is no adequate remedy at law, that it
will not be possible to measure damages for such injuries precisely and that,
in the event of any such failure, the Purchasers or any holder of Registrable
Securities may obtain such relief as may be required to specifically enforce
the Company’s obligations hereunder. 
The Company further agrees to waive the defense in any action for
specific performance that a remedy at law would be adequate.

(b)           Other
Registration Rights.  The Company
will not, on or after the date of this Agreement, enter into any agreement with
respect to its securities that is inconsistent with the rights granted to the
holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof.  The Company
shall not permit any securities other than the Registrable Securities to be
included in any Shelf Registration Statement.

(c)           Amendments
and Waivers.  The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to or departures from the provisions hereof may not be given unless (i) in the
case of Section 2 hereof and this Section 8(c)(i), the Company has obtained the
written consent of holders of all outstanding Registrable Securities and (ii)
in the case of all other provisions hereof, the Company has obtained the
written consent of holders of a majority of the Registrable Securities
(excluding Registrable Securities held by the Company or its Affiliates).  Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of holders whose Registrable Securities are being sold pursuant to a
Shelf Registration Statement and that does not affect directly or indirectly
the rights of other holders of Registrable Securities may be given by the
holders of a majority of Registrable Securities being sold by such holders
pursuant to such Shelf Registration Statement.

(d)           Notices.  All notices and other communications
provided for or permitted hereunder shall be given as provided in the
Subscription Agreement.

(e)           Parties
in Interest.  The parties to this
Agreement intend that all holders of Registrable Securities shall be entitled
to receive the benefits of this Agreement and that any Electing Holder shall be
bound by the terms and provisions of this Agreement by reason of such election
with respect to the Registrable Securities that are included in a Shelf Registration
Statement.  All the terms and provisions
of this Agreement shall be binding upon, shall inure to the benefit of and
shall be enforceable by the respective successors and assigns of the parties
hereto and any holder from time to time of the Registrable Securities to the
aforesaid extent.  In the event that any
transferee of any holder of Registrable Securities shall acquire Registrable
Securities, in any manner, whether by gift, bequest, purchase,

 

16

 

operation of law or otherwise, such transferee shall,
without any further writing or action of any kind, be entitled to receive the
benefits of and, if an Electing Holder, be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement to
the aforesaid extent.

(f)            Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

(g)           Headings.  The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning, construction or interpretation hereof.

(h)           Governing
Law.  This Agreement shall be
governed by and construed in accordance with the laws of the State of
California without giving effect to provisions relating to conflicts of law to
the extent the application of the laws of another jurisdiction would be
required thereby.

(i)            Severability.  In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties hereto shall be enforceable to the fullest extent permitted by law.

(j)            Survival.  The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Electing Holder, any director, officer or partner of such holder, any
agent or underwriter, any director, officer or partner of such agent or underwriter,
or any controlling person of any of the foregoing, and shall survive the
transfer and registration of the Registrable Securities of such holder.

(k)           Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter hereof.  There are no restrictions, promises, warranties
or undertakings, other than those set forth or referred to herein, with respect
to the registration rights granted with respect to the Registrable
Securities.  This Agreement supersedes
all prior agreements and understandings between the parties with respect to
such subject matter.

 

17

 

Please confirm by signing in the space provided below that the
foregoing correctly sets forth the agreement between the Company and you.

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  LANDEC CORPORATION

  

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

18

 

REGISTRATION RIGHTS AGREEMENT SIGNATURE PAGE

 

Accepted and Agreed

	
   

  	
   

  
	
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  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
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  Facsimile:

  	
   

  	
   

  
							

 

 

19

 

EXHIBIT A

Landec Corporation

Notice of Registration Statement

and

Selling Securityholder Questionnaire

(Date)

Reference is hereby made to the Registration Rights Agreement (the
“Registration Rights Agreement”) between Landec Corporation (the “Company”) and
the Purchasers named therein.  Pursuant
to the Registration Rights Agreement, the Company has filed with the United
States Securities and Exchange Commission (the “Commission”) a registration
statement on Form S-_ (the “Shelf Registration Statement”) for the registration
and resale under Rule 415 of the Securities Act of 1933, as amended (the
“Securities Act”), [  ] shares of the Company’s common stock, par
value $0.001 per share (the “Securities”). 
A copy of the Registration Rights Agreement is attached hereto.  All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined below) is
entitled to have the Registrable Securities beneficially owned by it included
in the Shelf Registration Statement.  In
order to have Registrable Securities included in the Shelf Registration Statement,
this Notice of Registration Statement and Selling Securityholder Questionnaire
(“Notice and Questionnaire”) must be completed, executed and delivered to the
Company’s counsel at the address set forth herein for receipt ON OR BEFORE ___________.  Beneficial owners of Registrable Securities
who do not complete, execute and return this Notice and Questionnaire by such
date (i) will not be named as selling securityholders in the Shelf Registration
Statement and (ii) may not use the Prospectus forming a part thereof for
resales of Registrable Securities.

Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.  Accordingly, holders and beneficial owners
of Registrable Securities are advised to consult their own securities law
counsel regarding the consequences of being named or not being named as a
selling securityholder in the Shelf Registration Statement and related
Prospectus.

The term “Registrable Securities” is defined in the Registration
Rights Agreement to mean all or any portion of the Securities; provided,
however, that a security ceases to be a Registrable Security when it is
no longer a Restricted Security.

The term “Restricted Security” is defined in the Registration
Rights Agreement to mean any Security except any such Security that (i) has
been registered pursuant to an 

 

A-1

 

effective registration statement under the Securities Act and sold in a
manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto), or (iii) has otherwise been
transferred and a new Security not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company.

ELECTION

The undersigned holder (the “Selling Securityholder”) of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and the Registrable Securities
listed below in Item (3). The undersigned, by signing and returning this Notice
and Questionnaire, agrees to be bound with respect to such Registrable
Securities by the terms and conditions of this Notice and Questionnaire and the
Registration Rights Agreement, including without limitation Section 5 of the
Registration Rights Agreement as if the undersigned Selling Securityholder were
an original party thereto.

The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:

QUESTIONNAIRE

Certain capitalized terms used in this Questionnaire are defined in
Appendix l attached hereto.  Capitalized
terms used in this Questionnaire but not defined in Appendix 1 have the
meanings given to them in the accompanying letter.

(1)           (a)           Full legal name of Selling
Securityholder:

_______________________________________________________________

(i)                                     Is such Selling Securityholder a:

[ ]
Corporation      [ ] General Partnership

[ ]
Individual                         [ ]
Limited Partnership

[ ]
Other (please specify:____________________)

(ii)           In what state is such Selling
Securityholder organized or domiciled?

_____________________________

(b)                                 Full legal name of Registered Holder (if
not the same as in (a) above) of Registrable Securities listed in Item (4)
below:

_________________________________________________________

 

A-2

 

(2)           Address for Notices
to Selling Securityholder:

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  
	
  Contact Person:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

(3)           Beneficial Ownership
of Securities by Another Entity or Individual:

(a)                                  Is another entity or individual the
Beneficial Owner of any Securities?

[ ] No (skip questions (b)-(e) below)

[ ] Yes (answer questions (b)-(e) below)

(b)                                 What is the full legal name of such
Beneficial Owner?

_____________________________________________________

(c)                                  Is such Beneficial Owner a:

[ ] Corporation      [ ] General
Partnership

[ ] Individual                         [
] Limited Partnership

[ ] Other (please specify:____________________)

(d)                                 In what state is such Beneficial Owner
organized or domiciled?

___________________________________________________

(e)                                  Please provide the name, address and telephone
number of a contact person for such Beneficial Owner.

___________________________________________________

___________________________________________________

___________________________________________________

___________________________________________________

(4)           Beneficial Ownership of Securities:

Except
as set forth below in this Item (4), the undersigned is not a Beneficial Owner
of any Securities.

 

A-3

 

(a)                                  Number of Registrable Securities (as
defined in the Registration Rights Agreement) Beneficially Owned:
___________________________________________ CUSIP No(s). of such Registrable
Securities: _______________________________

(b)                                 Number of Securities other than
Registrable Securities Beneficially Owned:

_______________________________________________________________

CUSIP No(s). of
such other Securities:

____________________________________

(c)                                  Number of Registrable Securities that the
undersigned wishes to be included in the Shelf Registration Statement:

__________________________________ CUSIP No(s). of such Registrable Securities
to be included in the Shelf Registration Statement:
___________________________________________________________

(5)           Beneficial Ownership
of Other Securities of the Company:

Except as set forth below in this Item (5), the undersigned
Selling Securityholder is not a Beneficial Owner of any shares of Common Stock
or any other securities of the Company, other than the Securities listed above
in Item (4).

State any exceptions here:

(6)           Relationships with
the Company:

Except as set forth below, neither the Selling
Securityholder nor any of its Affiliates, officers, directors or principal
equity holders (5% or more) has held any position or office or has had any
other Material Relationship with the Company (or its predecessors or
Affiliates) during the past three years.

State any exceptions here:

(7)           Plan of
Distribution:

Except as set forth below, the undersigned Selling
Securityholder intends to distribute the Registrable Securities listed above in
Item (4) only as follows (if at all): Such Registrable Securities may be sold
from time to time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or agents who may receive discounts,
concessions or commissions from the Selling

 

A-4

 

Stockholder or the purchaser.  Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at prices relating to the prevailing market prices at the time of sale, at
varying prices determined at the time of sale, or at negotiated prices.  Such sales may be effected in transactions
(which may involve crosses or block transactions) (i) on any national
securities exchange or quotation service on which the Registered Securities may
be listed or quoted at the time of sale, (ii) in the over-the-counter market,
(iii) in transactions otherwise than on such exchanges or services or in the
over-the-counter market, (iv) through the writing of options, whether such
options are listed on an option exchange or otherwise, or (iv) through the
settlement of short sales.  In
connection with sales of the Registrable Securities or otherwise, the Selling
Securityholder may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the
Registrable Securities in the course of hedging the positions they assume.  The Selling Securityholder may also sell
Registrable Securities short and deliver Registrable Securities to close out
such short positions, or loan or pledge Registrable Securities to broker-dealers
that in turn may sell such securities.

State any exceptions here:

(8)                                  Are you a Member, an affiliate of a
Member, or a person associated with a Member, of the National Association of
Securities Dealers, Inc. (the “NASD”)?

Yes _____ No _____

If the answer to Question
8 is “yes”, state (a) the name of any such NASD Member, (b) the nature of your
affiliation or association with such NASD Member, (c) information as to such
NASD Member’s participation in any capacity in the offering or the original
placement of the Securities, (d) the number of shares of equity securities or
face value of debt securities of the Company owned by you, (e) the date such
securities were acquired and (f) the price paid for such securities.

_____________________________________________________________________

_____________________________________________________________________

____________________________________________.

(9)                                  If you answered “yes”to Question 8 above,
please fill out the following table with respect to any purchases from the
Company or any of its Affiliates in a private place

 

A-5

 

ment within twelve months prior to the date hereof (excluding your
purchase of the Securities).

 

	
  Date of
  Purchase

  	
   

  	
  Seller

  	
   

  	
  Amount and
  Name of Securities

  	
   

  	
  Price or
  Other Consideration

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Note:  In no event may such
method(s) of distribution take the form of an underwritten offering of the
Registrable Securities without the prior agreement of the Company.

