Document:

Exhibit

EXHIBIT 10.1 2002 Lilly Stock Plan, as amended

AMENDED AND RESTATED 
2002 LILLY 
STOCK PLAN
(Effective May 07, 2018)
ARTICLE 1.    PURPOSES OF THE PLAN
The Company believes that this Amended and Restated 2002 Lilly Stock Plan, as amended from time to time (the “Plan”), will benefit the Company’s shareholders by allowing the Company to attract, motivate and retain the best available Employees and Directors and by providing those Employees and Directors stock-based incentives to strengthen the alignment of interests between those persons and the Company’s shareholders.  
ARTICLE 2.    DEFINITIONS 
Wherever the following terms are used in the Plan, they shall have the meanings specified below, unless the context clearly indicates otherwise.  The singular pronoun shall include the plural where the context so indicates.
2.1    “Affiliate” shall have the meaning given to such term in Rule 12b-2 promulgated under the Exchange Act.  The Board shall have the authority to determine the time or times at which “Affiliate” status is determined within the foregoing definition. 
2.2    “Applicable Laws” means the requirements relating to the administration of equity-based and cash-based awards, as applicable, and the related issuance of Shares under U.S. state corporate laws, U.S. federal and state and non-U.S. securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any non-U.S. country or jurisdiction where Awards are, or will be, granted under the Plan.
2.3    “Award” means an Option, Restricted Stock Units, Restricted Stock, a Stock Appreciation Right, Dividend Equivalent Rights, an Other Share-Based Award or a Performance-Based Award granted to a Participant pursuant to the Plan.  
2.4    “Award Agreement” means any written agreement, contract, or other instrument or document evidencing the terms and conditions of an Award, including through electronic medium.
2.5    “Board” means the board of directors of the Company.
2.6    “Change in Control” means and includes each of the following:
(a)    the acquisition by any “person,” as that term is used in Sections 13(d) and 14(d) of the Exchange Act (other than (i) the Company, (ii) any subsidiary of the Company, (iii) any employee benefit plan or employee stock plan of the Company or a subsidiary of the Company or any trustee or fiduciary with respect to any such plan when acting in that capacity, or (iv) Lilly Endowment, Inc.) of “beneficial ownership,” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of twenty percent (20%) or more of the shares of the Company’s capital stock the holders of which have general voting power under ordinary circumstances to elect at least a majority of the Board (or which would have such voting power but for the application of the Indiana Control Shares Statute) (“Voting Stock”); provided, however, that an acquisition of Voting Stock directly from the Company shall not constitute a Change in Control under this Section 2.6(a);
(b)    the first day on which less than one-half of the total membership of the Board shall be Continuing Directors (as that term is defined in Section 13(f) of the Company's Articles of Incorporation);
(c)    consummation of a merger, share exchange, or consolidation of the Company (a “Transaction”), other than a Transaction which would result in the Voting Stock of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting 

securities of the surviving entity) more than sixty percent (60%) of the Voting Stock of the Company or such surviving entity immediately after such Transaction; 
(d)    a complete liquidation of the Company or a sale or disposition of all or substantially all the assets of the Company, other than a sale or disposition of assets to any subsidiary of the Company. 
For purposes of this Section 2.6(a) only, the term “subsidiary” means a corporation or limited liability company of which the Company owns directly or indirectly fifty percent (50%) or more of the voting power.
2.7    “Code” means the U.S. Internal Revenue Code of 1986, as amended.  All references herein to specific sections of the Code shall include any successor provisions of the Code or corresponding sections of any future U.S. federal tax code.
2.8    “Committee” means the committee of the Board appointed or described in Article 3 to administer the Plan. 
2.9    “Common Stock” means the common stock of the Company, no par value, and such other securities of the Company that may be substituted for the Common Stock pursuant to Article 13.
2.10    “Company” means Eli Lilly and Company, an Indiana corporation, and any successor corporation thereto.
2.11     “Director” means a member of the Board.
2.12    “Disability” means, unless otherwise provided in an Award Agreement, that the Participant would qualify to receive benefit payments under the long-term disability plan or policy, as it may be amended from time to time, of the Company or the Affiliate to which the Participant provides Service regardless of whether the Participant is covered by such policy.  If the Company or the Affiliate to which the Participant provides Service does not have a long-term disability policy, “Disability” means that a Participant is unable to carry out the responsibilities and functions of the position held by the Participant by reason of any medically determined physical or mental impairment for a period of not less than ninety (90) consecutive days.  A Participant shall not be considered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient to satisfy the Committee in its discretion.  Notwithstanding the foregoing, (a) for purposes of Incentive Stock Options granted under the Plan, “Disability” means that the Participant is disabled within the meaning of Section 22(e)(3) of the Code, and (b) with respect to an Award that is subject to Section 409A of the Code where the payment or settlement of the Award will accelerate as a result of the Participant’s Disability, solely for purposes of determining the timing of payment, no such event will constitute a Disability for purposes of the Plan or any Award Agreement unless such event also constitutes a “disability” as defined under Section 409A of the Code.
2.13    “Dividend Equivalent Right” means a right to receive the equivalent value of dividends paid on the Shares with respect to Shares underlying Restricted Stock Units or an Other Share-Based Award that is a Full Value Award prior to vesting of the Award in accordance with the provision of Section 12.4.
2.14    “Effective Date” means the date that the shareholders approved the amendment and restatement of the Plan.
2.15    “Eligible Individual” means any natural person who is an Employee or a Director determined by the Committee as eligible to participate in the Plan.
2.16    “Employee” means an individual, including an officer or Director, who is treated as an employee in the personnel records of the Company or an Affiliate and providing Service to the Company or the Affiliate.  Neither services as a Director nor payment of a director’s fee by the Company or an Affiliate shall be sufficient to constitute “employment” by the Company or an Affiliate.
2.17    “Equity Restructuring” shall mean a nonreciprocal transaction between the Company and its shareholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the Shares (or other securities of the Company) or the price of Shares (or other securities) and causes a change in the per-share value of the Shares underlying outstanding Awards.

2.18    “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
2.19    “Fair Market Value” means, as of any given date, (a) if Shares are traded on any established stock exchange, the closing price of a Share as quoted on the principal exchange on which the Shares are listed, as reported in The Wall Street Journal (or such other source as the Company may deem reliable for such purposes) for such date, or if no sale occurred on such date, the first trading date immediately prior to such date during which a sale occurred; or (b) if Shares are not traded on an exchange but are regularly quoted on a national market or other quotation system, the closing sales price on such date as quoted on such market or system, or if no sales occurred on such date, then on the date immediately prior to such date on which sales prices are reported; or (c) in the absence of an established market for the Shares of the type described in (a) or (b) of this Section 2.19, the fair market value established by the Committee acting in good faith, under a reasonable methodology and reasonable application in compliance with Section 409A of the Code to the extent such determination is necessary for Awards under the Plan to comply with, or be exempt from, Section 409A of the Code. 
Notwithstanding the foregoing, for income tax reporting purposes under U.S. federal, state, local or non-US law and for such other purposes as the Committee deems appropriate, including, without limitation, where Fair Market Value is used in reference to exercise, vesting, settlement or payout of an Award, the Fair Market Value shall be determined by the Company in accordance with uniform and nondiscriminatory standards adopted by it from time to time.
2.20    “Full Value Award” means any Award other than an (i) Option, (ii) Stock Appreciation Right or (iii) other Award for which the Participant pays (or the value or amount payable under the Award is reduced by) an amount equal to or exceeding the Fair Market Value of the Shares, determined as of the date of grant. 
2.21    “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of the Code.
2.22    “Non-Employee Director” means a Director of the Company who is not an Employee. 
2.23    “Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.
2.24    “Option” means a right granted to a Participant pursuant to Article 6 to purchase a specified number of Shares at a specified price during specified time periods.  An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.
2.25    “Other Share-Based Award” shall mean an Award granted pursuant to Article 10. 
2.26    “Outstanding Qualified Performance-Based Awards” shall mean any Awards granted prior to November 3, 2017 and that are outstanding as of the Effective Date and that are intended to constitute “qualified performance-based compensation” as described in Section 162(m)(4)(C) of the Code.  For the avoidance of any doubt, all provisions of the Plan governing Outstanding Qualified Performance Awards that were in effect prior to the Effective Date shall continue in effect with respect to Outstanding Qualified Performance-Based Awards, notwithstanding the elimination of such provisions from the Plan as of the Effective Date.
2.27    “Participant” means any Eligible Individual who, as an Employee or Director, has been granted an Award pursuant to the Plan.
2.28    “Performance-Based Award” means an Award that are subject, in whole or in part, to Performance Goals and are granted pursuant to Article 10.
2.29    “Performance Criteria” means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant for a Performance Period.  The Performance Criteria that will be used to establish Performance Goals include, but are not limited to, the following: cash flow (including, without limitation, operating cash flow and free cash flow), earnings per share, gross or net profit margin, net income (either before or after interest, taxes, amortization, and/or depreciation), operating income (either before or after restructuring and amortization charges), return on capital or return on invested capital, return on equity, return on operating assets or net assets, return on sales, sales or revenue, stock price goals, total shareholder return.  The Committee shall define objectively the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant.  

2.30    “Performance Goals” means, for a Performance Period, the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria that the Committee, in its sole discretion, selects.  The Committee, in its sole discretion, may provide that one or more objectively determinable adjustments shall be made to one or more of the Performance Goals.  
2.31     “Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance-Based Award, provided that the duration of any Performance Period shall not be less than twelve (12) months.
2.32    “Plan” means this Amended and Restated 2002 Lilly Stock Plan, as it may be amended from time to time. 
2.33    “Prior Plans” means the 1989, 1994 and 1998 Lilly Stock Plans, as amended from time to time.
2.34    “Restricted Stock” means Shares awarded to a Participant pursuant to Article 8 that are subject to certain restrictions and may be subject to risk of forfeiture.
2.35    “Restricted Stock Unit” means an Award granted pursuant to Article 7 that shall be evidenced by a bookkeeping entry representing the equivalent of one Share. 
2.36    “Securities Act” means the U.S. Securities Act of 1933, as amended.
2.37    “Service” means service as an Employee or Non-Employee Director.  Except as otherwise determined by the Committee in its sole discretion, a Participant’s Service terminates when the Participant ceases to actively provide services to the Company or an Affiliate and shall not be extended by any notice period mandated under applicable employment laws or the terms of the Participant’s employment or service contract, if any.  The Committee shall determine which leaves shall count toward Service and when Service terminates for all purposes under the Plan.  Further, unless otherwise determined by the Committee, a Participant’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant provides Service to the Company or an Affiliate, or a transfer between entities (i.e., the Company or any Affiliates), provided that there is no interruption or other termination of Service in connection with the Participant’s change in capacity or transfer between entities (except as may be required to effect the change in capacity or transfer between entities).  For purposes of determining whether an Option is entitled to Incentive Stock Option status, an Employee’s Service shall be treated as terminated ninety (90) days after such Employee goes on leave, unless such Employee’s right to return to active work is guaranteed by law or by a contract.  
2.38    “Share” means a share of Common Stock.
2.39    “Stock Appreciation Right” or “SAR” means a right granted pursuant to Article 9 to receive a payment equal to the excess of the Fair Market Value of a specified number of Shares on the date the SAR is exercised over the exercise price of the SAR, as set forth in the applicable Award Agreement.  
2.40    “Tax-Related Items” means any U.S. federal, state, and/or local taxes and any taxes imposed by a jurisdiction outside of the U.S. (including, without limitation, income tax, social insurance and similar contributions, payroll tax, fringe benefits tax, payment on account, employment tax, stamp tax and any other taxes related to participation in the Plan and legally applicable to a Participant, including any employer liability for which the Participant is liable pursuant to Applicable Laws or the applicable Award Agreement).
ARTICLE 3.        ADMINISTRATION
3.1    Committee.  The Board, at its discretion or as otherwise necessary to comply with the requirements of Section 162(m) of the Code (with respect to Outstanding Qualified Performance-Based Awards), Rule 16b-3 promulgated under the Exchange Act or to the extent required by any other Applicable Law or regulation, may delegate administration of the Plan to a Committee consisting of two or more members of the Board.  Unless otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors, each of whom is an “outside director,” within the meaning of Section 162(m) of the Code (with respect to Outstanding Qualified Performance-Based Awards), a “non-employee director” within the meaning of Rule 16b-3(b)(3) under the Exchange Act, or any successor rule, and an “independent director” under the applicable New York Stock Exchange rules (or other principal securities 

market on which Shares are traded).  Notwithstanding the foregoing: (a) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect to all Awards granted to Non-Employee Directors and for purposes of such Awards the term “Committee” as used in this Plan shall be deemed to refer to the Board and (b) the Committee may delegate its authority hereunder to the extent permitted by Section 3.5 hereof.  Unless and until the Board delegates administration of the Plan to a Committee as set forth below, the Plan shall be administered by the full Board, and for such purposes the term “Committee” as used in this Plan shall be deemed to refer to the Board.  In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan, except with respect to matters which under Rule 16b-3 under the Exchange Act or Section 162(m) of the Code (with respect to Outstanding Qualified Performance-Based Awards), or any regulations or rules issued thereunder, are required to be determined in the sole discretion of the Committee.
3.2    Action by the Committee.  Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee.  Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.
3.3    Authority of Committee.  Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:
(a)    designate Participants to receive Awards;
(b)    determine the type or types of Awards to be granted to each Participant;
(c)    determine the number of Awards to be granted and the number of Shares to which an Award will relate;
(d)    determine the terms and conditions of any Award granted pursuant to the Plan, including, without limitation, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, any provisions related to recoupment of gain on an Award, based in each case on such considerations as the Committee in its sole discretion determines; 
(e)    determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or other property, or an Award may be cancelled, forfeited, or surrendered;
(f)    prescribe the form of each Award Agreement, which need not be identical for each Participant and may vary for Participants within and outside of the U.S.;
(g)    decide all other matters that must be determined in connection with an Award;
(h)    establish, adopt or revise any rules and regulations, including adopting sub-plans to the Plan, for the purposes of facilitating compliance with foreign laws, easing the administration of the Plan and/or taking advantage of tax-favorable treatment for Awards granted to Participants outside the U.S., in each case as it may deem necessary or advisable;
(i)    suspend or terminate the Plan at any time, subject to Article 15;
(j)    amend or modify the terms of an Award, including, without limitation, accelerate the vesting and/or exercisability of any Award for any reason, including, without limitation, the Participant's retirement or other termination; provided, however, that no amendment or modification of an outstanding Award other than the following types of amendments or modifications shall affect adversely, in any material way, any Award previously granted pursuant to the Plan without the prior written consent of the Participant: (i) an amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock Option; (ii) an amendment made or other action taken pursuant to Section 16.14 of the Plan; (iii) any amendment or other action that may be required or desirable to facilitate compliance with Applicable Laws, as determined in the sole discretion of the Committee .

(k)    interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; and
(l)    make all other decisions and determinations that may be required pursuant to the Plan or that the Committee deems necessary or advisable to administer the Plan.
3.4    Decisions Binding.  The Committee’s interpretation of the Plan, any Awards granted pursuant to the Plan, and any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.
3.5    Delegation of Authority.  To the extent permitted by Applicable Laws, the Board, from time to time, may delegate to a Committee of one or more members of the Board (pursuant to delegation that does not meet the requirement of Section 3.1 hereof) or to one or more officers of the Company the authority to grant Awards to Participants other than (a) Employees who are subject to Section 16 of the Exchange Act, or (b) officers of the Company (or Directors) to whom authority to grant or amend Awards has been delegated hereunder.  Furthermore, if the authority to grant or amend Awards has been delegated to the Committee pursuant and subject to the preceding sentence, such authority may be further delegated by the Committee to one or more officers of the Company.  For the avoidance of doubt, provided it meets the limitations of this Section 3.5, any delegation hereunder shall include the right to modify Awards as necessary to accommodate changes in Applicable Laws or regulations, including in jurisdictions outside the U.S.  Furthermore, any delegation hereunder shall be subject to the restrictions and limitations that the Board (or, as applicable, the Committee) specifies at the time of such delegation, and the Board (or, as applicable, the Committee) may rescind at any time the authority so delegated and/or appoint a new delegatee.  At all times, the delegatee appointed under this Section 3.5 shall serve in such capacity at the pleasure of the Board (or, as applicable, the Committee).
ARTICLE 4.        SHARES SUBJECT TO THE PLAN
4.1    Number of Shares. Subject to Article 13 hereof, the aggregate number of Shares that may be issued or transferred pursuant to Awards under the Plan shall be the sum of (i) 75,657,296 Shares, plus (ii) the number of Shares available for issuance under the Prior Plans (including Shares subject to awards granted under the Prior Plans that otherwise subsequently became available for issuance under the Prior Plans upon forfeiture, cancellation, or termination of the awards or any other reason under the terms of the Prior Plans); provided, however, that only 53,000,000 Shares may be issued or transferred pursuant to new Awards granted on or following the Effective Date. Subject to Article 13, the aggregate number of Shares that may be issued or transferred pursuant to the exercise of Incentive Stock Options shall be 30,000,000.
(a)    Shares Reissuable under Plan.  The following Shares shall again be available for the grant of an Award pursuant to the Plan: (i) Shares that are not issued as a result of the termination, expiration or lapsing of any Award for any reason; (ii) Shares subject to a Full Value Award that are not issued because the Award is settled in cash; (iii) Shares covered by an Option which are surrendered in payment of the Option exercise or purchase price or in satisfaction of obligations for Tax-Related Items incident to the exercise of an Option; (iv) Shares covered by an Award which are surrendered in satisfaction of obligations for Tax-Related Items incident to the vesting or settlement of a Full Value Award.  Notwithstanding the provisions of this Section 4.1, no Shares may again be optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to qualify as an Incentive Stock Option.
(b)    Shares Not Reissuable under Plan.  Notwithstanding the foregoing, Shares that are repurchased on the open market with the proceeds of the exercise of an Option shall be counted against the maximum number of Shares available for issuance pursuant to Section 4.1 hereof and shall not be returned to the Plan.
(c)    Shares Not Counted Against Share Pool Reserve.  To the extent permitted by Applicable Laws, Shares issued in assumption of, or in substitution for, any outstanding awards of any entity acquired in any form of combination by the Company or an Affiliate shall not be counted against Shares available for grant pursuant to this Plan.  Additionally, to the extent permitted by Applicable Laws, in the event that a company acquired by (or combined with) the Company or an Affiliate has shares available under a pre-existing plan approved by its shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the shareholders of the entities party to such acquisition or combination) may, at the discretion of the Committee, be used for Awards under the Plan in lieu of awards under the applicable pre-existing plan of the other company and 

shall not reduce the Shares authorized for grant under the Plan; provided that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan absent the acquisition or combination, and shall only be made to individuals who were not employees or directors of the Company or any Affiliate in existence prior to such acquisition or combination by the Company or an Affiliate.  The payment of Dividend Equivalent Rights in cash in conjunction with any outstanding Awards shall not be counted against the Shares available for issuance under the Plan.
4.2    Shares Distributed.  Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury Shares or Shares purchased on the open market, subject to Section 4.1(b)(ii) hereof.
4.3    Limitation on Number of Shares Subject to Awards. Notwithstanding any provision in the Plan to the contrary, and subject to Article 13, the maximum number of Shares subject to all Awards that may be granted to any one Participant during any calendar year shall be 1,500,000 Shares.
4.4    Non-Employee Director Award Limit. Notwithstanding any provision to the contrary in the Plan or in any policy of the Company regarding compensation payable to a Non-Employee Director, the sum of the grant date fair value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of all Awards payable in Common Stock to an individual as compensation for services as a Non-Employee Director, together with cash compensation earned by the Non-Employee Director during any calendar year, shall not exceed $800,000 in any calendar year.
ARTICLE 5.        ELIGIBILITY AND PARTICIPATION
5.1    Eligibility.  Each Eligible Individual shall be eligible to be granted one or more Awards pursuant to the Plan.  An Eligible Individual who is subject to taxation in the U.S. and who is providing Services to an Affiliate may be granted Options or SARs under this Plan only if the Affiliate qualifies as an “eligible issuer of service recipient stock” within the meaning of the U.S. Department of Treasury regulations promulgated under Section 409A of the Code. 
5.2    Participation.  Subject to the provisions of the Plan, the Committee, from time to time, may select from among all Eligible Individuals those to whom Awards shall be granted, and shall determine the nature and amount of each Award.  No Eligible Individual shall have any right to be granted an Award pursuant to this Plan and the grant of an Award to an Eligible Individual shall not imply any entitlement to receive future Awards.
ARTICLE 6.        STOCK OPTIONS
6.1    General.  The Committee is authorized to grant Options to Eligible Individuals on the following terms and conditions, and the Committee may specify such additional terms and conditions as:
(a)    Exercise Price.  The exercise price per Share subject to an Option shall be determined by the Committee and set forth in the Award Agreement; provided that, subject to Section 6.2(c) hereof, the per-Share exercise price for any Option shall not be less than 100% of the Fair Market Value of a Share on the date of grant.
(b)    Time and Conditions of Exercise.  The Committee shall determine the time or times at which an Option may be exercised in whole or in part; provided that the term of any Option granted under the Plan shall not exceed ten (10) years.  Subject to Section 12.3, the Committee also shall specify the vesting conditions, if any, as it deems appropriate that must be satisfied before all or part of an Option may be exercised.  The vesting conditions, if any, may be based on, among other conditions, a Participant’s continued Service, the attainment of performance conditions, or a combination of both.  
(c)    Payment.  The Committee shall determine the methods by which the exercise price of an Option may be paid, including the following methods: (i) cash or check; (ii) surrender of Shares or delivery of a properly executed form of attestation of ownership of Shares as the Committee may require (including withholding of Shares otherwise deliverable upon exercise of the Option) which have a Fair Market Value on the date or surrender of attestation equal to the aggregate exercise price of the Shares as to which the Option is to be exercised; (iii) promissory note from a Participant to the Company or a third-party loan guaranteed by the Company (in either case, with such loan bearing interest at no less than such rate as shall then preclude the imputation of interest under the Code); (iv) through the delivery of a notice that the Participant has placed a market sell order with a broker with respect to Shares then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient 