By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.  The Selling
Securityholder also acknowledges that it understands that the answers to this
Questionnaire are furnished for use in connection with the Registration
Statement and any amendments or supplements thereto filed with the SEC pursuant
to the Securities Act of 1933, as amended.

In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after the date
on which such information is provided to the Company, the Selling
Securityholder agrees to notify the transferee(s) at the time of the transfer
of its rights and obligations under this Notice and Questionnaire and the
Registration Rights Agreement.

By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through (9)
above and the inclusion of such information in the Shelf Registration Statement
and related Prospectus.  The Selling
Securityholder understands that such information will be relied upon by the
Company in connection with the preparation of the Shelf Registration Statement
and related Prospectus.

The Selling Securityholder acknowledges that material misstatements and
omissions of material facts in the Registration Statement and any amendments or
supplement thereto may give rise to civil and criminal liabilities to the
Company and to each officer and director of the Company signing the
Registration Statement and to other persons signing such document.  As a result, in accordance with the Selling
Securityholder’s obligation under Section 3(a) of the Registration Rights
Agreement to provide such information as may be required by law for inclusion
in the Shelf Registration Statement, the Selling Securityholder agrees to
promptly notify the Company of any inaccuracies or changes in the information
provided herein which may occur subsequent to the date hereof at any time while
the Shelf Registration Statement remains in effect.  All notices hereunder and pursuant to the Registration Rights
Agreement shall be made in writing, by hand-delivery, first-class mail, or air
courier guaranteeing overnight delivery as follows:

 

A-6

 

(i)                                 to the Company:

Landec Corporation

3603 Haven Avenue

Menlo Park, CA 94025

Attention:  Greg Skinner

(ii)                              with a copy to:

Orrick, Herrington &
Sutcliffe, LLP

1020 Marsh Road

Menlo Park, CA 94025

Attention:  Geoffrey P. Leonard

Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company’s counsel, the terms of this Notice
and Questionnaire, and the representations and warranties contained herein, shall
be binding on, shall inure to the benefit of and shall be enforceable by the
respective successors, heirs, personal representatives, and assigns of the
Company and the Selling Securityholder (with respect to the Registrable Securities
Beneficially Owned by such Selling Securityholder and the Registrable
Securities listed in Item (3) above). 
This Agreement shall be governed in all respects by the laws of the
State of New York without giving effect to provisions relating to conflicts of
law to the extent the application of the laws of another jurisdiction would be
required thereby.

I confirm that, to the best of my knowledge and belief, the foregoing
statements (including without limitation the answers to this Questionnaire) are
correct.

IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.

	
  Dated: 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Selling Securityholder

  
	
   

  	
  (Print/type full legal name of beneficial owner of
  Registrable Securities)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-7

 

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR
RECEIPT ON OR BEFORE ______________ TO THE COMPANY’S COUNSEL AT:

Orrick, Herrington &
Sutcliffe, LLP

1020 Marsh Road

Menlo Park, CA 94025

Attention:  Geoffrey P. Leonard

 

A-8

 

APPENDIX
1

DEFINITIONS

For the purpose of this Questionnaire, the following definitions apply:

1.             Affiliate. 
As used in Questions 1 - 7 and Question 9, a person is an “Affiliate” of
a person if such person controls, is controlled by, or is under common control
with, another person.  Please assume
that an “Affiliate” of the Company includes without limitation, any 5%
stockholder of the Company (including any person who owns, controls, or holds
or holds an option to acquire, and has the power to vote, 5% or more of the
Company’s outstanding voting securities). 
“Control” is the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or otherwise.

As used in Question 8 of this Questionnaire, an “affiliate” of an NASD
member has the following meaning:

(1)           a company which controls, is controlled
by or is under common control with a member;

(2)           the term affiliate is presumed to
include, but is not limited to, the following:

(a)           a company will be presumed to control a
member if the company beneficially owns 10% or more of the outstanding voting
securities of a member which is a corporation, or beneficially owns a
partnership interest in 10% or more of the distributable profits or losses of a
member which is a partnership;

(b)           a member will be presumed to control a
company if the member and persons associated with the member beneficially own
(i) 10% or more of the outstanding subordinated debt of a company, (ii) 10% or
more of the outstanding voting securities of a company which is a corporation
or (iii) a partnership interest in 10% or more of the distributable profits or
losses of a company which is a partnership;

(c)           a company will be presumed to be under
common control with a member if:

(i)            the same natural person or company
controls both the member and company by beneficially owning 10% or more of the
outstanding voting securities of a member or company which is a corporation, or
by beneficially owning a partnership interest in 10% or more of the
distributable profits or losses of a member or company which is a partnership;
or 

I-1

 

(ii)                              a person having the power to direct or
cause the direction of the management or policies of the member or the company
also has the power to direct or cause the direction of the management or
policies of the other entity in question. 

2.             Beneficial Owner.  A “Beneficial Owner” of a security includes
any person who, directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise, has or shares voting power and/or
investment power with respect to such security.  Voting power includes “the power to vote, or to direct the
voting, of such security” and investment power includes “the power to dispose,
or to direct the disposition, of such security.” 

A person is also a Beneficial Owner of a security if he has the right
to acquire beneficial ownership of such security, at any time within sixty
days, including but not limited to, any right to acquire through: (a) the
exercise of an option, warrant or right, (b) the conversion of a convertible
security, (c) the power to revoke a trust, discretionary account or similar
arrangement, or (d) the automatic termination of a trust, discretionary account
or similar arrangement; provided, however, that if the acquisition of an
option, warrant, right, convertible security or power described in (a), (b) or
(c) is for the purpose of maintaining or obtaining control over the issuer of
the security, the holder of the option, warrant, right, convertible security or
power shall, immediately upon such acquisition and regardless of when it is
exercisable, be deemed a beneficial owner of the underlying securities. 

The possession of the legal power to vote and/or direct the disposition
of securities, absent unusual circumstances, will be sufficient to confer
beneficial ownership.  Such power may be
held directly, or indirectly, through one or more controlled entities. 

3.            Material Relationship.  The term “material relationship” has not
been defined by the Securities and Exchange Commission (the “SEC”).  The SEC, however, is likely to construe as
material any relationship which tends to impact arm’s length bargaining in
dealings with a company, whether arising from a close business connection,
family relationship, a relationship of control or otherwise.  For example, you should conclude that you
have such a relationship with any organization of which you own, directly or
indirectly, 10% more of the outstanding voting stock, or in which you have some
other substantial interest, and with any person or organization with whom you
have, or with whom any relative (or any other person or organization as to
which you have any of the foregoing other relationships) has, a contractual
relationship.

4.             Member.  Rule 0120 of the NASD’s Rules of Fair
Practice defines the term “member” to mean any individual, partnership,
corporation or other legal entity admitted to membership in the NASD, and
Article l of the NASD’s By-Laws defines the term “person associated with a
member” to mean every sole proprietor, partner, officer, director, or branch
manager of any member, or any natural person occupying a similar status or
performing similar functions, or any natural person engaged in the investment
banking or securities business who is directly or indirectly controlling or
controlled by such member (for example,  

I-2

 

any employee), whether or not such person is registered or exempt from
registration with the NASD.

 

I-3Exhibit
10.1

 

Landec Corporation

1,935,504 Shares of
Common Stock

SUBSCRIPTION
AGREEMENT

March 26, 2002

TO EACH OF THE
PURCHASERS NAMED ON THE SIGNATURE PAGES HEREOF

Ladies and Gentlemen:

Landec Corporation, a California corporation (the “Company”),
hereby confirms its agreement with you (the “Purchasers”), as set forth
below.

1.             The Shares. 
Subject to the terms and conditions herein contained, the Company
proposes to issue and sell to each Purchaser the number of shares of its Common
Stock, par value $0.001 per share (the “Common Stock”), set forth on the signature
page of such Purchaser hereto (collectively, the “Shares”).

The Shares will be offered and sold to the Purchasers without such
offers and sales being registered under the Securities Act of 1933, as amended
(together with the rules and regulations of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder, the “Securities
Act”), in reliance on exemptions therefrom.

In connection with the sale of the Shares, the Company has made
available its periodic reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 since January 1,
2001.  These reports and filings are
collectively referred to as the “Disclosure Documents”.  All references in this Agreement to
financial statements and schedules and other information which is “contained,”
“included” or “stated” in the Disclosure Documents (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is incorporated by reference in the Disclosure
Documents.

The Purchasers and their direct and indirect transferees of the Shares
will be entitled to the benefits of the Registration Rights Agreement to be
dated as of March 26, 2002 among the parties hereto (the “Registration
Rights Agreement”) pursuant to which the Company has agreed, among other
things, to file a shelf registration statement (the “Shelf Registration
Statement”) pursuant to Rule 415 under the Securities Act of 1933
relating to the resale of the Shares (as defined herein) by holders thereof.

The Registration Rights Agreement, the Engagement Letter dated March 4,
2002 with Roth Capital Partners, LLC, and this Agreement are herein
collectively referred to as the “Basic Documents”.

 

 

2.             Representations and Warranties of the Company.  The Company represents and warrants to and
agrees with each Purchaser that:

(a)           The
Disclosure Documents as of their respective dates did not, and any amendment or
supplement thereto as of its date did not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The Disclosure Documents,
at the time they were filed with the Commission, complied in all material respects
with the requirements of the Securities Act of 1933 and/or the Securities Acts
of 1934, as the case may be (together with the rules and regulations of the
Commission promulgated thereunder, the “Securities Acts”), as applicable.

(b)           Each
of the Company and its subsidiaries (the “Subsidiaries”) has been duly
incorporated and each of the Company and the Subsidiaries is validly existing
in good standing as a corporation under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own its properties
and conduct its business as now conducted as described in the Disclosure
Documents and is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the aggregate,
have a material adverse effect on the business, condition (financial or other),
properties, prospects or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a “Material Adverse Effect”);
as of the Closing Date, the Company will have the authorized, issued and
outstanding capitalization set forth in the Disclosure Documents (subject to
the issuance of shares pursuant to this Agreement or pursuant to options
outstanding under the Company’s stock option plans or outstanding warrants or
other rights to acquire shares described in the Disclosure Documents); all of
the outstanding shares of capital stock of the Company and the Subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights and are
owned free and clear of all liens, encumbrances, equities, and restrictions on
transferability (other than those imposed by the Securities Act and the state
securities or “Blue Sky” laws) or voting; except as set forth in the Disclosure
Documents, all of the outstanding shares of capital stock of the Subsidiaries
are owned, directly or indirectly, by the Company; the shares of capital stock
of the Company and the Subsidiaries that are reserved for issuance pursuant to
stock option plans or other equity incentive plans is as set forth in the
Disclosure Documents; and except as may be outstanding under stock option plans
or other equity incentive plans that are described in the Disclosure Documents,
there are no outstanding options, warrants or other rights to purchase shares
of capital stock of the Company or the Subsidiaries.

(c)           The
Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under the Basic Documents.  Each of the Basic Documents has been duly and validly authorized
by the Company and, when executed and delivered by the Company, will constitute
a valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (i) the enforcement thereof may
be limited by (A) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to or

 

2

 

affecting creditors’ rights generally or
(B) general principles of equity and the discretion of the court before
which any proceeding therefore may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity) (collectively,
the “Enforceability Exceptions”), and (ii) any rights to indemnity, or
contribution under the Registration Rights Agreement may be limited by federal
and state securities laws and public policy considerations.

(d)           The
Shares have been duly authorized and, when issued upon payment thereof in
accordance with this Agreement, will have been validly issued, fully paid and
nonassessable.  The capital stock of the
Company, including the Common Stock, conforms to the description thereof
contained in the Disclosure Documents. 
The stockholders of the Company have no preemptive or similar rights
with respect to the Common Stock.

(e)           No
consent, approval, authorization, license, qualification, exemption or order of
any court or governmental agency or body or third party is required for the
performance of the Basic Documents by the Company or for the consummation by
the Company of any of the transactions contemplated thereby, or the application
of the proceeds of the issuance of the Shares as described in the Disclosure
Documents, except for such consents, approvals, authorizations, licenses,
qualifications, exemptions or orders (i) as have been obtained on or prior
to the Closing Date, (ii) as are not required to be obtained on or prior
to the Closing Date that will be obtained when required, or (iii) the
failure to obtain which would not, individually or in the aggregate, have a
Material Adverse Effect; all such consents, approvals, authorizations,
licenses, qualifications, exemptions and orders set forth in the Disclosure
Documents which are required to be obtained by the Closing Date will be in full
force and effect as of the Closing Date and not the subject of any pending or,
to the best knowledge of the Company, threatened attack by appeal or direct
proceeding or otherwise.

(f)            None
of the Company or the Subsidiaries is (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation
applicable to it or any of its properties or assets, which breach or violation
would, individually or in the aggregate, have a Material Adverse Effect, or
(iii) in default (nor has any event occurred which with notice or passage of
time, or both, would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to which it
is a party or to which it is subject, which default would, individually or in
the aggregate, have a Material Adverse Effect.

(g)           The
execution, delivery and performance by the Company of the Basic Documents and the
consummation by the Company of the transactions contemplated thereby and the
fulfillment of the terms thereof will not (a) violate, conflict with or
constitute or result in a breach of or a default under (or an event that, with
notice or lapse of time, or both, would constitute a breach of or a default
under) any of (i) the terms or provisions of any contract, indenture,
mortgage, deed of trust, loan agreement, note, lease, license, franchise
agreement, permit, certificate or agreement or instrument to which any of the
Company or the Subsidiaries is a party or to which any of their respective
properties or 

 

3

 

assets are subject, (ii) the certificate of
incorporation or bylaws of any of the Company or the Subsidiaries (or similar
organizational document) or (iii) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or other body applicable
to the Company or the Subsidiaries or any of their respective properties or assets
or (b) result in the imposition of any lien upon or with respect to any of
the properties or assets now owned or hereafter acquired by the Company or any
of the Subsidiaries, which violation, conflict, breach, default or lien would,
individually or in the aggregate, have a Material Adverse Effect.

(h)           The
audited consolidated financial statements included in the Disclosure Documents
present fairly the consolidated financial position, results of operations, cash
flows and changes in stockholders’ equity of the entities, at the dates and for
the periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis; the
interim unaudited consolidated financial statements included in the Disclosure
Documents present fairly the consolidated financial position, results of
operations and cash flows of the entities, at the dates and for the periods to
which they relate, subject to year-end audit adjustments, and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis with the audited consolidated financial statements included
therein; the selected financial and statistical data included in the Disclosure
Documents present fairly the information shown therein and have been prepared
and compiled on a basis consistent with the audited financial statements
included therein, except as otherwise stated therein; and Ernst & Young
LLP, which has examined certain of such financial statements as set forth in
its report included in the Disclosure Documents, is an independent public
accounting firm as required by the Securities Act for an offering registered
thereunder.

(i)            Except
as described in the Disclosure Documents, there is not pending or, to the best
knowledge of the Company, threatened any action, suit, proceeding, inquiry or
investigation, governmental or otherwise, to which any of the Company or the
Subsidiaries is a party, or to which their respective properties or assets are
subject, before or brought by any court, arbitrator or governmental agency or
body, that, if determined adversely to the Company or any such Subsidiary,
would, individually or in the aggregate, have a Material Adverse Effect or that
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Shares to be sold hereunder or the application of
the proceeds therefrom or the other transactions described in the Disclosure
Documents.

(j)            None
of the Company or the Subsidiaries has, or, after giving effect to the issuance
and sale of the Shares, will have, any liability for any prohibited transaction
(as defined in Section 406 of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the “Code”)), accumulated funding deficiency (as
defined in Section 302 of ERISA) or any complete or partial withdrawal from a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA), with respect to
any plan (as defined in Section 3(3) of ERISA) as to which the Company or any
of the Subsidiaries has or could have any direct or indirect, actual or
contingent liability.  With respect to
such plans, the Company and the Subsidiaries

 

4

 

are, and, after giving effect to the issuance and sale
of the Shares, will be, in compliance in all material respects with all
provisions of the Code and ERISA.

(k)           The
Company and the Subsidiaries own or possess adequate licenses or other rights
to use all patents, trademarks, service marks, trade names, copyrights and
know-how that are necessary to conduct their businesses as described in the
Disclosure Documents.  None of the
Company or the Subsidiaries has received any notice of infringement of or
conflict with (or knows of any such infringement of or conflict with) asserted
rights of others with respect to any patents, trademarks, service marks, trade
names, copyrights or know-how that, if such assertion of infringement or
conflict were sustained, would, individually or in the aggregate, have a
Material Adverse Effect.

(l)            Each
of the Company and the Subsidiaries possesses all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and
has made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals presently required or necessary to own or lease, as the case
may be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Disclosure
Documents (“Permits”), except where the failure to obtain such Permits
would not, individually or in the aggregate, have a Material Adverse Effect;
each of the Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other impairment of the rights of the holder of any
such Permit, except where such revocation, termination or impairment would not,
individually or in the aggregate, have a Material Adverse Effect; and none of
the Company or the Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in the
Disclosure Documents and except where such revocation or modification would
not, individually or in the aggregate, have a Material Adverse Effect.

(m)          Subsequent
to the respective dates as of which information is given in the Disclosure
Documents and except as described therein, (i) the Company and the Subsidiaries
have not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions not in the ordinary
course of business, (ii) the Company and the Subsidiaries have not
purchased any of their respective outstanding capital stock, or declared, paid
or otherwise made any dividend or distribution of any kind on any of their respective
capital stock or otherwise (other than, (A) with respect to the Company, the
payment of dividends on its Series B Preferred Stock and (B) with respect to
any of such Subsidiaries, the purchase of, or a dividend or distribution on,
capital stock owned by the Company), (iii) there has not been any material
change in the capital stock or any increase in the long-term indebtedness of
the Company or any of the Subsidiaries, (iv) there has not occurred any
event or condition, individually or in the aggregate, that has a Material
Adverse Effect and (v) the Company and the Subsidiaries have not sustained
any material loss or interference with respect to their respective businesses
or properties from fire, flood, hurricane, earthquake, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding.

 

5

 

(n)           There
are no legal or governmental proceedings nor are there any contracts or other
documents required by the Securities Act to be described in a prospectus that
are not described in the Disclosure Documents. 
Except as described in the Disclosure Documents, none of the Company or
the Subsidiaries is in default under any of the contracts described in the
Disclosure Documents, has received a notice or claim of any such default or has
knowledge of any breach of such contracts by the other party or parties
thereto, except such defaults or breaches as would not, individually or in the
aggregate, have a Material Adverse Effect.

(o)           Each
of the Company and the Subsidiaries has good and marketable title to all real
property described in the Disclosure Documents as being owned by it and good
and marketable title to the leasehold estate in the real property described
therein as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as described in the
Disclosure Documents or such as would not, individually or in the aggregate,
have a Material Adverse Effect.  All
leases, contracts and agreements, including those referred to in the Disclosure
Documents, to which the Company or any of the Subsidiaries is a party or by
which any of them is bound are, to the knowledge of the Company, valid and
enforceable against the other party or parties thereto, except where the
invalidity or unenforceability would not, individually or in the aggregate,
have a Material Adverse Effect.

(p)           Each
of the Company and the Subsidiaries has filed all necessary federal, state and
foreign income and franchise tax returns, except where the failure to so file
such returns would not, individually or in the aggregate, have a Material
Adverse Effect, and has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company or any Subsidiary is contesting in good faith
and for which adequate reserves have been provided in accordance with generally
accepted accounting principles, there is no tax deficiency that has been
asserted against the Company or any Subsidiary that would, individually or in
the aggregate, have a Material Adverse Effect.

(q)           For
purposes of this Agreement, the following terms shall have the following
meanings:  “Environmental Law”
means any federal, state, local or municipal statute, law, rule, regulation,
ordinance, code, policy or rule of common law and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment binding on any of the Company or the Subsidiaries, relating
to pollution or protection of the environment, natural resources or health or
safety including, without limitation, any relating to the release or threatened
release of any pollutant, contaminated substance, material, waste, chemical or
contaminant subject to regulation thereunder. 
Except as disclosed in the Disclosure Documents and except as would not,
individually or in the aggregate, have a Material Adverse Effect, (A) each
of the Company and the Subsidiaries is in compliance with all, and is not
subject to liability (including, without limitation, fines or penalties) under
any, applicable Environmental Laws, (B) each of the Company and the
Subsidiaries has made all filings and provided all notices required under any
applicable Environmental Law, and has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance with
their requirements, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation,

 

6

 

investigation, proceeding, notice or demand letter or
request for information pending or, to the best knowledge of the Company,
threatened against the Company or any of the Subsidiaries under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company or any of the
Subsidiaries, (E) neither the Company nor any of the Subsidiaries is
subject to any order, decree or agreement requiring, or is otherwise obligated
or required to perform any response or corrective action relating to any
hazardous material, (F) neither the Company nor any of the Subsidiaries
has received notice that it has been identified as a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (“CERCLA”), or any comparable state
law, (G) no property or facility of the Company or any of the Subsidiaries
is (i) listed or proposed for listing on the National Priorities List under
CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation
and Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental authority and
(H) there are no past or present actions, events, operations or activities
which could reasonably be expected to prevent or interfere with compliance by
the Company or any Subsidiary with any applicable Environmental Law or to
result in liability (including, without limitation, fines or penalties) under
any applicable Environmental Law.

(r)            None
of the Company or the Subsidiaries is, or immediately after the Closing Date
will be, required to register as an “investment company” or a company
“controlled by” an “investment company” within the meaning of the Investment Company
Act of 1940, as amended (the “Investment Company Act”).

(s)           None
of the Company or the Subsidiaries or any of such entities’ directors,
officers, employees, agents or controlling persons has taken, directly or indirectly,
any action designed, or that might reasonably be expected, to cause or result,
under the Securities Acts or otherwise, in, or that has constituted,
stabilization or manipulation of the price of the Shares.