portion of the net proceeds of the sale to the Company in satisfaction of the Option exercise price, provided that payment of such proceeds is then made to the Company upon settlement of such sale; (v) by a “net exercise” arrangement pursuant to which the number of Shares issuable upon exercise of the Option shall be reduced by the largest whole number of Shares having an aggregate fair market value that does not exceed the aggregate exercise price (plus withholding taxes, if applicable) and any remaining balance of the aggregate exercise price (and/or applicable withholding taxes) not satisfied by such reduction in the number of whole Shares to be issued shall be paid by Participant in cash or other form of payment approved by the Committee; (vi) other property acceptable to the Committee; or (vii) any combination of the foregoing methods of payment.  The Award Agreement will specify the methods of paying the exercise price available to each Participant.  The Committee also shall determine the methods by which Shares shall be delivered or deemed to be delivered to Participants.  Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an Option, or continue any extension of credit with respect to the exercise price of an Option, with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.  
(d)    Exercise of Option.
(i)    Procedure for Exercise; Rights as a Shareholder.  An Option may not be exercised for a fraction of a Share.  An Option shall be deemed exercised when the Company receives: (A) a notice of exercise (in such form as the Committee may specify from time to time) from the person entitled to exercise the Option, and (B) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes).  Full payment may consist of any consideration and method of payment authorized by the Committee and permitted by the Award Agreement and the Plan.  Shares issued upon exercise of an Option shall be issued in the name of the Participant.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no dividends or Dividend Equivalent Right shall be paid, and no right to vote or receive dividends or Dividend Equivalent Rights or any other rights as a shareholder shall exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13.1 of the Plan.
(ii)    Termination of Participant’s Service.  If a Participant ceases to provide Service, including as a result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement).  Unless otherwise provided by the Committee, if on the date of termination of Service the Participant is not vested as to his or her entire Option, the unvested portion of the Option shall be forfeited and the Shares covered by the unvested portion of the Option shall revert to the Plan.  If, after termination of Service, the Participant does not exercise his or her Option within the time specified by the Committee, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.  To the extent the Option is exercisable following a Participant’s death, the Option may be exercised by such persons as may be specified in the Award Agreement, which may include any of the following: (i) the Participant’s designated beneficiary, provided that such designation is permitted under Applicable Laws and that such beneficiary has been designated before the Participant’s death in a form acceptable to the Company; (ii) the Participant’s legal representative or representatives; (iii) the person or persons entitled to do so pursuant to the Participant’s last will and testament; or (iv) if the Participant fails to make testamentary disposition of the Option or dies intestate, by the person or persons entitled to receive the Option pursuant to the applicable laws of descent and distribution.
6.2    Incentive Stock Options.  Incentive Stock Options shall be granted only to Employees of the Company or any “subsidiary corporation,” as defined in Section 424(f) of the Code and any applicable U.S. Department of Treasury regulations promulgated thereunder, of the Company, and the terms of any Incentive Stock Options granted pursuant to the Plan, in addition to the requirements of Section 6.1 hereof, must comply with the provisions of this Section 6.2.
(a)    Expiration.  Subject to Section 6.2(c) hereof, an Incentive Stock Option shall expire and may not be exercised to any extent by anyone after the first to occur of the following events:

(i)    Ten (10) years from the date of grant, unless an earlier time is set in the Award Agreement;
(ii)    Three (3) months after the date of the Participant’s termination of Service on account of any reason other than death or Disability (within the meaning of Section 22(e)(3) of the Code); and
(iii)    One (1) year after the date of the Participant’s termination of Service on account of death or Disability (within the meaning of Section 22(e)(3) of the Code).  
(b)    Dollar Limitation.  The aggregate Fair Market Value (determined as of the time the Option is granted) of all Shares with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed US$100,000 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision.  To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.
(c)    Ten Percent Owners.  An Incentive Stock Option shall be granted to any individual who, at the date of grant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of Shares of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on the date of grant and the Option is exercisable for no more than five (5) years from the date of grant.
(d)    Notice of Disposition.  The Participant shall give the Company prompt notice of any disposition of Shares acquired by exercise of an Incentive Stock Option within (i) two (2) years from the date of grant of such Incentive Stock Option or (ii) one (1) year after the transfer of such Shares to the Participant.
(e)    Right to Exercise.  During a Participant’s lifetime, only the Participant may exercise an Incentive Stock Option.
(f)    Failure to Meet Requirements.  Any Option (or portion thereof) purported to be an Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the Code shall be considered a Non-Qualified Stock Option.
ARTICLE 7.          RESTRICTED STOCK UNITS
7.1    Restricted Stock Units.  The Committee is authorized to grant Restricted Stock Units to Eligible Individuals in such amounts and subject to such terms and conditions not inconsistent with the Plan as the Committee shall impose. 
7.2    Vesting Conditions.  Subject to Section 12.3, the Committee shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting, if any, as it deems appropriate.  The vesting conditions, if any, may be based on among other conditions, a Participant’s continued Service, the attainment of performance conditions, or a combination of both.  
7.3    Form and Timing of Payment.  The Committee shall specify the settlement date applicable to each grant of Restricted Stock Units, which date shall not be earlier than the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, or such settlement date may be deferred to any later date, subject to compliance with Section 409A of the Code, as applicable.  On the settlement date, the Company shall, subject to Section 12.6(a) hereof and satisfaction of applicable Tax-Related Items (as further set forth in Section 16.3 hereof), transfer to the Participant one Share for each Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited.  Alternatively, settlement of a Restricted Stock Unit may be made in cash (in an amount reflecting the Fair Market Value of the Shares that otherwise would have been issued) or any combination of cash and Shares, as determined by the Committee, in its sole discretion, in either case, less applicable Tax-Related Items (as further set forth in Section 16.3 hereof).  Until a Restricted Stock Unit is settled, the number of Restricted Stock Units shall be subject to adjustment pursuant to Article 13 hereof.  
7.4    Forfeiture.  Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, any Restricted Stock Units that are not vested as of the date of the Participant’s termination of Service shall be forfeited.

7.5    General Creditors.  A Participant who has been granted Restricted Stock Units shall have no rights other than those of a general creditor of the Company.  Restricted Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement evidencing the grant of the Restricted Stock Units.
ARTICLE 8.        RESTRICTED STOCK AWARDS
8.1    Grant of Restricted Stock.  The Committee is authorized to grant Restricted Stock to Eligible Individuals selected by the Committee in such amounts and subject to such terms and conditions not inconsistent with the Plan as the Committee shall impose.  
8.2    Purchase Price.  At the time of the grant of Restricted Stock, the Committee shall determine the price, if any, to be paid by the Participant for each Share subject to the Award.  The purchase price of Shares acquired pursuant to the Award shall be paid either: (i) in cash at the time of purchase; (ii) at the sole discretion of the Committee, by Service rendered or to be rendered to the Company or an Affiliate; or (iii) in any other form of legal consideration that may be acceptable to the Committee in its sole discretion and in compliance with Applicable Laws.
8.3    Issuance and Restrictions.  Subject to Section 12.3 hereof, Restricted Stock shall be subject to such restrictions, if any, on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock).  The restrictions, if any, may be based on, among other conditions, a Participant’s continued Service, the attainment of performance conditions, or a combination of both.  These restrictions, if any, may lapse separately or in combination at such times, pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.  
8.4    Dividends.  Any dividends that are distributed with respect to Shares of Restricted Stock shall be paid in accordance with the applicable Award Agreement, subject to the provisions of Section 12.4(b).
8.5    Forfeiture.  Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of Service during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited.  
8.6    Certificates for Restricted Stock.  Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Committee shall determine.  If certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.
ARTICLE 9.        STOCK APPRECIATION RIGHTS
9.1    Grant of Stock Appreciation Rights.  The Committee is authorized to grant SARs to Eligible Individuals on the following terms and conditions, and the Committee may specify such additional terms and conditions as: 
(a)    Exercise Price.  The exercise price per Share subject to a SAR shall be determined by the Committee and set forth in the Award Agreement; provided that the exercise price per Share for any SAR shall not be less than 100% of the Fair Market Value of a Share on the date of grant.  
(b)    Time and Conditions of Exercise.  The Committee shall determine the time or times at which a SAR may be exercised in whole or in part; provided that the term of any SAR granted under the Plan shall not exceed ten (10) years.  Subject to Section 12.3, the Committee also shall specify the vesting conditions, if any, as it deems appropriate that must be satisfied before all or part of a SAR may be exercised.  The vesting conditions, if any, may be based on, among other conditions, a Participant’s continued Service, the attainment of performance conditions, or a combination of both.  
(c)    A SAR may not be exercised for a fraction of a Share.  A SAR shall be deemed exercised when the Company receives a notice of exercise (in such form as the Committee may specify from time to time) from the person entitled to exercise the SAR.  