(t)            None
of the Company, the Subsidiaries or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act) has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any “security” (as defined
in the Securities Act) which is or could be integrated with the sale of the
Shares in a manner that would require the registration under the Securities Act
of the Shares or (ii) engaged in any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) in connection with the offering of the Shares or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.  Assuming the accuracy
of the representations and warranties of the Purchasers in Section 6
hereof, it is not necessary in connection with the offer, sale and delivery of
the Shares to the Purchasers in the manner contemplated by this Agreement to
register any of the Shares under the Securities Act.

(u)           Except
as set forth in the Disclosure Documents, there is no strike, labor dispute,
slowdown or work stoppage with the employees of the Company or any

 

7

 

of the Subsidiaries which is pending or, to the best
knowledge of the Company or any of the Subsidiaries, threatened.

(v)           Each
of the Company and the Subsidiaries carries insurance (including
self-insurance) in such amounts and covering such risks as in its reasonable
determination is adequate for the conduct of its business and the value of its
properties.

(w)          Each
of the Company and the Subsidiaries (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management’s authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance
with management’s authorization and (D) the reported accountability for
its assets is compared with existing assets at reasonable intervals.

(x)            No
holder of securities of the Company or any Subsidiary will be entitled to have
such securities registered under the Shelf Registration Statement.

(y)           Except
the fee payable to Roth Capital Partners, LLC (“Roth”), the Company does
not know of any claims for services, either in the nature of a finder’s fee or
financial advisory fee, with respect to the offering of the Shares and the
transactions contemplated by the Disclosure Documents.

(z)            The
Common Stock is listed on the Nasdaq National Market.  The Company currently is not in violation of, and the
consummation of the transactions contemplated by the Basic Documents, will not
violate, any rule of the National Association of Securities Dealers, except
that the Company may issue the Shares prior to expiration of the full 15 day
notice period set forth in Section 4310(c)(17) of the NASD Manual.

(aa)         The
Company is eligible to use Form S-3 for the resale of the Shares by Purchasers
or their transferees.  Any certificate
signed by any officer of the Company or any Subsidiary and delivered pursuant
to this Agreement shall be deemed a joint and several representation and
warranty by the Company to each Purchaser as to the matters covered thereby.

3.             Purchase, Sale and Delivery of the Shares.  On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth and subject to approval of this transaction by
the Company’s Board of Directors, the Company agrees to issue and sell to the
Purchasers, and each Purchaser acting severally and not jointly agrees to
purchase from the Company, the number of Shares set forth on such Purchaser’s
signature page hereto, at $3.10 per share.

One or more certificates in definitive form for the Shares that the
Purchasers have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as each Purchaser requests
upon notice to the Company at least 48 hours prior to the Closing Date (as
defined) shall be delivered by or on behalf of the Company, against payment by
or on behalf of the Purchasers, of the purchase price therefor

 

8

 

by wire transfer of immediately available funds to the account of the
Company previously designated by it in writing.  Such delivery of and payment for the Shares shall be made at the
offices of Orrick, Herrington & Sutcliffe LLP, 1020 Marsh Road, Menlo Park,
CA  94025 (“Orrick”), on March
28, 2002, or at such date as the Purchasers and the Company may agree upon,
such time and date of delivery against payment being herein referred to as the
“Closing Date.”  The Company will
make such certificate or certificates for the Shares available for checking and
packaging by the Purchasers at the offices of Orrick at least 24 hours prior to
the Closing Date.

4.             Certain Covenants.  The Company covenants and agrees with each Purchaser that:

(a)           None
of the Company or any of its Affiliates will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any “security” (as defined
in the Securities Act) which could be integrated with the sale of the Shares in
a manner which would require the registration under the Securities Act of the
Shares.

(b)           The
Company will apply the net proceeds from the sale of the Shares for working
capital and general corporate purposes, including the repayment of bank
borrowings.

(c)           Except
in connection with the filing of the Shelf Registration Statement, the Company
will not, and will not permit any of the Subsidiaries to, engage in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offering of
the Shares or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.

(d)           The
Company will not become, at any time prior to the expiration of three years
after the Closing Date, an open-end investment company, unit investment trust,
closed-end investment company or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act.

(e)           The
Company will file the additional listing application for the Shares with the
Nasdaq National Market prior to the Closing Date and will use its best efforts
to have the Shares listed on the Nasdaq National Market on or prior to the
effective date of the Shelf Registration Statement.

(f)            The
Company will use its best efforts to do and perform all things required to be
done and performed by it under this Agreement and the other Basic Documents
prior to or after the Closing Date and to satisfy all conditions precedent on
its part to the obligations of the Purchasers to purchase and accept delivery
of the Shares.

5.             Conditions of the Purchasers’ Obligations.  The obligation of each Purchaser to purchase
and pay for the Shares is subject to the following conditions unless waived in
writing by the relevant Purchaser:

 

9

 

(a)           The
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects (other than representations and
warranties with a Material Adverse Effect qualifier, which shall be true and correct
as written) on and as of the Closing Date; the Company shall have complied in
all material respects with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date.

(b)           None
of the issuance and sale of the Shares pursuant to this Agreement or any of the
transactions contemplated by any of the other Basic Documents shall be enjoined
(temporarily or permanently) and no restraining order or other injunctive order
shall have been issued in respect thereof; and there shall not have been any
legal action, order, decree or other administrative proceeding instituted or,
to the Company’s knowledge, threatened against the Company or against any
Purchaser relating to the issuance of the Shares or any Purchaser’s activities
in connection therewith or any other transactions contemplated by this
Agreement or the Disclosure Documents or the other Basic Documents.

(c)           The
Purchasers shall have received certificates, dated the Closing Date and signed
by the chief executive officer and the chief financial officer of the Company,
to the effect of paragraphs 5(a) and (b).

(d)           On
or before the Closing Date, the Purchasers shall have received the Registration
Rights Agreement executed by the Company and such agreement shall be in full
force and effect at all times from and after the Closing Date, subject to the
Enforceability Exceptions.

(e)           On
or before the Closing Date, the Nasdaq National Market shall have provided
verbal confirmation that no approvals are needed from such organization in
order to consummate the sale of the Shares as contemplated herein.

(f)            The
Purchasers shall have received an opinion of Orrick, Herrington &
Sutcliffe, LLP, counsel to the Company, with respect to the authorization of
the Shares and other customary matters in the form attached hereto as Exhibit
A.

6.             Representations and Warranties of the Purchasers.

(a)           Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that the Shares to be acquired by it hereunder are being
acquired for its own account for investment (and/or on behalf of managed
accounts who are purchasing solely for their own accounts for investment) and
with no intention of distributing or reselling such Shares or any part thereof
or interest therein in any transaction which would be in violation of the
securities laws of the United States of America or any State, without
prejudice, however, to a Purchaser’s right, subject to the provisions of this
Agreement and the Registration Rights Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares under an effective registration
statement under the Securities Act and in compliance with applicable state
securities laws or under an exemption from such registration, and subject,
nevertheless, to the disposition of a Purchaser’s property being at all

 

10

 

times within its control.  By executing this Agreement, each Purchaser further represents
that such Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any
Person with respect to any of the Shares.

(b)           Each
Purchaser understands that the Shares have not been registered under the
Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a) pursuant to an exemption from registration under the Securities
Act (and, if requested by the Company, based upon an opinion of counsel
acceptable to the Company) or pursuant to an effective registration statement
under the Securities Act and (b) in accordance with all applicable
securities laws of the states of the United States and other jurisdictions.

Each Purchaser agrees to the imprinting, so long as appropriate, of the
following legend on the Shares:

 

The
shares of common stock evidenced by this certificate have not been registered
under the U.S. Securities Act of 1933, as amended, and may not be offered,
sold, pledged or otherwise transferred (“transferred”) in the absence of such
registration or an applicable exemption therefrom. In the absence of such
registration, such shares may not be transferred unless, if the Company
requests, the Company has received a written opinion from counsel in form and
substance satisfactory to the Company stating that such transfer is being made
in compliance with all applicable federal and state securities laws.

The legend set forth above may be removed if and when the Shares are disposed
of pursuant to an effective registration statement under the Securities Act or
in the opinion of counsel to the Company experienced in the area of United
States Federal securities laws such legends are no longer required under
applicable requirements of the Securities Act. 
The Shares shall also bear any other legends required by applicable
Federal or state securities laws, which legends may be removed when in the
opinion of counsel to the Company experienced in the applicable securities
laws, the same are no longer required under the applicable requirements of such
securities laws.  The Company agrees
that it will provide each Purchaser, upon request, with a substitute Share
certificate, not bearing such legend at such time as such legend is no longer
applicable.  Each Purchaser agrees that,
in connection with any transfer of Shares by it pursuant to an effective
registration statement under the Securities Act, such Purchaser will comply
with all prospectus delivery requirements of the Securities Act.  The Company makes no representation,
warranty or agreement as to the availability of any exemption from registration
under the Securities Act with respect to any resale of Shares.

(c)           Each
Purchaser is an institutional investor that is an accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.

 

11

 

(d)           Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that it has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Shares, such Purchaser having
been represented by counsel, and has so evaluated the merits and risks of such
investment and is able to bear the economic risk of such investment and, at the
present time, is able to afford a complete loss of such investment.

(e)           Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that (i) the purchase of the Shares to be purchased by
it has been duly and properly authorized and this Agreement has been duly
executed and delivered by it or on its behalf and constitutes the valid and
legally binding obligation of such Purchaser, enforceable against the Purchaser
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights generally and to general principals
of equity; (ii) the purchase of the Shares to be purchased by it does not
conflict with or violate its charter, by-laws or any law, regulation or court
order applicable to it; and (iii) the purchase of Shares to be purchased
by it does not impose any penalty or other onerous condition on such Purchaser
under or pursuant to any applicable law or governmental regulation.

(f)            Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that neither it nor any of its directors, officers, employees,
agents, or controlling persons has taken, directly or indirectly, any actions
designed, or might reasonably be expected to cause or result, under the
Securities Acts or otherwise, in, or that has constituted, stabilization, or
manipulation of the price of the shares.

(g)           Each
Purchaser acknowledges receipt of the Disclosure Documents and further
acknowledges that it has been afforded (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the offering of the Shares
and the merits and risks of investing in the Shares; (ii) access to information
about the Company and the Company’s financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment in the Shares; and (iii) the opportunity to obtain such
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy and
completeness of the information contained in the Disclosure Documents.

(h)           Each
Purchaser understands and acknowledges that (i) the Shares are offered and
sold without registration under the Securities Act in a private placement that
is exempt from the registration provisions of the Securities Act and
(ii) the availability of such exemption depends in part on, and that the
Company, its counsel and Roth will rely upon, the accuracy and truthfulness of
the foregoing representations and such Purchaser hereby consents to such
reliance.

 

12

 

7.             Survival Clause. 
The respective representations, warranties, agreements and covenants of
the Company and the Purchasers set forth in this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf
of the Company, any of its officers or directors, or any Purchaser and
(ii) delivery of, payment for or disposition of the Shares, and shall be
binding upon and shall inure to the benefit of any successors, assigns, heirs
or personal representatives of the Company and the Purchasers.

8.             Termination.

(a)           This
Agreement may be terminated in the sole discretion of the Company by notice to each
Purchaser severally and not jointly if at the Closing Date:

(i)            the representations and warranties
made by such Purchaser in Section 6 are not true and correct in all material
respects; or

(ii)           as to the Company, the sale of the
Shares hereunder (i) is prohibited or enjoined by any applicable law or
governmental regulation or (ii) subjects the Company to any penalty, or in its
reasonable judgment, other onerous condition under or pursuant to any
applicable law or government regulation that would materially reduce the
benefits to the Company of the sale of the Shares to such Purchaser, so long as
such regulation, law or onerous condition was not in effect in such form at the
date of this Agreement.

(b)           This
Agreement may be terminated in the sole discretion of any Purchaser by notice
to the Company given in the event that the Company shall have failed, refused
or been unable to satisfy all conditions on its part to be performed or
satisfied hereunder on or prior to the Closing Date or if after the execution
and delivery of this Agreement and prior to the Closing Date:

(i)            trading in securities of the Company
on the NASDAQ National Market shall have been suspended;

(ii)           a banking moratorium shall have been
declared by New York or United States authorities; or

(iii)          there shall have been (A) an
outbreak or escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial markets
of the United States that, in the case of (A), (B) or (C) above, in the sole
judgment of any Purchaser, makes it impracticable or inadvisable to proceed
with the delivery of the Shares as contemplated by the Disclosure Documents, as
amended as of the date hereof.

9.             Notices. 
All communications hereunder shall be in writing and, (i) if sent
to a Purchaser, shall be hand delivered, mailed by first-class mail, couriered
by next-day air courier or telecopied and confirmed in writing to their address
on their signature page

 

13

 

hereof and (ii) if
sent to the Company, shall be hand delivered, mailed by first-class mail,
couriered by next-day air courier or telecopied and confirmed in writing to
Landec Corporation, 3603 Haven Avenue, Menlo Park, CA 94025, Attention:  Greg Skinner, and with a copy to Geoffrey P.
Leonard, Orrick, Herrington & Sutcliffe LLP, 1020 March Road, Menlo Park,
CA 94025.

All such notices and communications shall be deemed to have been duly
given:  when delivered by hand, if
personally delivered; five business days after being deposited in the mail,
postage prepaid, if mailed; one business day after being timely delivered to a
next-day air courier guaranteeing overnight delivery; and when receipt is
acknowledged by the addressee, if telecopied.

10.           Successors.  This Agreement shall inure to the benefit of
and be binding upon each Purchaser and the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person.  No purchaser of Shares from any Purchaser
will be deemed a successor because of such purchase.

11.           No Waiver; Modifications in
Writing.  No failure or delay on the
part of the Company or any Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or any Purchaser at law or in equity or otherwise.  No waiver of or consent to any departure by
the Company or any Purchaser from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit
thereof, provided that notice of any such waiver shall be given to each party
hereto as set forth below.  Except as
otherwise provided herein, no amendment, modification or termination of any
provision of this Agreement shall be effective unless signed in writing by or
on behalf of each of the Company and the relevant Purchaser.  Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Company or any Purchaser
from the terms of any provision of this Agreement shall be effective only in
the specific instance and for the specific purpose for which made or
given.  Except where notice is specifically
required by this Agreement, no notice to or demand on the Company in any case
shall entitle the Company to any other or further notice or demand in similar
or other circumstances.

12.           Entire Agreement.  This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.

 

14

 

13.           APPLICABLE LAW.  THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

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

 

15

 

If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among the Company
and the Purchasers.

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  LANDEC
  CORPORATION

  

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SUBSCRIPTION AGREEMENT SIGNATURE PAGE

 

	
  Accepted and Agreed

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Shares Purchased: 

  	
   

  
	
   

  	
   

  	
  Total Investment: $

  	
   

  
	
  Name of Purchaser (Print)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please register Shares as follows:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tax I.D. Number of Person in whose name the Shares
  are to be registered:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
														

 

 

Exhibit A

 

(a)   The Company
has been duly incorporated, is validly existing, is in good standing under the
laws of the State of California, and has the corporate power and authority to
own its property and to conduct its business as now conducted as described in
the Disclosure Documents.

(b)   Each of
Apio, Inc. and Landec Ag, Inc. (the “Subsidiaries”), is validly
existing, is in good standing under the laws of the State of Delaware, and has
the corporate power and authority to own its property and to conduct its business
as now conducted as described in the Disclosure Documents.

(c)   The
authorized capital stock of the Company consists of 50,000,000 shares of common
stock, $0.001 par value per share, and 2,000,000 shares of preferred stock,
$0.001 par value per share.  To our
knowledge, except as set forth in the Registration Rights Agreement, no holder
of securities of the Company is entitled to have such securities registered
under the Shelf Registration Statement.

(d)   The Shares
have been duly authorized and, when issued and delivered to and paid for by the
Purchasers in accordance with the terms of the Subscription Agreement, will be
validly issued, fully paid and non-assessable, and will not be issued in
violation of any preemptive rights pursuant to any law or contained in the
Company’s articles of incorporation or bylaws or any Material Agreement.  The term “Material Agreements” shall
mean only those agreements to which the Company is a party and which are listed
as an exhibit to the Company’s most recently filed Annual Report on Form 10-K
and Quarterly Report on Form 10-Q.

(e)   The Company
has the requisite corporate power and authority to execute, deliver and perform
its obligations under the Transaction Documents, and each such agreement has
been duly authorized, executed and delivered by the Company. The Subscription
Agreement, the Engagement Letter and the Registration Rights Agreement are
herein collectively referred to as the “Transaction Documents.”

(f)    Each of
the Transaction Documents constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with their terms.

(g)   No consent,
approval, authorization, license, qualification, exemption or order of any
court or governmental agency or body on the part of the Company is required in
connection with the execution and delivery of the Transaction Documents by the
Company or for the consummation by the Company of any of the transactions
contemplated thereby, except such consents, approvals, authorizations, licenses,
qualifications, exemptions or orders as may be required under (i) the
Securities Act of 1933, as amended (the “Securities Act”), and state
securities or Blue Sky laws in connection with registration, pursuant to the
Registration Rights Agreement, of the Shares and (ii) federal or state
securities or Blue Sky laws in connection with the issuance and sale of the
Shares pursuant to the Subscription Agreement. 
No consent of any

 

 

third party is required pursuant to the terms of any
Material Agreement for the performance of any Transaction Document by the
Company or for the consummation by the Company of any of the transactions
contemplated thereby, except for those already obtained.

(h)   The
execution, delivery and performance by the Company of the Transaction Documents
and the consummation by the Company of the transactions contemplated thereby
and the issuance of the Shares will not violate, conflict with or constitute or
result in a breach of or a default under (or an event that, with notice or
lapse of time, or both, would constitute a breach of or a default under) any of
(i) the terms or provisions of any Material Agreement, (ii) the articles of
incorporation or bylaws of the Company or (iii) to our knowledge (assuming
compliance with all applicable state securities or Blue Sky laws and the NASD
Rules), any judgment, decree, order of any court or governmental agency or body
having jurisdiction over the Company known to us or any applicable statute,
rule or regulation, which violation, conflict, breach or default would,
individually or in the aggregate, have a Material Adverse Effect.

(i)    To our
knowledge, except as described in the Disclosure Documents, there is not
pending or threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise, that (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Shares or
the application of the proceeds therefrom by the Company in the manner
described in the Subscription Agreement or (ii) if determined adversely to the
Company, is reasonably likely to have a Material Adverse Effect.

(j)    It is not necessary in connection with the
offer, sale and delivery of the Shares to the Purchasers under the Subscription
Agreement to register the Shares under the Securities Act, it being understood
that no opinion is expressed as to any subsequent resale of any of the Shares.

 

2

Landec Corporation

645,161 Shares of Common
Stock

SUBSCRIPTION
AGREEMENT

March 26, 2002

TO EACH OF THE
PURCHASERS NAMED ON THE SIGNATURE PAGES HEREOF

Ladies and Gentlemen:

Landec Corporation, a California corporation (the “Company”),
hereby confirms its agreement with you (the “Purchasers”), as set forth
below.

1.             The Shares. 
Subject to the terms and conditions herein contained, the Company
proposes to issue and sell to each Purchaser the number of shares of its Common
Stock, par value $0.001 per share (the “Common Stock”), set forth on the signature
page of such Purchaser hereto (collectively, the “Shares”).

The Shares will be offered and sold to the Purchasers without such
offers and sales being registered under the Securities Act of 1933, as amended
(together with the rules and regulations of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder, the “Securities
Act”), in reliance on exemptions therefrom.

In connection with the sale of the Shares, the Company has made
available its periodic reports filed with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 since January 1,
2001.  These reports and filings are
collectively referred to as the “Disclosure Documents”.  All references in this Agreement to
financial statements and schedules and other information which is “contained,”
“included” or “stated” in the Disclosure Documents (or other references of like
import) shall be deemed to mean and include all such financial statements and
schedules and other information which is incorporated by reference in the Disclosure
Documents.

The Purchasers and their direct and indirect transferees of the Shares
will be entitled to the benefits of the Registration Rights Agreement to be
dated as of March 26, 2002 among the parties hereto (the “Registration
Rights Agreement”) pursuant to which the Company has agreed, among other
things, to file a shelf registration statement (the “Shelf Registration
Statement”) pursuant to Rule 415 under the Securities Act of 1933 relating
to the resale of the Shares (as defined herein) by holders thereof.

The Registration Rights Agreement, the Engagement Letter dated March 4,
2002 with Roth Capital Partners, LLC, and this Agreement are herein
collectively referred to as the “Basic Documents”.

 

 

2.             Representations and Warranties of the Company.  The Company represents and warrants to and
agrees with each Purchaser that:

(a)           The
Disclosure Documents as of their respective dates did not, and any amendment or
supplement thereto as of its date did not, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The Disclosure Documents,
at the time they were filed with the Commission, complied in all material respects
with the requirements of the Securities Act of 1933 and/or the Securities Acts
of 1934, as the case may be (together with the rules and regulations of the
Commission promulgated thereunder, the “Securities Acts”), as applicable.

(b)           Each
of the Company and its subsidiaries (the “Subsidiaries”) has been duly
incorporated and each of the Company and the Subsidiaries is validly existing
in good standing as a corporation under the laws of its jurisdiction of
incorporation, with the requisite corporate power and authority to own its properties
and conduct its business as now conducted as described in the Disclosure
Documents and is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified would not, individually or in the aggregate,
have a material adverse effect on the business, condition (financial or other),
properties, prospects or results of operations of the Company and the
Subsidiaries, taken as a whole (any such event, a “Material Adverse Effect”);
as of the Closing Date, the Company will have the authorized, issued and
outstanding capitalization set forth in the Disclosure Documents (subject to
the issuance of shares pursuant to this Agreement or pursuant to options
outstanding under the Company’s stock option plans or outstanding warrants or other
rights to acquire shares described in the Disclosure Documents); all of the
outstanding shares of capital stock of the Company and the Subsidiaries have
been duly authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights and are owned
free and clear of all liens, encumbrances, equities, and restrictions on
transferability (other than those imposed by the Securities Act and the state
securities or “Blue Sky” laws) or voting; except as set forth in the Disclosure
Documents, all of the outstanding shares of capital stock of the Subsidiaries
are owned, directly or indirectly, by the Company; the shares of capital stock
of the Company and the Subsidiaries that are reserved for issuance pursuant to
stock option plans or other equity incentive plans is as set forth in the
Disclosure Documents; and except as may be outstanding under stock option plans
or other equity incentive plans that are described in the Disclosure Documents,
there are no outstanding options, warrants or other rights to purchase shares
of capital stock of the Company or the Subsidiaries.