9.2    Tandem Stock Appreciation Rights.  A SAR may be granted in connection with an Option, either at the time of grant or at any time thereafter during the term of the Option. A SAR granted in connection with an Option will entitle the holder, upon exercise, to surrender the Option or any portion thereof to the extent unexercised, with respect to the number of Shares as to which such SAR is exercised, and to receive payment of an amount computed as described in Section 9.3. The Option shall, to the extent and when surrendered, cease to be exercisable. A SAR granted in connection with an Option hereunder will have an exercise price per share equal to the per share exercise price of the Option, will be exercisable at such time or times, and only to the extent, that the related Option is exercisable, and will expire no later than the related Option expires. If a related Option is exercised in whole or in part, then the SAR related to the Shares purchased terminates as of the date of such exercise.
9.3    Payment and Limitations on Exercise.
(a)    A SAR shall entitle the Participant (or other person entitled to exercise the SAR pursuant to the Plan) to exercise all or a specified portion of the SAR (to the extent then exercisable pursuant to its terms) and to receive from the Company an amount equal to the excess of the aggregate Fair Market Value of the Shares on the date the SAR is exercised over the aggregate exercise price of the SAR, less applicable Tax-Related Items (as further set forth in Section 16.3 hereof), subject to any limitations the Committee may impose.
(b)    Payment of the amounts determined under Section 9.3(a) hereof shall be in cash, in Shares (based on the Fair Market Value of the Shares as of the date the SAR is exercised) or a combination of both, as determined by the Committee in the Award Agreement.  To the extent Shares are issued upon exercise of a SAR, the Shares shall be issued in the name of the Participant.  Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no dividends or Dividend Equivalent Right shall be paid, and no right to vote or receive dividends or Dividend Equivalent Rights or any other rights as a shareholder shall exist with respect to the Shares subject to a SAR, notwithstanding the exercise of the SAR.  The Company shall issue (or cause to be issued) such Shares promptly after the SAR is exercised.  No adjustment shall be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13.1 of the Plan.  The provisions of Section 6.1(d)(ii) regarding the treatment of a termination of the Participant’s Service shall also apply to SARs.
ARTICLE 10.        OTHER SHARE-BASED AWARDS
10.1    Grants of Other Share-Based Awards.  Subject to limitation under Applicable Laws, the Committee is authorized under the Plan to grant Awards (other than Options, Restricted Stock Units, Restricted Stock and SARs) to Eligible Individuals subject to the terms and conditions set forth in this Article 10 and such other terms and conditions as may be specified by the Committee that are not inconsistent with the provisions of the Plan and that, by their terms, involve or might involve the issuance of, consist of, or are denominated in, payable in, valued in whole or in part by reference to, or otherwise relate to, Shares.  The Committee may also grant Shares as a bonus, or may grant other Awards in lieu of obligations of the Company or an Affiliate to pay cash or other property under the Plan or other plans or compensatory arrangements.  The terms and conditions applicable to such other Awards shall be determined from time to time by the Committee and set forth in an applicable Award Agreement. The Committee may establish one or more separate programs under the Plan for the purpose of issuing particular forms of Awards to one or more classes of Participants on such terms and conditions as determined by the Committee from time to time.  
10.2    Exercise Price.  The Committee may establish the exercise price, if any, of any Other Share-Based Award granted pursuant to this Article 10; provided that such exercise price shall not be less than the Fair Market Value of a Share on the date of grant for an Award that is intended to be exempt from Section 409A of the Code.
10.3    Form of Payment.  Payments with respect to any Awards granted under Section 10.1 shall be made in cash or cash equivalent, in Shares or any combination of the foregoing, as determined by the Committee. 
10.4    Vesting Conditions.  Subject to Section 12.3, the Committee shall specify the date or dates on which the Awards granted pursuant to this Article 10 shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate.  The vesting conditions may be based on, among other vesting conditions, a Participant’s continued Service, the attainment of performance conditions, or a combination of both.
10.5    Term.  Except as otherwise provided herein, the Committee shall set, in its discretion, the term of any Award granted pursuant to this Article 10; provided that the term of any Award granted pursuant to this Article 10 shall not exceed ten (10) years. 

ARTICLE 11.        PERFORMANCE-BASED AWARDS
11.1    Purpose.  If the Committee, in its discretion, decides to grant a Performance-Based Award to an Eligible Individual, the provisions of this Article 11 shall control over any contrary provision contained in Articles 6 through 10; provided that the Committee may in its discretion grant Awards to Eligible Individuals that are based on Performance Criteria or other performance conditions but that do not satisfy the requirements of this Article 11.  
11.2    Applicability.  This Article 11 shall apply only to those Eligible Individuals selected by the Committee to receive Performance-Based Awards.  The designation of an Eligible Individual as a Participant for a Performance Period shall not entitle the Participant, in any manner, to receive an Award for the period.  Moreover, the designation of an Eligible Individual as a Participant for a particular Performance Period shall not require designation of such Eligible Individual as a Participant in any subsequent Performance Period and designation of one Eligible Individual as a Participant shall not require designation of any other Eligible Individuals as a Participant in such period or in any other Performance Period. 
11.3    Procedures with Respect to Performance-Based Awards.  With respect to any Performance-Based Awards, which may be granted to one or more Eligible Individuals, within the first twenty-five percent (25%) of the Performance Period in question or period of Service, the Committee, in writing (a) shall designate one or more Eligible Individuals as eligible for an Award, (b) shall designate the Performance Period over which the Performance Goals shall be measured; (c) shall select the Performance Criteria applicable to the Performance Period, (d) shall establish the Performance Goals, and amounts of such Awards, as applicable, which may be earned for such Performance Period, and (e) shall specify the relationship between Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be earned by each Eligible Individuals for such Performance Period.  Following the completion of each Performance Period, the Committee shall certify in writing whether the applicable Performance Goals have been achieved for such Performance Period.  In determining the amount earned by an Eligible Individual, the Committee shall have the right to adjust or eliminate the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Period. 
11.4    Payment of Performance-Based Awards.  Unless otherwise provided in the applicable Award Agreement, a Participant must be providing Service on the day a Performance-Based Award for the appropriate Performance Period is paid to the Participant.  Furthermore, unless otherwise provided in the applicable Award Agreement, a Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Period only if the Performance Goals for such period are achieved.  
ARTICLE 12.    PROVISIONS APPLICABLE TO AWARDS
12.1    Stand-Alone and Tandem Awards.  Awards granted pursuant to the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.
12.2    Award Agreement.  Awards under the Plan shall be evidenced by Award Agreements that set forth the terms, conditions and limitations for each Award, not inconsistent with the Plan, which may include, without limitation, the term of an Award, the provisions applicable in the event the Participant’s Service terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an Award.
12.3    Minimum Vesting Requirements.  Notwithstanding any other provision of the Plan, except in connection with Awards granted in connection with assumption or substitution of awards as part of a transaction as contemplated under Section 4.1(c) or Awards that may be settled only in cash, no portion of an Award granted on or after the Effective Date may vest before the first anniversary of the date of grant, subject to accelerated vesting as contemplated under Section 3.3(j) and ARTICLE 13; provided, however, that the Company may grant Awards with respect to up to five percent (5%) of the number of Shares reserved under Section 4.1 as of the Effective Date without regard to the minimum vesting period set forth in this Section 12.3.
12.4    Dividends and Dividend Equivalent Rights.  
(a)    Any Participant selected by the Committee may be granted Dividend Equivalent Rights based on the dividends declared on the Shares that are subject to any Restricted Stock Unit or an Other Share-

Based Award that is a Full Value Award, to be credited as of dividend payment dates, during the period between the date the Award is granted and the date the Award vests or is settled, as determined by the Committee and set forth in the applicable Award Agreement.  Such Dividend Equivalent Rights shall be converted to cash or additional Shares by such formula and at such time and subject to such limitations as may be determined by the Committee.
(b)    To the extent Shares subject to an Award (other than Restricted Stock) are subject to vesting conditions, any Dividend Equivalent Rights relating to such Shares shall either (i) not be paid or credited or (ii) be accumulated and subject to restrictions and risk of forfeiture to the same extent as the underlying Award with respect to which such cash, stock or other property has been distributed.  For Shares of Restricted Stock that are subject to vesting, dividends shall be accumulated and subject to any restrictions and risk of forfeiture to which the underlying Restricted Stock is subject.
12.5    Limits on Transfer.  No right or interest of a Participant in any Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Company or an Affiliate.  Except as otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwise disposed of by a Participant other than by will or the laws of descent and distribution.  
12.6    Stock Certificates; Book Entry Procedures.  
(a)    Notwithstanding anything herein to the contrary, the Company shall not be required to issue or deliver any certificates evidencing Shares pursuant to the exercise or vesting, as applicable, of any Award, unless and until the Board has determined, with advice of counsel, that the issuance and delivery of such certificates is in compliance with all Applicable Laws, regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded.  All certificates evidencing Shares delivered pursuant to the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal, state, or local securities or other laws, including laws of jurisdictions outside of the U.S., rules and regulations and the rules of any national securities exchange or automated quotation system on which the Shares are listed, quoted, or traded.  The Committee may place legends on any certificate evidencing Shares to reference restrictions applicable to the Shares.  In addition to the terms and conditions provided herein, the Board may require that a Participant make such reasonable covenants, agreements, and representations as the Board, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements. The Committee shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement or exercise of any Award, including, without limitation, a window-period limitation, as may be imposed in the discretion of the Committee.
(b)    Notwithstanding any other provision of the Plan, unless otherwise determined by the Committee or required by any Applicable Laws, rule or regulation, the Company shall not deliver to any Participant certificates evidencing Shares issued in connection with any Award and instead such Shares shall be recorded in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).
12.7    Paperless Administration.  In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website, intranet or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.
ARTICLE 13.         CHANGES IN CAPITAL STRUCTURE
13.1    Adjustments.  
(a)    In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to shareholders, or any other similar event or other change related to a corporate event affecting the Shares or the price of the Shares other than an Equity Restructuring, the Committee shall make such adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and kind of shares that may be issued under the Plan (including, without limitation, adjustments of the limitations in Sections 4.1 and 4.3 hereof); (b) the terms and conditions of any outstanding Awards (including, without limitation, the number and kind of shares that may be issued, or any applicable performance goals or criteria with respect thereto); and (c) the grant or exercise price per Share for any outstanding Awards under the Plan.  

(b)    In the event of any transaction or event described in Section 13.1(a) hereof or any unusual or infrequently occurring items or nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the financial statements of the Company or any affiliate, or of changes in Applicable Laws, regulations or accounting principles, the Committee, in its sole and absolute discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Committee determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:  
(i)    to provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 13.1 the Committee determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Committee in its sole discretion;
(ii)    to provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; 
(iii)    to make adjustments in the number and type of Shares (or other securities or property) subject to outstanding Awards, and/or in the terms and conditions of (including the grant or exercise price), and the criteria included in, outstanding options, rights and awards;  
(iv)    to provide that such Award shall be exercisable or payable or fully vested with respect to all Shares covered thereby, notwithstanding anything to the contrary in the Plan or the applicable Award Agreement; and
(v)    to provide that the Award cannot vest, be exercised or become payable after such event.  
(c)    In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 13.1(a) and 13.1(b) hereof:  
(i)    the number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted.  The adjustments provided under this Section 13.1(c)(i) shall be final and binding on the affected Participant and the Company.
(ii)    the Committee shall make such equitable adjustments, if any, as the Committee in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, without limitation, adjustments of the limitations in Sections 4.1 and 4.3 hereof).
13.2    Change in Control.  
(a)    Notwithstanding Section 13.1 hereof, and provided that any applicable Award Agreement does not expressly preclude the following from applying, if a Change in Control occurs and Awards that vest solely on the Participant’s continued Service are not converted, assumed, substituted or replaced by a successor or survivor corporation, or a parent or subsidiary thereof, then immediately prior to the Change in Control such Awards shall become fully exercisable and all forfeiture restrictions on such Awards shall lapse and, immediately following the consummation of such Change in Control, all such Awards shall terminate and cease to be outstanding.  
(b)    Notwithstanding Section 13.1 hereof, Awards that vest based on the attainment of performance-based conditions shall be subject to the provisions of the Award Agreement governing the impact of a Change in Control, provided that any such provisions in the Award Agreement shall (i) not permit the vesting of 

Awards at a rate that is greater than the actual level of attainment and/or (ii) provide for pro-rated vesting of the Award based on any reduction to the performance period resulting from the Change in Control.
(c)    Where Awards are assumed or continued after a Change in Control, the Committee may provide that the vesting of one or more Awards will automatically accelerate upon an involuntary termination of the Participant’s employment or service within a designated period following the effective date of such Change in Control.  Any such Award shall accordingly, upon an involuntary termination of the Participant’s employment or service in connection with a Change in Control, become fully exercisable and all forfeiture restrictions on such Award shall lapse.  
(d)    The portion of any Incentive Stock Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Stock Option only to the extent the applicable $100,000 limitation is not exceeded.  To the extent such U.S. dollar limitation is exceeded, the accelerated portion of such Option shall be exercisable as a Non-Statutory Option under the U.S. federal tax laws.
13.3    No Other Rights.  Except as expressly provided in the Plan, no Participant shall have any rights by reason of any subdivision or consolidation of Shares of any class, the payment of any dividend, any increase or decrease in the number of Shares of any class or any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.  Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no issuance by the Company of Shares of any class, or securities convertible into Shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of Shares subject to an Award or the grant or the exercise price of any Award.
ARTICLE 14.          EFFECTIVE AND EXPIRATION DATE
14.1    Plan Effective Date.  The Plan was approved by the Board on February 20, 2018 and shall become effective upon approval of the shareholders of the Company.
14.2    Expiration Date.  The Plan will continue in effect until it is terminated by the Board pursuant to Section 15.1 hereof, except that no Incentive Stock Options may be granted under the Plan after February 20, 2028. Any Awards that are outstanding on the date the Plan terminates shall remain in force according to the terms of the Plan and the applicable Award Agreement.
ARTICLE 15.          AMENDMENT, MODIFICATION, AND TERMINATION
15.1    Amendment, Modification, and Termination.  Subject to Section 16.14 hereof, with the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that to the extent necessary and desirable to comply with any Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required.  Notwithstanding any provision in this Plan to the contrary, absent approval of the shareholders of the Company, and except as permitted by Article 13, no Option or SAR may be amended to reduce the per-Share exercise price of the Shares subject to such Option or SAR below the per-Share exercise price as of the date the Option or SAR is granted and (a) no Option or SAR may be granted in exchange for, or in connection with, the cancellation, surrender or substitution of an Option or SAR having a higher per-Share exercise price and (b) no Option or SAR may be cancelled in exchange for, or in connection with, the payment of a cash amount or another Award at a time when the Option or SAR has a per-Share exercise price that is higher than the Fair Market Value of a Share.  
15.2    Awards Previously Granted.  Except with respect to amendments made or other actions taken pursuant to Section 16.14 hereof or any amendment or other action with respect to an outstanding Award that may be required or desirable to facilitate compliance with Applicable Laws, as determined by the Committee in its sole discretion, no termination, amendment, or modification of the Plan shall affect adversely, in any material way, any Award previously granted pursuant to the Plan without the prior written consent of the Participant; provided, however, that an amendment or modification that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be treated as adversely affecting the rights of the Participant. 

ARTICLE 16.          GENERAL PROVISIONS
16.1    No Rights to Awards.  No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is obligated to treat Eligible Individuals, Participants or any other persons uniformly.
16.2    No Shareholders Rights.  Except as otherwise provided herein, a Participant shall have none of the rights of a shareholder with respect to Shares covered by any Award, including the right to vote or receive dividends, until the Participant becomes the record owner of such Shares, notwithstanding the exercise of an Option or SAR or vesting of another Award.
16.3    Tax-Related Items.  The Company or any Affiliate, as applicable, shall have the authority to require a Participant to remit to the Company or an Affiliate, an amount sufficient to satisfy the withholding obligations for Tax-Related Items or to take such other action as may be necessary or appropriate in the opinion of the Company or an Affiliate, as applicable, to satisfy withholding obligations for Tax-Related Items, including one or a combination of the following: (a) withholding from the Participant’s wages or other cash compensation payable to the Participant by the Company or an Affiliate; (b) withholding from the proceeds of the sale of Shares acquired pursuant to an Award, either through a voluntary sale or a mandatory sale arranged by the Company on the Participant’s behalf, without need of further authorization; or (c) in the Committee’s sole discretion, by withholding Shares otherwise issuable under an Award (or allowing the return of Shares) sufficient, as determined by the Committee in its sole discretion, to satisfy such Tax-Related Items.  No Shares shall be delivered pursuant to an Award to any Participant or other person until the Participant or such other person has made arrangements acceptable to the Committee to satisfy the withholding obligations for Tax-Related Items.
16.4    No Right to Employment or Services.  Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service at any time, nor confer upon any Participant any right to continue in the Service of the Company or any Affiliate.
16.5    Unfunded Status of Awards.  The Plan is intended to be an “unfunded” plan for incentive compensation.  With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate.
16.6    Indemnification.  To the extent allowable pursuant to Applicable Laws, each member of the Committee and the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf.  The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
16.7    Relationship to other Benefits.  No payment pursuant to the Plan shall be taken into account in determining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance, termination programs and/or indemnities or severance payments, welfare or other benefit plan of the Company or any Affiliate, except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.
16.8    Expenses.  The expenses of administering the Plan shall be borne by the Company and/or its Affiliates.
16.9    Titles and Headings.  The titles and headings of the sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
16.10    Fractional Shares.  No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.

16.11    Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by Applicable Laws, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
16.12    Government and Other Regulations.  The obligation of the Company to make payment of awards in Shares or otherwise shall be subject to all Applicable Laws, and to such approvals by government agencies, including government agencies in jurisdictions outside of the U.S., in each case as may be required or as the Company deems necessary or advisable.  Without limiting the foregoing, the Company shall have no obligation to issue or deliver evidence of title for Shares subject to Awards granted hereunder prior to: (i) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable, and (ii) completion of any registration or other qualification with respect to the Shares under any Applicable Laws in the U.S. or in a jurisdiction outside of the U.S. or ruling of any governmental body that the Company determines to be necessary or advisable or at a time when any such registration or qualification is not current, has been suspended or otherwise has ceased to be effective.  The inability or impracticability of the Company to obtain or maintain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained and shall constitute circumstances in which the Committee may determine to amend or cancel Awards pertaining to such Shares, with or without consideration to the affected Participant.  The Company shall be under no obligation to register, pursuant to the Securities Act or otherwise, any offering of Shares issuable under the Plan.  If, in certain circumstances, the Shares paid pursuant to the Plan may be exempt from registration pursuant to the Securities Act, the Company may restrict the transfer of such Shares in such manner as it deems advisable to ensure the availability of any such exemption.
16.13    Governing Law.  The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Indiana.
16.14    Section 409A.  Except as provided in Section 16.15 hereof, to the extent that the Committee determines that any Award granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions required by Section 409A of the Code.  To the extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and U.S. Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.  Notwithstanding any provision of the Plan to the contrary, in the event that following the date an Award is granted the Committee determines that the Award may be subject to Section 409A of the Code and related U.S. Department of Treasury guidance (including such guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, including amendments or actions that would result in a reduction to the benefits payable under an Award, in each case, without the consent of the Participant, that the Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code and related U.S. Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section or mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Section 409A of the Code if compliance is not practical.
16.15    No Representations or Covenants with respect to Tax Qualification.  Although the Company may endeavor to (a) qualify an Award for favorable or specific tax treatment under the laws of the U.S. (e.g., Incentive Stock Options under Section 422 of the Code) or jurisdictions outside of the U.S. or (b) avoid adverse tax treatment (e.g., under Section 409A of the Code), the Company makes no representation to that effect and expressly disavows any covenant to maintain favorable or avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan, including Section 16.14 hereof. The Company shall be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants under the Plan.  Nothing in this Plan or in an Award Agreement shall provide a basis for any person to take any action against the Company or any Affiliate based on matters covered by Section 409A of the Code, including the tax treatment of any Awards, and neither the Company nor any Affiliate will have any liability under any circumstances to the Participant or any other party if the Award that is intended to be exempt from, or compliant with, Section 409A of the Code, is not so exempt or compliant or for any action taken by the Committee with respect thereto.

16.16    Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy adopted by the Company providing for the recovery of Awards, shares, proceeds, or payments to Participants in the event of fraud or as required by Applicable Laws or governance considerations or in other similar circumstances. 
16.17    Severability.  If any provision of the Plan or the application of any provision hereof to any person or circumstance is held to be invalid or unenforceable, the remainder of the Plan and the application of such provision to any other person or circumstance shall not be affected, and the provisions so held to be unenforceable shall be reformed to the extent (and only to the extent) necessary to make it enforceable and valid. 

  *  *  *  *Exhibit 10.1

 

 

 

 

ASSET PURCHASE AGREEMENT

 

BETWEEN

 

LIMONEIRA COMPANY

 

AND

 

OXNARD LEMON ASSOCIATES, LTD.