(c)           The
Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under the Basic Documents.  Each of the Basic Documents has been duly and validly authorized
by the Company and, when executed and delivered by the Company, will constitute
a valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms except as (i) the enforcement thereof may
be limited by (A) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws now or hereafter in effect
relating to or

 

2

 

affecting creditors’ rights generally or
(B) general principles of equity and the discretion of the court before
which any proceeding therefore may be brought (regardless of whether such
enforcement is considered in a proceeding at law or in equity) (collectively,
the “Enforceability Exceptions”), and (ii) any rights to indemnity, or
contribution under the Registration Rights Agreement may be limited by federal
and state securities laws and public policy considerations.

(d)           The
Shares have been duly authorized and, when issued upon payment thereof in
accordance with this Agreement, will have been validly issued, fully paid and
nonassessable.  The capital stock of the
Company, including the Common Stock, conforms to the description thereof
contained in the Disclosure Documents. 
The stockholders of the Company have no preemptive or similar rights
with respect to the Common Stock.

(e)           No
consent, approval, authorization, license, qualification, exemption or order of
any court or governmental agency or body or third party is required for the
performance of the Basic Documents by the Company or for the consummation by
the Company of any of the transactions contemplated thereby, or the application
of the proceeds of the issuance of the Shares as described in the Disclosure
Documents, except for such consents, approvals, authorizations, licenses,
qualifications, exemptions or orders (i) as have been obtained on or prior
to the Closing Date, (ii) as are not required to be obtained on or prior
to the Closing Date that will be obtained when required, or (iii) the
failure to obtain which would not, individually or in the aggregate, have a
Material Adverse Effect; all such consents, approvals, authorizations,
licenses, qualifications, exemptions and orders set forth in the Disclosure
Documents which are required to be obtained by the Closing Date will be in full
force and effect as of the Closing Date and not the subject of any pending or,
to the best knowledge of the Company, threatened attack by appeal or direct proceeding
or otherwise.

(f)            None
of the Company or the Subsidiaries is (i) in violation of its certificate of
incorporation or bylaws (or similar organizational document), (ii) in breach or
violation of any statute, judgment, decree, order, rule or regulation
applicable to it or any of its properties or assets, which breach or violation
would, individually or in the aggregate, have a Material Adverse Effect, or
(iii) in default (nor has any event occurred which with notice or passage of
time, or both, would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to which it
is a party or to which it is subject, which default would, individually or in
the aggregate, have a Material Adverse Effect.

(g)           The
execution, delivery and performance by the Company of the Basic Documents and
the consummation by the Company of the transactions contemplated thereby and
the fulfillment of the terms thereof will not (a) violate, conflict with
or constitute or result in a breach of or a default under (or an event that,
with notice or lapse of time, or both, would constitute a breach of or a
default under) any of (i) the terms or provisions of any contract,
indenture, mortgage, deed of trust, loan agreement, note, lease, license,
franchise agreement, permit, certificate or agreement or instrument to which any
of the Company or the Subsidiaries is a party or to which any of their
respective properties or

 

3

 

assets are subject, (ii) the certificate of
incorporation or bylaws of any of the Company or the Subsidiaries (or similar
organizational document) or (iii) any statute, judgment, decree, order,
rule or regulation of any court or governmental agency or other body applicable
to the Company or the Subsidiaries or any of their respective properties or
assets or (b) result in the imposition of any lien upon or with respect to
any of the properties or assets now owned or hereafter acquired by the Company
or any of the Subsidiaries, which violation, conflict, breach, default or lien
would, individually or in the aggregate, have a Material Adverse Effect.

(h)           The
audited consolidated financial statements included in the Disclosure Documents
present fairly the consolidated financial position, results of operations, cash
flows and changes in stockholders’ equity of the entities, at the dates and for
the periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis; the
interim unaudited consolidated financial statements included in the Disclosure
Documents present fairly the consolidated financial position, results of
operations and cash flows of the entities, at the dates and for the periods to
which they relate, subject to year-end audit adjustments, and have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis with the audited consolidated financial statements included
therein; the selected financial and statistical data included in the Disclosure
Documents present fairly the information shown therein and have been prepared
and compiled on a basis consistent with the audited financial statements
included therein, except as otherwise stated therein; and Ernst & Young
LLP, which has examined certain of such financial statements as set forth in its
report included in the Disclosure Documents, is an independent public
accounting firm as required by the Securities Act for an offering registered
thereunder.

(i)            Except
as described in the Disclosure Documents, there is not pending or, to the best
knowledge of the Company, threatened any action, suit, proceeding, inquiry or
investigation, governmental or otherwise, to which any of the Company or the
Subsidiaries is a party, or to which their respective properties or assets are
subject, before or brought by any court, arbitrator or governmental agency or
body, that, if determined adversely to the Company or any such Subsidiary,
would, individually or in the aggregate, have a Material Adverse Effect or that
seeks to restrain, enjoin, prevent the consummation of or otherwise challenge
the issuance or sale of the Shares to be sold hereunder or the application of
the proceeds therefrom or the other transactions described in the Disclosure
Documents.

(j)            None
of the Company or the Subsidiaries has, or, after giving effect to the issuance
and sale of the Shares, will have, any liability for any prohibited transaction
(as defined in Section 406 of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the “Code”)), accumulated funding deficiency (as
defined in Section 302 of ERISA) or any complete or partial withdrawal from a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA), with respect to
any plan (as defined in Section 3(3) of ERISA) as to which the Company or any
of the Subsidiaries has or could have any direct or indirect, actual or
contingent liability.  With respect to
such plans, the Company and the Subsidiaries

 

4

 

are, and, after giving effect to the issuance and sale
of the Shares, will be, in compliance in all material respects with all
provisions of the Code and ERISA.

(k)           The
Company and the Subsidiaries own or possess adequate licenses or other rights
to use all patents, trademarks, service marks, trade names, copyrights and
know-how that are necessary to conduct their businesses as described in the
Disclosure Documents.  None of the
Company or the Subsidiaries has received any notice of infringement of or conflict
with (or knows of any such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names, copyrights
or know-how that, if such assertion of infringement or conflict were sustained,
would, individually or in the aggregate, have a Material Adverse Effect.

(l)            Each
of the Company and the Subsidiaries possesses all licenses, permits,
certificates, consents, orders, approvals and other authorizations from, and
has made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals presently required or necessary to own or lease, as the case
may be, and to operate its respective properties and to carry on its respective
businesses as now or proposed to be conducted as set forth in the Disclosure
Documents (“Permits”), except where the failure to obtain such Permits
would not, individually or in the aggregate, have a Material Adverse Effect;
each of the Company and the Subsidiaries has fulfilled and performed all of its
obligations with respect to such Permits and no event has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or results in any other impairment of the rights of the holder of any
such Permit, except where such revocation, termination or impairment would not,
individually or in the aggregate, have a Material Adverse Effect; and none of
the Company or the Subsidiaries has received any notice of any proceeding relating
to revocation or modification of any such Permit, except as described in the
Disclosure Documents and except where such revocation or modification would
not, individually or in the aggregate, have a Material Adverse Effect.

(m)          Subsequent
to the respective dates as of which information is given in the Disclosure
Documents and except as described therein, (i) the Company and the Subsidiaries
have not incurred any material liabilities or obligations, direct or
contingent, or entered into any material transactions not in the ordinary
course of business, (ii) the Company and the Subsidiaries have not
purchased any of their respective outstanding capital stock, or declared, paid
or otherwise made any dividend or distribution of any kind on any of their respective
capital stock or otherwise (other than, (A) with respect to the Company, the
payment of dividends on its Series B Preferred Stock and (B) with respect to
any of such Subsidiaries, the purchase of, or a dividend or distribution on,
capital stock owned by the Company), (iii) there has not been any material
change in the capital stock or any increase in the long-term indebtedness of
the Company or any of the Subsidiaries, (iv) there has not occurred any
event or condition, individually or in the aggregate, that has a Material
Adverse Effect and (v) the Company and the Subsidiaries have not sustained
any material loss or interference with respect to their respective businesses
or properties from fire, flood, hurricane, earthquake, accident or other calamity,
whether or not covered by insurance, or from any labor dispute or any legal or
governmental proceeding.

 

5

 

(n)           There
are no legal or governmental proceedings nor are there any contracts or other
documents required by the Securities Act to be described in a prospectus that
are not described in the Disclosure Documents. 
Except as described in the Disclosure Documents, none of the Company or
the Subsidiaries is in default under any of the contracts described in the
Disclosure Documents, has received a notice or claim of any such default or has
knowledge of any breach of such contracts by the other party or parties
thereto, except such defaults or breaches as would not, individually or in the
aggregate, have a Material Adverse Effect.

(o)           Each
of the Company and the Subsidiaries has good and marketable title to all real
property described in the Disclosure Documents as being owned by it and good
and marketable title to the leasehold estate in the real property described
therein as being leased by it, free and clear of all liens, charges,
encumbrances or restrictions, except, in each case, as described in the
Disclosure Documents or such as would not, individually or in the aggregate,
have a Material Adverse Effect.  All
leases, contracts and agreements, including those referred to in the Disclosure
Documents, to which the Company or any of the Subsidiaries is a party or by
which any of them is bound are, to the knowledge of the Company, valid and
enforceable against the other party or parties thereto, except where the
invalidity or unenforceability would not, individually or in the aggregate,
have a Material Adverse Effect.

(p)           Each
of the Company and the Subsidiaries has filed all necessary federal, state and
foreign income and franchise tax returns, except where the failure to so file
such returns would not, individually or in the aggregate, have a Material
Adverse Effect, and has paid all taxes shown as due thereon; and other than tax
deficiencies which the Company or any Subsidiary is contesting in good faith
and for which adequate reserves have been provided in accordance with generally
accepted accounting principles, there is no tax deficiency that has been
asserted against the Company or any Subsidiary that would, individually or in
the aggregate, have a Material Adverse Effect.