 

Dated as of July 24, 2018

 

 

 

 

     

     

    

 

TABLE OF CONTENTS

 

	ARTICLE I
	DEFINITIONS
	 	 	 
	1.1	Definitions	1
	 	 	 
	ARTICLE II
	PURCHASE AND SALE
	 	 	 
	2.1	Purchase and Sale	5
	 	 	 
	2.2	Excluded Assets	5
	 	 	 
	2.3	Purchase Price	5
	 	 	 
	2.4	Assumption of Liabilities	5
	 	 	 
	2.5	Liquidated Damage	6
	 	 	 
	2.6	Payment of the Purchase Price	6
	 	 	 
	2.7	Allocation of Purchase Price	6
	 	 	 
	2.8	Sale and Use Taxes	6
	 	 	 
	2.9	Independent Contract Consideration	6
	 	 	 
	ARTICLE III
	DUE DILIGENCE
	 	 	 
	3.1	Due Diligence Period	7
	 	 	 
	3.2	Due Diligence Materials	7
	 	 	 
	3.3	Phase 1 Examination	7
	 	 	 
	3.4	Approval of Preliminary Title Report	7
	 	 	 
	3.5	Buyer and Seller Termination Rights Prior Initial Closing Date	8
	 	 	 
	3.6	“AS-IS”	9
	 	 	 
	3.7	Termination of Agreement	9

 

     

     

    

 

	ARTICLE IV
	ESCROW/INITIAL CLOSING
	 	 	 
	4.1	Opening of Escrow	9
	 	 	 
	4.2	Statement of Satisfaction or Waiver of Conditions	9
	 	 	 
	4.3	Initial Closing	10
	 	 	 
	4.4	Title	10
	 	 	 
	ARTICLE V
	ANCILLARY TRANSACTIONS
	 	 	 
	5.1	Removal of Growers’ Fruit	10
	 	 	 
	5.2	Replacement of Roof	11
	 	 	 
	5.3	Sunkist Retirement Plan Withdrawal	11
	 	 	 
	5.4	Hard Assets Lease Back	12
	 	 	 
	5.5	Joint Press Release	13
	 	 	 
	ARTICLE VI
	EMPLOYMENT
	 	 	 
	6.1	Employment of Seller’s Employees	13
	 	 	 
	6.2	Employment of Amy Fukutomi	13
	 	 	 
	6.3	Employment of Tom Mayhew	14
	 	 	 
	ARTICLE VII
	REPRESENTATIONS AND COVENANTS OF SELLER
	 	 	 
	7.1	Power	14
	 	 	 
	7.2	Requisite Action	14
	 	 	 
	7.3	Authority	14
	 	 	 
	7.4	Income Tax Information	14
	 	 	 
	7.5	Encroachments	14

 

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	7.6	Governmental Notices	14
	 	 	 
	7.7	No Other Agreements	15
	 	 	 
	7.8	No Litigation	15
	 	 	 
	7.9	No Hazardous Materials	15
	 	 	 
	7.10	No Undisclosed Defects	15
	 	 	 
	7.11	No Unrecorded Interest	15
	 	 	 
	7.12	No Breach	15
	 	 	 
	7.13	Seller Delivery of Sunkist Letters	15
	 	 	 
	7.14	Labor Matters	16
	 	 	 
	7.15	“AS IS”	16
	 	 	 
	7.16	Survival	16
	 	 	 
	ARTICLE VIII
	REPRESENTATIONS AND COVENANTS OF BUYER
	 	 	 
	8.1	Power	16
	 	 	 
	8.2	Requisite Action	16
	 	 	 
	8.3	Authority	16
	 	 	 
	8.4	Insolvency	16
	 	 	 
	8.5	Survival	16
	 	 	 
	ARTICLE IX
	CONDITIONS TO INITIAL CLOSING
	 	 	 
	9.1	Seller's Conditions to Initial Closing	17
	 	 	 
	9.2	Buyer's Conditions to Initial Closing	17
	 	 	 
	ARTICLE X
	EFFECT OF A FAILURE OF A CONDITION
	 	 	 
	10.1	Effect of Failure	19

 

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	ARTICLE XI
	ESCROW INITIAL CLOSING OBLIGATIONS
	 	 	 
	11.1	Deliveries by Seller to Escrow Holder	19
	 	 	 
	11.2	Deliveries by Buyer to Escrow Holder	20
	 	 	 
	11.3	Disbursements and Other Actions by Escrow Holder	21
	 	 	 
	11.4	Post-Closing Instructions	22
	 	 	 
	ARTICLE XII
	ESCROW CANCELLATION
	 	 	 
	12.1	Escrow Cancellation Charges	23
	 	 	 
	12.2	Termination Rights of Buyer	23
	 	 	 
	12.3	Termination Rights of Seller	23
	 	 	 
	ARTICLE XIII
	COSTS AND PRORATIONS
	 	 	 
	13.1	Escrow and Other Costs	24
	 	 	 
	13.2	Real Property Taxes and Assessments	24
	 	 	 
	13.3	Supplemental Real Property Taxes	24
	 	 	 
	13.4	Documentary Transfer Taxes; Sales and Use Taxes	25
	 	 	 
	13.5	Broker's Commission	25
	 	 	 
	ARTICLE XIV
	CONDEMNATION PRIOR TO INITIAL CLOSING
	 	 	 
	14.1	Condemnation	25
	 	 	 
	ARTICLE XV
	FIRE OR OTHER CASUALTY PRIOR TO INITIAL CLOSING
	 	 	 
	15.1	Fire or Other Casualty Prior to Initial Closing	25

 

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	ARTICLE XVI
	CONDITIONS TO FINAL CLOSING
	 	 	 
	16.1	Seller's Conditions to Final Closing	26
	 	 	 
	16.2	Buyer's Conditions to Final Closing	26
	 	 	 
	ARTICLE XVII
	EFFECT OF FAILURE OF A CONDITION
	 	 	 
	17.1	Effect of Failure of a Condition	27
	 	 	 
	ARTICLE XVIII
	SELLER'S LIQUIDATED DAMAGES IF BUYER DEFAULTS
	 	 	 
	18.1	Seller's Liquidated Damages If Buyer Defaults	27
	 	 	 
	ARTICLE XIX
	FINAL CLOSING; FINAL CLOSING OBLIGATIONS
	 	 	 
	19.1	Close of Final Closing	28
	 	 	 
	19.2	Delivery by Seller to Buyer	28
	 	 	 
	19.3	Delivery by Buyer at Final Closing	28
	 	 	 
	19.4	Disbursements and Other Actions by Escrow Holder;	 
	 	Possession of Purchased Assets	29
	 	 	 
	19.5	Transaction Documents; Further Assurances	29
	 	 	 
	19.6	Buyer Assumption of Condition of Purchased Assets; Buyer Release	30
	 	 	 
	ARTICLE XX
	INDEMNIFICATION; CLAIMS
	 	 	 
	20.1	Indemnification by Seller	31
	 	 	 
	20.2	Indemnification by Buyer	32
	 	 	 
	20.3	Indemnification Periods; Liability Limitations	32
	 	 	 
	20.4	Successor Liability	33
	 	 	 
	20.5	Claims	33

 

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	20.6	Insurance	34
	 	 	 
	ARTICLE XXI
	GROWER RENTENTION
	 	 	 
	21.1	Grower Retention	34
	 	 	 
	XXII
	CONFIDENTIALITY
	 	 	 
	22.1	Confidentiality	35
	 	 	 
	 	 	 
	ARTICLE XXIII
	NOTICES
	 	 	 
	23.1	Notices	35
	 	 	 
	ARTICLE XXIV
	MISCELLANEOUS
	 	 	 
	24.1	Governing Law	36
	 	 	 
	24.2	Assignment	36
	 	 	 
	24.3	Waiver	37
	 	 	 
	24.4	No Benefit to Others	37
	 	 	 
	24.5	Signatories	37
	 	 	 
	24.6	Successors	37
	 	 	 
	24.7	Counterparts	37
	 	 	 
	24.8	Headings	37
	 	 	 
	24.9	Entire Agreement; Amendments	37
	 	 	 
	24.10	Severability	37
	 	 	 
	24.11	Construction	38
	 	 	 
	24.12	No Third-Party Beneficiaries	38

 

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	24.13	Attorneys' Fees	38
	 	 	 
	24.14	Disclosures	38
	 	 	 
	24.15	Time is of the Essence	38
	 	 	 
	ARTICLE XXV
	DULY APPROVED
	 	 	 
	25.1	Buyer and Seller Approval	38

 

    	 	7

     

    

 

ACCEPTANCE OF ESCROW HOLDER

 

Exhibits

 

	 	A.	Wrap Escrow Instructions of Chicago Title Company
	 	 	 
	 	B.	Grant Deed to the Property
	 	 	 
	 	C.	Lease of Hard Assets by Buyer to Seller
	 	 	 
	 	D.	Legal Description of the Property
	 	 	 
	 	E.	Sunkist License Termination Letter
	 	 	 
	 	F.	Bill of Sale and General Assignment
	 	 	 
	 	G.	Trademark/Trade Name Assignment
	 	 	 
	 	H	Joint Press Release
	 	 	 
	 	I	Sunkist Retirement Plan Withdrawal Letter

 

Schedules

 

	 	1.	List of Hard Assets of Seller
	 	 	 
	 	2.	List of Soft Assets of Seller
	 	 	 
	 	3.	List of Liabilities to Be Assumed by Buyer
	 	 	 
	 	4.	List of Excluded Assets
	 	 	 
	 	5.	Allocation of Purchase Price
	 	 	 
	 	6.	List of Casualty Policies
	 	 	 
	 	7.	List of UCC Liens

 

    	 	8

     

    

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT,
dated for reference purposes as of July 24, 2018 (“Agreement”) is entered into by and between LIMONEIRA COMPANY a Delaware
corporation ("Buyer") and OXNARD LEMON ASSOCIATES, LTD., a California limited partnership, ("Seller").

 

A.           Seller
is a licensed Sunkist (as hereinafter defined) packinghouse in the business of packing citrus fruit at the Property (as hereinafter
defined) exclusively for citrus growers, who are members of Sunkist, pursuant to grower contracts and delivering such citrus fruit
to customers of Sunkist (as hereinafter defined) pursuant to the Sunkist License Agreement (as hereinafter defined).

 

B.           Buyer
is also engaged in the business of packing citrus fruit from its own properties and citrus fruit of independent citrus growers.

 

C.           Buyer
desires to purchase the Hard Assets (as hereinafter defined) from Seller on the Initial Closing Date (as hereinafter defined) and
the Soft Assets (as hereinafter defined) on the Final Closing Date (as hereinafter defined) all upon the terms and conditions set
forth herein and Seller is willing to sell the Hard Assets and the Soft Assets to Buyer on such terms and conditions.

 

D.           Seller
desires to lease back from Buyer the Hard Assets (as hereinafter defined) on the terms and conditions set forth herein to enable
Seller to continue Seller’s Business for the Sunset Period (as hereinafter defined) thereby fulfilling Seller’s obligations
to Sunkist and Seller’s Growers (as hereinafter defined) pursuant to the Sunkist License Agreement (as hereinafter defined)
and Buyer is willing to lease back the Hard Assets to Seller on such terms and conditions.

 

E.           This
Agreement also constitutes instructions of Buyer and Seller to Chicago Title Company, Oxnard, California as Escrow Holder whose
general instructions are attached hereto as Exhibit A and incorporated herein.

 

NOW, THEREFORE, in consideration
of the premises, of the representations, warranties, covenants and agreement herein contained and of the mutual benefits to be
derived therefrom, the parties hereto, intending to be legally bound, do hereby covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.1           Definitions.
In addition to other terms defined in this Agreement as used herein the following word and phrases shall have the following meanings:

 

     

     

    

 

(a)          “Agreement
Execution Date”; “Execution Date”, The earliest date upon which this Agreement has been fully executed by
both the Seller and the Buyer.

 

(b)          “Casualty
Policies". The policies of casualty insurance maintained by Seller on the Hard Assets as of the Initial Closing Date as
set forth on Schedule 6 attached hereto.

 

(c)          "Due
Diligence Period". The period for Buyer’s comprehensive examination of the physical and legal aspects of the Purchased
Assets and Seller’s Business which ended at 5pm PDT on the fifth (5) business day prior to the Agreement Execution Date,
as provided in Section 3.1, hereof,

 

(d)          "Environmental
Laws". Means any and all present federal, state and local laws, (whether under common law, statute, rule, regulation or
otherwise), permits, and other requirements of governmental authorities relating to the environment or to any Hazardous Substance
(including, without limitation, (i) the Toxic Substances Control Act, 15 U.S.C., Section 2601 et seq., (ii) the Clean Water Act,
33 U.S.C., et seq., (iii) the Resource and Conversation and Recovery Act, 42 U.S.C., Section 6901 et seq., (iv) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C., Section 9601 et seq., (v) the Hazardous Materials Transportation
Act, 49 U.S.C., Section 1801 et seq., (vi) the California Hazardous Waste Control Act, Health and Safety Code, Section 25100 et
seq., (vii) the California Hazardous Substance Account Act, Health and Safety Code, Section 25249.5 et seq., (viii) the California
Waste Management Act, Health and Safety Code, Section 25170.1 et seq., (ix) Health and Safety Code, Section 2550, Hazardous Materials
Release Response Plans and Inventory, or (x) the California Porter-Cologne Water Quality Control Act, Water Code, Section 13000
et seq., all as amended.

 

(e)          "Escrow".
The escrow to be opened by Seller and Buyer with Escrow Holder for the purchase and sale of the Purchased Assets.

 

(f)          "Escrow
Charges". All fees, charges, recording fees and expenses charged or incurred by Escrow Holder as well as all charges related
to the services of the Title Company in connection with all title matters relating to this Escrow.

 

(g)          "Escrow
Holder". Chicago Title Company, Oxnard, California; Lisa Rowlands; Office: 805-477-5227; Email: lisa.rowlands@ctt.com

 

(h)          "Escrow
Withdrawal Liability Hold Back". The sum of $5,419,087 representing an estimate of Seller’s withdrawal liability
from the Sunkist Retirement Plan as of July 2, 2017.

 

(i)          "Excluded
Assets". Those assets not being sold to Buyer by Seller which are either (i) owned by Seller or (ii) not owned by Seller
as provided in Section 2.2, hereof and set forth on Schedule 4, attached hereto.

 

    	 	 	2

     

    

 

(j)          "Final
Closing". The closing of the purchase and sale of the Soft Assets on the Final Closing Date.

 

(k)          "Final
Closing Date". October 31, 2018 or such earlier date as the Sunkist License Agreement terminates.

 

(l)          “Fruit
Growers Supply”. A cooperative which supplies packing and shipping materials to its members, including Seller.

 

(m)          "Grant
Deed". The grant deed in the form of that attached as Exhibit B hereto conveying the Property to Buyer.

 

(n)           "Hard
Assets". The Property and all of the Tangible Personal Property owned by Seller other than the Excluded Assets, as set
forth on Schedule I, attached hereto.

 

(o)          "Hard
Asset Purchase Price". The sum of Twenty Four Million Seven Hundred Fifty Thousand Dollars ($24,750,000) to be paid through
Escrow by Buyer to Seller for the Hard Assets on the Initial Closing Date.

 

(p)          "Hazardous
Material". (i) Any chemical, compound, material, mixture or substance that is now defined or listed in, or otherwise classified
pursuant to, any Environmental Law as a "hazardous substance," "hazardous material," "hazardous waste,"
"extremely hazardous waste," "infectious waste," "toxic substance," "toxic pollutant,"
or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, or "BP toxicity" and (ii) petroleum, natural
gas, natural gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures of natural gas and such synthetic gas),
ash produced by a resource recovery facility utilizing a municipal solid waste stream, and drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude oil, natural gas, or geothermal resources.

 

(q)          “Improvements.”All
buildings, structures, fixtures, hardscape and landscape, fences, utility service pipes and connections and all other physical
improvements located on or under and permanently affixed to the Property.

 

(r)          
"Initial Closing". The closing of the purchase and sale of the Hard Assets to take place on the Initial Closing
Date.

 

(s)          “Initial
Closing Date”. The date, not more than four business days following the Agreement Execution Date and, in no event
whatsoever after July 27, 2018, on which Buyer purchases the Hard Assets from Seller and Seller and Buyer enter into a lease back
of the Hard Assets to Seller for the duration of the Sunset Period, as provided in Section 5.4 below.

 

(t)          Knowledge”.
As to Seller, the term “Knowledge” of a particular fact or other matter shall mean the actual Knowledge of Amy Fukutomi
and Tom Mayhew, as individuals, without any duty to investigate, that they individually possessed as of the Execution Date of this
Agreement and as of the Initial Closing Date.

 

    	 	 	3

     

    

 

(u)         "Lease".
The lease in the form of that attached hereto as Exhibit C hereof to be entered into by Seller and Buyer effective as of the Initial
Closing Date whereby Buyer leases the Hard Assets to Seller for the Sunset Period.

 

(v)         "Property".
The approximately 13.03 acres of land, together with all of the Improvements located at 2001 Sunkist Circle, Oxnard, California
93033 (“Property”), having an agreed value of Twenty Million Dollars, ($20,000,000), as legally described in Exhibit
D, hereto.

 

(w)        "Purchased
Assets". The Hard Assets and Soft Assets of Seller, other than the Excluded Assets.

 

(x)         "Purchase Price". The sum of Twenty Five Million Dollars ($25,000,000) to be paid by Buyer to Seller for the Purchased
Assets, consisting of the Hard Assets and the Soft Assets.

 

(y)          “Seller’s
Business”. The business owned and operated by Seller at the Property as described in Recital A, hereof.

 

(z)          “Soft
Assets". The Soft Assets are listed in Schedule 2, hereto and shall include all of Seller's trade names, trademarks, copyrights,
phone and fax numbers, websites, domain names and the "goodwill" of Seller's Business, other than the Excluded Assets.

 

(aa)         
"Soft Assets Purchase Price". The sum of Two Hundred Fifty Thousand Dollars ($250,000) to be paid by Buyer to
Seller through Escrow for the Soft Assets on the Final Closing Date.

 

(bb)         "Sunkist".
Sunkist Growers, Inc

 

(cc)         “Sunkist
License Agreement”. The Commercial Packing House License Agreement dated as of October 1, 2008 among Sunkist Growers,
Inc., Kaweah-Oxnard Fruit Exchange and Seller.

 

(dd)        “Sunkist
Retirement Plan”. The Sunkist Retirement Plan B (as amended and restated January 1, 2013

 

(ee)         “Sunset
Period”. The period between the Initial Closing Date and the Final Closing Date.

 

(ff)          “Sunkist
License Termination Letter”. A letter from Seller to Sunkist dated as of the Initial Closing Date, terminating Seller’s
license obligations under the Sunkist License Agreement effective as of October 31, 2018, in the form and content set forth in
Exhibit E, attached hereto.

 

    	 	 	4

     

    

 

(gg)         “Tangible
Personal Property”. All machinery, tools, vehicles and rolling stock, packing, storage and office equipment, furniture,
furnishings, and all other tangible personal property used by Seller in the conduct of Seller’s Business at the Property,
other than the Excluded Assets, having an agreed value of Four Million Seven Hundred Fifty Thousand Dollars ($4,750,000).

 

(hh)         “Title
Company”. Chicago Title Company, Oxnard, California.

 

ARTICLE II

 

PURCHASE AND SALE

 

2.1           Purchase
and Sale. Upon the terms and conditions set forth in this Agreement, Buyer agrees to purchase from Seller and Seller agrees
to sell to Buyer the Purchased Assets for the Purchase Price.

 

2.2           Excluded
Assets. The Excluded Assets shall include all cash, all receivables (including any from Fruit Growers Supply), inventory, prepaid
items, deposits and those additional items of tangible personal property listed on Schedule 4 attached hereto.

 

2.3           Purchase
Price. The total amount which Buyer shall pay for the Hard Assets and the Soft Assets shall be the Purchase Price defined in
Section 1.1(x), hereof.

 

2.4           Assumption
of Liabilities.

 

(a) Buyer shall not assume
or otherwise be liable for any liabilities of Seller, except those liabilities Seller and Buyer have mutually agreed upon as set
forth in Schedule 3, hereto (the “Assumed Liabilities”). Between the Initial Closing and the Final Closing, Buyer and
Seller shall use best efforts to obtain any necessary consents and complete the assignments to Buyer of the Assumed Liabilities.
Seller shall be solely responsible for the full and timely satisfaction of all of the Assumed Liabilities up to the Final Closing
Date and Seller covenants and agrees to indemnify, defend and hold harmless Buyer from and against any liability therefor prior
to the Final Closing Date. Buyer shall be solely responsible for the full and timely satisfaction of all of the Assumed Liabilities
after Final Closing Date and Buyer covenants and agrees to indemnify, defend and hold harmless Seller from and against any liability
therefor arising after the Final Closing Date.

 

(b) At the Initial Closing,
(I) the Property shall be unencumbered and not subject to any leases or liens by Seller from any third party except as to the Fruit
Growers Supply UCC lien and the Allied Packaging UCC liens listed on Schedule 7, hereto and any non-monetary liens and encumbrances
of record not disapproved by Buyer; and (ii) Seller shall use its best efforts to remove all monetary liens on the other the Hard
Assets (other than the Property) including, but not limited to, those UCC liens listed on Schedule 7, attached hereto. The Fruit
Growers Supply and the Allied Packaging UCC liens on the Property and all other UCC or other liens on the other Hard Assets shall
in all events be removed by Seller prior to the Final Closing.