(q)           For
purposes of this Agreement, the following terms shall have the following
meanings:  “Environmental Law”
means any federal, state, local or municipal statute, law, rule, regulation,
ordinance, code, policy or rule of common law and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment binding on any of the Company or the Subsidiaries, relating
to pollution or protection of the environment, natural resources or health or
safety including, without limitation, any relating to the release or threatened
release of any pollutant, contaminated substance, material, waste, chemical or
contaminant subject to regulation thereunder. 
Except as disclosed in the Disclosure Documents and except as would not,
individually or in the aggregate, have a Material Adverse Effect, (A) each
of the Company and the Subsidiaries is in compliance with all, and is not
subject to liability (including, without limitation, fines or penalties) under
any, applicable Environmental Laws, (B) each of the Company and the
Subsidiaries has made all filings and provided all notices required under any
applicable Environmental Law, and has all permits, authorizations and approvals
required under any applicable Environmental Laws and is in compliance with
their requirements, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, 

 

6

 

investigation, proceeding, notice or demand letter or
request for information pending or, to the best knowledge of the Company,
threatened against the Company or any of the Subsidiaries under any
Environmental Law, (D) no lien, charge, encumbrance or restriction has been
recorded under any Environmental Law with respect to any assets, facility or
property owned, operated, leased or controlled by the Company or any of the
Subsidiaries, (E) neither the Company nor any of the Subsidiaries is
subject to any order, decree or agreement requiring, or is otherwise obligated
or required to perform any response or corrective action relating to any
hazardous material, (F) neither the Company nor any of the Subsidiaries
has received notice that it has been identified as a potentially responsible
party under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (“CERCLA”), or any comparable state
law, (G) no property or facility of the Company or any of the Subsidiaries
is (i) listed or proposed for listing on the National Priorities List under
CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation
and Liability Information System List promulgated pursuant to CERCLA, or on any
comparable list maintained by any state or local governmental authority and
(H) there are no past or present actions, events, operations or activities
which could reasonably be expected to prevent or interfere with compliance by
the Company or any Subsidiary with any applicable Environmental Law or to
result in liability (including, without limitation, fines or penalties) under
any applicable Environmental Law.

(r)            None
of the Company or the Subsidiaries is, or immediately after the Closing Date
will be, required to register as an “investment company” or a company
“controlled by” an “investment company” within the meaning of the Investment Company
Act of 1940, as amended (the “Investment Company Act”).

(s)           None
of the Company or the Subsidiaries or any of such entities’ directors,
officers, employees, agents or controlling persons has taken, directly or indirectly,
any action designed, or that might reasonably be expected, to cause or result,
under the Securities Acts or otherwise, in, or that has constituted,
stabilization or manipulation of the price of the Shares.

(t)            None
of the Company, the Subsidiaries or any of their respective Affiliates (as
defined in Rule 501(b) of Regulation D under the Securities Act) has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of any “security” (as defined
in the Securities Act) which is or could be integrated with the sale of the
Shares in a manner that would require the registration under the Securities Act
of the Shares or (ii) engaged in any form of general solicitation or
general advertising (as those terms are used in Regulation D under the
Securities Act) in connection with the offering of the Shares or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.  Assuming the accuracy
of the representations and warranties of the Purchasers in Section 6
hereof, it is not necessary in connection with the offer, sale and delivery of
the Shares to the Purchasers in the manner contemplated by this Agreement to
register any of the Shares under the Securities Act.

(u)           Except
as set forth in the Disclosure Documents, there is no strike, labor dispute,
slowdown or work stoppage with the employees of the Company or any

 

7

 

of the Subsidiaries which is pending or, to the best
knowledge of the Company or any of the Subsidiaries, threatened.

(v)           Each
of the Company and the Subsidiaries carries insurance (including
self-insurance) in such amounts and covering such risks as in its reasonable
determination is adequate for the conduct of its business and the value of its
properties.

(w)          Each
of the Company and the Subsidiaries (i) makes and keeps accurate books and
records and (ii) maintains internal accounting controls which provide
reasonable assurance that (A) transactions are executed in accordance with
management’s authorization, (B) transactions are recorded as necessary to
permit preparation of its financial statements and to maintain accountability
for its assets, (C) access to its assets is permitted only in accordance
with management’s authorization and (D) the reported accountability for
its assets is compared with existing assets at reasonable intervals.

(x)            No
holder of securities of the Company or any Subsidiary will be entitled to have
such securities registered under the Shelf Registration Statement.

(y)           Except
the fee payable to Roth Capital Partners, LLC (“Roth”), the Company does
not know of any claims for services, either in the nature of a finder’s fee or
financial advisory fee, with respect to the offering of the Shares and the
transactions contemplated by the Disclosure Documents.

(z)            The
Common Stock is listed on the Nasdaq National Market.  The Company currently is not in violation of, and the
consummation of the transactions contemplated by the Basic Documents, will not
violate, any rule of the National Association of Securities Dealers, except
that the Company may issue the Shares prior to expiration of the full 15 day
notice period set forth in Section 4310(c)(17) of the NASD Manual.

(aa)         The
Company is eligible to use Form S-3 for the resale of the Shares by Purchasers
or their transferees.  Any certificate
signed by any officer of the Company or any Subsidiary and delivered pursuant
to this Agreement shall be deemed a joint and several representation and
warranty by the Company to each Purchaser as to the matters covered thereby.

3.             Purchase, Sale and Delivery of the Shares.  On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms
and conditions herein set forth and subject to approval of this transaction by
the Company’s Board of Directors, the Company agrees to issue and sell to the
Purchasers, and each Purchaser acting severally and not jointly agrees to
purchase from the Company, the number of Shares set forth on such Purchaser’s
signature page hereto, at $3.10 per share.

One or more certificates in definitive form for the Shares that the
Purchasers have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as each Purchaser requests
upon notice to the Company at least 48 hours prior to the Closing Date (as defined)
shall be delivered by or on behalf of the Company, against payment by or on
behalf of the Purchasers, of the purchase price therefor

 

8

 

by wire transfer of immediately available funds to the account of the
Company previously designated by it in writing.  Such delivery of and payment for the Shares shall be made at the
offices of Orrick, Herrington & Sutcliffe LLP, 1020 Marsh Road, Menlo Park,
CA  94025 (“Orrick”), on April 5,
2002, or at such date as the Purchasers and the Company may agree upon, such
time and date of delivery against payment being herein referred to as the “Closing
Date.”  The Company will make such
certificate or certificates for the Shares available for checking and packaging
by the Purchasers at the offices of Orrick at least 24 hours prior to the Closing
Date.

4.             Certain Covenants.  The Company covenants and agrees with each Purchaser that:

(a)           None
of the Company or any of its Affiliates will sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any “security” (as defined
in the Securities Act) which could be integrated with the sale of the Shares in
a manner which would require the registration under the Securities Act of the
Shares.

(b)           The
Company will apply the net proceeds from the sale of the Shares for working
capital and general corporate purposes, including the repayment of bank
borrowings.

(c)           Except
in connection with the filing of the Shelf Registration Statement, the Company
will not, and will not permit any of the Subsidiaries to, engage in any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the Securities Act) in connection with the offering of
the Shares or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act.

(d)           The
Company will not become, at any time prior to the expiration of three years
after the Closing Date, an open-end investment company, unit investment trust,
closed-end investment company or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act.

(e)           The
Company will file the additional listing application for the Shares with the
Nasdaq National Market prior to the Closing Date and will use its best efforts
to have the Shares listed on the Nasdaq National Market on or prior to the
effective date of the Shelf Registration Statement.

(f)            The
Company will use its best efforts to do and perform all things required to be
done and performed by it under this Agreement and the other Basic Documents
prior to or after the Closing Date and to satisfy all conditions precedent on
its part to the obligations of the Purchasers to purchase and accept delivery
of the Shares.

5.             Conditions of the Purchasers’ Obligations.  The obligation of each Purchaser to purchase
and pay for the Shares is subject to the following conditions unless waived in
writing by the relevant Purchaser:

 

9

 

(a)           The
representations and warranties of the Company contained in this Agreement shall
be true and correct in all material respects (other than representations and
warranties with a Material Adverse Effect qualifier, which shall be true and correct
as written) on and as of the Closing Date; the Company shall have complied in
all material respects with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date.

(b)           None
of the issuance and sale of the Shares pursuant to this Agreement or any of the
transactions contemplated by any of the other Basic Documents shall be enjoined
(temporarily or permanently) and no restraining order or other injunctive order
shall have been issued in respect thereof; and there shall not have been any
legal action, order, decree or other administrative proceeding instituted or,
to the Company’s knowledge, threatened against the Company or against any
Purchaser relating to the issuance of the Shares or any Purchaser’s activities
in connection therewith or any other transactions contemplated by this
Agreement or the Disclosure Documents or the other Basic Documents.

(c)           The
Purchasers shall have received certificates, dated the Closing Date and signed
by the chief executive officer and the chief financial officer of the Company,
to the effect of paragraphs 5(a) and (b).

(d)           On
or before the Closing Date, the Purchasers shall have received the Registration
Rights Agreement executed by the Company and such agreement shall be in full force
and effect at all times from and after the Closing Date, subject to the Enforceability
Exceptions.

(e)           On
or before the Closing Date, the Nasdaq National Market shall have provided
verbal confirmation that no approvals are needed from such organization in
order to consummate the sale of the Shares as contemplated herein.

(f)            The
Purchasers shall have received an opinion of Orrick, Herrington &
Sutcliffe, LLP, counsel to the Company, with respect to the authorization of
the Shares and other customary matters in the form attached hereto as Exhibit
A.

6.             Representations and Warranties of the Purchasers.

(a)           Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that the Shares to be acquired by it hereunder are being
acquired for its own account for investment (and/or on behalf of managed
accounts who are purchasing solely for their own accounts for investment) and
with no intention of distributing or reselling such Shares or any part thereof
or interest therein in any transaction which would be in violation of the
securities laws of the United States of America or any State, without
prejudice, however, to a Purchaser’s right, subject to the provisions of this
Agreement and the Registration Rights Agreement, at all times to sell or
otherwise dispose of all or any part of such Shares under an effective registration
statement under the Securities Act and in compliance with applicable state
securities laws or under an exemption from such registration, and subject, nevertheless,
to the disposition of a Purchaser’s property being at all

 

10

 

times within its control.  By executing this Agreement, each Purchaser further represents
that such Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participation to any
Person with respect to any of the Shares.

(b)           Each
Purchaser understands that the Shares have not been registered under the
Securities Act and may not be offered, resold, pledged or otherwise transferred
except (a) pursuant to an exemption from registration under the Securities
Act (and, if requested by the Company, based upon an opinion of counsel
acceptable to the Company) or pursuant to an effective registration statement
under the Securities Act and (b) in accordance with all applicable
securities laws of the states of the United States and other jurisdictions.

Each Purchaser agrees to the imprinting, so long as appropriate, of the
following legend on the Shares:

 

The
shares of common stock evidenced by this certificate have not been registered
under the U.S. Securities Act of 1933, as amended, and may not be offered,
sold, pledged or otherwise transferred (“transferred”) in the absence of such
registration or an applicable exemption therefrom. In the absence of such
registration, such shares may not be transferred unless, if the Company
requests, the Company has received a written opinion from counsel in form and
substance satisfactory to the Company stating that such transfer is being made
in compliance with all applicable federal and state securities laws.

The legend set forth above may be removed if and when the Shares are disposed
of pursuant to an effective registration statement under the Securities Act or
in the opinion of counsel to the Company experienced in the area of United
States Federal securities laws such legends are no longer required under
applicable requirements of the Securities Act. 
The Shares shall also bear any other legends required by applicable
Federal or state securities laws, which legends may be removed when in the
opinion of counsel to the Company experienced in the applicable securities
laws, the same are no longer required under the applicable requirements of such
securities laws.  The Company agrees
that it will provide each Purchaser, upon request, with a substitute Share
certificate, not bearing such legend at such time as such legend is no longer
applicable.  Each Purchaser agrees that,
in connection with any transfer of Shares by it pursuant to an effective
registration statement under the Securities Act, such Purchaser will comply
with all prospectus delivery requirements of the Securities Act.  The Company makes no representation,
warranty or agreement as to the availability of any exemption from registration
under the Securities Act with respect to any resale of Shares.

(c)           Each
Purchaser is an institutional investor that is an accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.

 

11

 

(d)           Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that it has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Shares, such Purchaser having
been represented by counsel, and has so evaluated the merits and risks of such
investment and is able to bear the economic risk of such investment and, at the
present time, is able to afford a complete loss of such investment.

(e)           Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that (i) the purchase of the Shares to be purchased by
it has been duly and properly authorized and this Agreement has been duly
executed and delivered by it or on its behalf and constitutes the valid and
legally binding obligation of such Purchaser, enforceable against the Purchaser
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights generally and to general principals
of equity; (ii) the purchase of the Shares to be purchased by it does not
conflict with or violate its charter, by-laws or any law, regulation or court
order applicable to it; and (iii) the purchase of Shares to be purchased
by it does not impose any penalty or other onerous condition on such Purchaser
under or pursuant to any applicable law or governmental regulation.

(f)            Each
Purchaser, severally and not jointly and as to itself only, represents and
warrants to the Company that neither it nor any of its directors, officers, employees,
agents, or controlling persons has taken, directly or indirectly, any actions
designed, or might reasonably be expected to cause or result, under the
Securities Acts or otherwise, in, or that has constituted, stabilization, or
manipulation of the price of the shares.

(g)           Each
Purchaser acknowledges receipt of the Disclosure Documents and further
acknowledges that it has been afforded (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of
the Company concerning the terms and conditions of the offering of the Shares
and the merits and risks of investing in the Shares; (ii) access to information
about the Company and the Company’s financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to
evaluate its investment in the Shares; and (iii) the opportunity to obtain such
additional information which the Company possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy and
completeness of the information contained in the Disclosure Documents.

(h)           Each
Purchaser understands and acknowledges that (i) the Shares are offered and
sold without registration under the Securities Act in a private placement that
is exempt from the registration provisions of the Securities Act and
(ii) the availability of such exemption depends in part on, and that the
Company, its counsel and Roth will rely upon, the accuracy and truthfulness of
the foregoing representations and such Purchaser hereby consents to such
reliance.

 

12

 

7.             Survival Clause. 
The respective representations, warranties, agreements and covenants of
the Company and the Purchasers set forth in this Agreement shall remain in full
force and effect, regardless of (i) any investigation made by or on behalf
of the Company, any of its officers or directors, or any Purchaser and
(ii) delivery of, payment for or disposition of the Shares, and shall be
binding upon and shall inure to the benefit of any successors, assigns, heirs
or personal representatives of the Company and the Purchasers.

8.             Termination.

(a)           This
Agreement may be terminated in the sole discretion of the Company by notice to
each Purchaser severally and not jointly if at the Closing Date:

(i)            the representations and warranties
made by such Purchaser in Section 6 are not true and correct in all material
respects; or

(ii)           as to the Company, the sale of the
Shares hereunder (i) is prohibited or enjoined by any applicable law or
governmental regulation or (ii) subjects the Company to any penalty, or in its
reasonable judgment, other onerous condition under or pursuant to any
applicable law or government regulation that would materially reduce the
benefits to the Company of the sale of the Shares to such Purchaser, so long as
such regulation, law or onerous condition was not in effect in such form at the
date of this Agreement.

(b)           This
Agreement may be terminated in the sole discretion of any Purchaser by notice
to the Company given in the event that the Company shall have failed, refused
or been unable to satisfy all conditions on its part to be performed or
satisfied hereunder on or prior to the Closing Date or if after the execution
and delivery of this Agreement and prior to the Closing Date:

(i)            trading in securities of the Company
on the NASDAQ National Market shall have been suspended;

(ii)           a banking moratorium shall have been
declared by New York or United States authorities; or

(iii)          there shall have been (A) an
outbreak or escalation of hostilities between the United States and any foreign
power, (B) an outbreak or escalation of any other insurrection or armed
conflict involving the United States or any other national or international
calamity or emergency, or (C) any material change in the financial markets
of the United States that, in the case of (A), (B) or (C) above, in the sole
judgment of any Purchaser, makes it impracticable or inadvisable to proceed
with the delivery of the Shares as contemplated by the Disclosure Documents, as
amended as of the date hereof.

9.             Notices. 
All communications hereunder shall be in writing and, (i) if sent
to a Purchaser, shall be hand delivered, mailed by first-class mail, couriered
by next-day air courier or telecopied and confirmed in writing to their address
on their signature page

 

13

 

hereof and (ii) if
sent to the Company, shall be hand delivered, mailed by first-class mail,
couriered by next-day air courier or telecopied and confirmed in writing to
Landec Corporation, 3603 Haven Avenue, Menlo Park, CA 94025, Attention:  Greg Skinner, and with a copy to Geoffrey P.
Leonard, Orrick, Herrington & Sutcliffe LLP, 1020 March Road, Menlo Park,
CA 94025.

All such notices and communications shall be deemed to have been duly
given:  when delivered by hand, if
personally delivered; five business days after being deposited in the mail,
postage prepaid, if mailed; one business day after being timely delivered to a
next-day air courier guaranteeing overnight delivery; and when receipt is
acknowledged by the addressee, if telecopied.

10.           Successors.  This Agreement shall inure to the benefit of
and be binding upon each Purchaser and the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained; this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of
such persons and for the benefit of no other person.  No purchaser of Shares from any Purchaser will be deemed a successor
because of such purchase.

11.           No Waiver; Modifications in
Writing.  No failure or delay on the
part of the Company or any Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to the
Company or any Purchaser at law or in equity or otherwise.  No waiver of or consent to any departure by
the Company or any Purchaser from any provision of this Agreement shall be
effective unless signed in writing by the party entitled to the benefit thereof,
provided that notice of any such waiver shall be given to each party hereto as
set forth below.  Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective unless signed in writing by or on behalf of
each of the Company and the relevant Purchaser.  Any amendment, supplement or modification of or to any provision
of this Agreement, any waiver of any provision of this Agreement, and any consent
to any departure by the Company or any Purchaser from the terms of any
provision of this Agreement shall be effective only in the specific instance
and for the specific purpose for which made or given.  Except where notice is specifically required by this Agreement,
no notice to or demand on the Company in any case shall entitle the Company to
any other or further notice or demand in similar or other circumstances.

12.           Entire Agreement.  This Agreement constitutes the entire
agreement among the parties hereto and supersedes all prior agreements,
understandings and arrangements, oral or written, among the parties hereto with
respect to the subject matter hereof.

 

14

 

13.           APPLICABLE LAW.  THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
GIVING EFFECT TO PROVISIONS RELATING TO CONFLICTS OF LAW TO THE EXTENT THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

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

 

15

 

If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this Agreement shall constitute a binding agreement among the Company
and the Purchasers.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  LANDEC
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SUBSCRIPTION AGREEMENT
SIGNATURE PAGE

	
  Accepted and Agreed

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Shares Purchased: 

  	
   

  
	
   

  	
   

  	
  Total Investment: $

  	
   

  
	
  Name of Purchaser (Print)

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please register Shares as follows:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tax I.D. Number of Person in whose name the Shares
  are to be registered:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
														

 

 

Exhibit A

 

(a)   The Company
has been duly incorporated, is validly existing, is in good standing under the
laws of the State of California, and has the corporate power and authority to
own its property and to conduct its business as now conducted as described in
the Disclosure Documents.

(b)   Each of
Apio, Inc. and Landec Ag, Inc. (the “Subsidiaries”), is validly
existing, is in good standing under the laws of the State of Delaware, and has
the corporate power and authority to own its property and to conduct its business
as now conducted as described in the Disclosure Documents.

(c)   The
authorized capital stock of the Company consists of 50,000,000 shares of common
stock, $0.001 par value per share, and 2,000,000 shares of preferred stock,
$0.001 par value per share.  To our
knowledge, except as set forth in the Registration Rights Agreement, no holder
of securities of the Company is entitled to have such securities registered
under the Shelf Registration Statement.

(d)   The Shares
have been duly authorized and, when issued and delivered to and paid for by the
Purchasers in accordance with the terms of the Subscription Agreement, will be
validly issued, fully paid and non-assessable, and will not be issued in
violation of any preemptive rights pursuant to any law or contained in the
Company’s articles of incorporation or bylaws or any Material Agreement.  The term “Material Agreements” shall
mean only those agreements to which the Company is a party and which are listed
as an exhibit to the Company’s most recently filed Annual Report on Form 10-K
and Quarterly Report on Form 10-Q.

(e)   The Company
has the requisite corporate power and authority to execute, deliver and perform
its obligations under the Transaction Documents, and each such agreement has
been duly authorized, executed and delivered by the Company. The Subscription
Agreement, the Engagement Letter and the Registration Rights Agreement are
herein collectively referred to as the “Transaction Documents.”

(f)    Each of
the Transaction Documents constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with their terms.

(g)   No consent,
approval, authorization, license, qualification, exemption or order of any
court or governmental agency or body on the part of the Company is required in
connection with the execution and delivery of the Transaction Documents by the
Company or for the consummation by the Company of any of the transactions
contemplated thereby, except such consents, approvals, authorizations,
licenses, qualifications, exemptions or orders as may be required under (i) the
Securities Act of 1933, as amended (the “Securities Act”), and state
securities or Blue Sky laws in connection with registration, pursuant to the
Registration Rights Agreement, of the Shares and (ii) federal or state
securities or Blue Sky laws in connection with the issuance and sale of the
Shares pursuant to the Subscription Agreement. 
No consent of any

 

 

third party is required pursuant to the terms of any
Material Agreement for the performance of any Transaction Document by the
Company or for the consummation by the Company of any of the transactions
contemplated thereby, except for those already obtained.

(h)   The
execution, delivery and performance by the Company of the Transaction Documents
and the consummation by the Company of the transactions contemplated thereby
and the issuance of the Shares will not violate, conflict with or constitute or
result in a breach of or a default under (or an event that, with notice or
lapse of time, or both, would constitute a breach of or a default under) any of
(i) the terms or provisions of any Material Agreement, (ii) the articles of
incorporation or bylaws of the Company or (iii) to our knowledge (assuming
compliance with all applicable state securities or Blue Sky laws and the NASD
Rules), any judgment, decree, order of any court or governmental agency or body
having jurisdiction over the Company known to us or any applicable statute,
rule or regulation, which violation, conflict, breach or default would,
individually or in the aggregate, have a Material Adverse Effect.

(i)    To our
knowledge, except as described in the Disclosure Documents, there is not
pending or threatened any action, suit, proceeding, inquiry or investigation,
governmental or otherwise, that (i) seeks to restrain, enjoin, prevent the
consummation of or otherwise challenge the issuance or sale of the Shares or
the application of the proceeds therefrom by the Company in the manner
described in the Subscription Agreement or (ii) if determined adversely to the
Company, is reasonably likely to have a Material Adverse Effect.

(j)    It is not necessary in connection with the
offer, sale and delivery of the Shares to the Purchasers under the Subscription
Agreement to register the Shares under the Securities Act, it being understood
that no opinion is expressed as to any subsequent resale of any of the Shares.

 

2

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