 

    	 	 	5

     

    

 

2.5           Liquidated
Damages. In the event that Buyer fails to complete the purchase of the Hard Assets in breach of this Agreement, Buyer shall
promptly pay to Seller from Escrow the sum of Two Million Five Hundred Thousand Dollars ($2,500,000) as liquidated damages as provided
in Article XVIII hereof, and Buyer shall pay all costs of the Escrow.

 

2.6           Payment
of the Purchase Price. At least one business day prior to the Initial Closing Date, Buyer shall deposit, by wire transfer in
immediately available funds, the full amount of the Purchase Price, plus Buyer's share of the escrow and closing costs into Escrow.

 

2.7           Allocation
of Purchase Price. The Purchase Price for all of the Purchased Assets shall be allocated between the Hard Assets and the Soft
Assets as set forth in Schedule 5, attached hereto (the “Purchase Price Allocation”). Seller and Buyer acknowledge
that the Purchase Price Allocation set forth herein shall be subject to post-closing revisions based upon a third party appraisal
of the Hard Assets and the Soft Assets (the “Third Party Appraisal”), conducted by Buyer’s accountants and independent
appraisers, at Buyer’s sole cost and expense, which shall conform to generally accepted accounting principles and shall control
for all tax reporting purposes by Buyer and Seller. Buyer shall use best efforts to have the Third-Party Appraisal completed and
finalized on or before the Final Closing Date and shall promptly provide a copy of the Third Party Appraisal to Seller upon Buyer’s
receipt thereof.

 

2.8           Sales
and Use Taxes. All sales and use taxes and real and personal property transfer fees and taxes arising from the purchase and
sale of the Purchased Assets shall be borne by Buyer, including, but not limited to, the Documentary Transfer Tax in connection
with the purchase of the Property by Buyer. Buyer agrees to indemnify, defend and hold Seller harmless from all claims, demands,
administrative proceedings and legal actions with respect to sales and use taxes and real and personal property transfer fees and
taxes agreed to be paid by Buyer under the foregoing provisions and from all liability for such taxes and fees and interest and
penalties with respect thereto.

 

2.9           Independent
Contract Consideration. One Hundred Dollars ($100.00) of the Initial Deposit (the “Independent Contract Consideration”)
has been bargained for and agreed to be paid by Buyer as consideration for Buyer’s exclusive right to purchase the Purchased
Assets and for Seller’s execution and delivery of this Agreement. Notwithstanding anything to the contrary contained herein,
the Independent Contract Consideration is payable to Seller upon the opening of Escrow in addition to and independent of all other
consideration provided in this Agreement and is nonrefundable in all events but shall be credited against the Purchase Price in
connection with the Closing.

 

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ARTICLE III

 

DUE DILIGENCE

 

3.1           Due
Diligence Period. Buyer, at its sole cost and expense and without any right of reimbursement from Seller regardless of whether
Buyer completes the purchase of the Purchased Assets subject to the rights and remedies of Buyer upon a Seller default, has performed,
to Buyer’s complete satisfaction, all of the due diligence it deems appropriate and necessary with respect to the Purchased
Assets, including approval of the condition of title to the Property as set forth in Section 3.4, hereof and any Certificate of
Occupancy or other permits or authorizations allowing Seller to operate its fruit packing business at the Property.

 

3.2           Due
Diligence Materials. Seller has heretofore provided Buyer with the Phase 1 Report, defined in Section 3.3, hereof, and the
Title Documents, defined in Section 3.4, hereof and all other documents and information pertaining to the Purchased Assets requested
by Buyer exclusive of any and all confidential or proprietary documents or information owned by Sunkist (jointly the “Due
Diligence Materials”), all of which Buyer hereby approves. Buyer hereby (i) acknowledges that Buyer has received all documents
and information, of every kind and nature, and has had unfettered access to the Property as required by Buyer in order to complete
Buyer’s due diligence examination of the Purchased Assets, and (ii) approves the physical and legal condition of the Purchased
Assets, and (iii) waives all further due diligence hereunder, and (iv) acknowledges that Buyer’s due diligence examination
of the Purchased Assets is not a Buyer contingency to the Initial or Final Closings of the transactions contemplated by the parties
pursuant to this Agreement.

 

3.3           Phase
1 Examination. Buyer has been provided as part of Buyer's Due Diligence a Phase 1 engineering report for hazardous materials
on the Property prepared by Stantec Consulting Services, Inc, dated May 12, 2017 (the “Phase I Report”), the contents
of which are hereby accepted and approved by Buyer. Buyer hereby waives any Phase 2 examination of the Property (i.e. invasive
borings, testing's, etc.). Except as may be disclosed to Buyer in writing prior to the Initial Closing Date, Seller has no Knowledge
of the existence of any underground tanks on the Property or any buried trash, garbage, construction materials or other debris.

 

3.4           Approval
of Preliminary Title Report. Seller has provided to Buyer a current preliminary title report from the Title Company ("PTR"),
dated June 27, 2018 (the “Preliminary Report”), covering the Property together with copies of all documents referred
to therein and a map of the Property showing the location of all easements (the PTR, documents and map to be referred to collectively
as the "Title Documents"), the contents of which are hereby approved by Buyer. Buyer hereby objects to all liens evidencing
monetary encumbrances including, without limitation, deeds of trust, financing statements, tax liens, bonds and assessments, but
excluding nondelinquent real property taxes, bonds and assessments (collectively "Monetary Encumbrances"), and Seller
agrees to cause all such Monetary Encumbrances to be removed at Seller's sole cost on or before the Initial Closing Date. Except
as provided above, Buyer accepts the condition of title to the Property as shown in the PTR (the “Approved Title Conditions”).

 

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3.5           Buyer
and Seller Termination Right Prior Initial Closing Date.

 

(a)          
By Buyer: If during the period between the Execution Date and the Initial Closing Date, Buyer discovers a fact, situation
or occurrence unknown to Buyer on the Execution Date that, in Buyer's sole and absolute discretion, materially adversely affects
Buyer's ability to use all or a material portion of the Property or which materially interferes with Buyer's proposed operations
therein of a citrus packing warehouse (an “Unanticipated Event”), Buyer shall promptly notify Seller of such fact.
Buyer and Seller shall use mutual best efforts to attempt to rectify the Unanticipated Event to Buyer’s reasonable satisfaction
prior to the Initial Closing Date in which case, subject to the requirements of Section 3.5, hereof, this Agreement shall continue
in full force and effect. If Buyer and Seller shall be unable to rectify such Unanticipated Event prior to the Initial Closing
Date and provided neither Buyer nor Seller is in material breach of this Agreement, then Buyer shall have the right to terminate
this Agreement by written notice to Seller and Escrow in which case Escrow shall be cancelled and the provisions of Section 3.5(c),
hereof, shall apply.

 

(b)          By
Seller: Notwithstanding anything to the contrary herein contained, Buyer hereby acknowledges and agrees that, due to the absolute
deadline on Seller’s part to provide written notice to Sunkist on or before July 27, 2018, in the form of the Sunkist License
Termination Letter set forth in Exhibit E, attached hereto in order for Seller to effectively terminate the Sunkist License Agreement
as of October 31, 2018, it is a Seller Condition of Closing that the absolute last date upon which the Initial Closing may, under
any circumstances, occur is July 27, 2018 (the “Initial Closing Deadline”) and that if the Initial Closing shall fail,
for any reason other than Seller’s material breach of this Agreement, to occur prior to the Initial Closing Deadline, this
Agreement shall terminate and Escrow shall automatically and without the requirement of notice from either Buyer or Seller be cancelled
in which case the provisions of Section 3.5(c), hereof, shall apply.

 

(c)          
Upon the cancellation of Escrow pursuant to ether Section 3.5(a) or (b), (i) Buyer and Seller shall execute and deliver to Escrow
Holder cancellation instructions and all documents that are reasonably required by Escrow Holder and/or Buyer and Seller in order
to cancel the Escrow and release any interest of Buyer in and to the Purchased Assets, (ii) Seller and Buyer shall each pay fifty
percent (50%) of all Escrow Charges, (iii) Escrow Holder shall refund all funds deposited by Buyer into Escrow, together with all
interest earned thereon in Escrow, to Buyer, less Buyer's share of Escrow Charges, and Escrow Holder shall return all documents
and instruments to the parties who deposited the same into Escrow; and (iv) this Agreement shall terminate and neither party hereto
shall have any further obligation or responsibility hereunder or liability of any nature or amount whatsoever to the other party
hereunder.

 

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3.6           "AS
IS". Buyer acknowledges (i) that Buyer is purchasing the Purchased Assets AS IS, WHERE IS and WITH ALL FAULTS and (ii)
that, other than Seller's obligation to repair the roof pursuant to Section 5.2 hereof, Buyer is relying solely and exclusively
upon Buyer’s own Due Diligence investigation of all aspects of the Purchased Assets, and (iii) that Seller has made no express
or implied representations or warranties whatsoever as to the physical or legal condition of the Purchased Assets or their completeness
or appropriateness for Buyer’s intended use or purpose thereof as a citrus packing warehouse and (iv) that Buyer is completely
satisfied with all aspects of the Purchased Assets as of the Execution Date and as of the Initial Closing Date and the Final Closing
Date. Notwithstanding the foregoing, nothing contained herein shall relieve Seller from the good faith obligation to inform Buyer
if, prior to the Initial Closing Date, the existence of any material defect in the Purchased Assets or any situation or occurrence
that would materially prevent Buyer's use of the Property for Buyer’s intended purpose as a citrus packing warehouse comes
within Seller’s Knowledge.

 

3.7           If
this Agreement terminates for any reason whatsoever, other than as a result of Seller’s default, Buyer shall deliver to Seller
within five (5) days after any such termination, at no charge, copies of all surveys, engineering studies, soil reports, maps,
master plans, land use studies, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.

 

ARTICLE IV

 

ESCROW/INITIAL CLOSING

 

4.1           Opening
of Escrow.

 

(a) Within one (1) business
day after the Execution Date, Buyer and Seller shall open Escrow with Escrow Holder for the consummation of the purchase and sale
of the Property provided for herein by delivering three (3) copies of this Agreement signed by both Buyer and Seller to Escrow
Holder. Upon receipt of such items, Escrow Holder is hereby instructed to sign the last page of each copy of this Agreement, and
to deliver one (1) complete copy of this Agreement to Seller and one (1) complete copy of this Agreement to Buyer. This Agreement
signed by Seller and Buyer shall constitute instructions to Escrow Holder together with Escrow Holder's Escrow Acceptance and General
Provisions, attached hereto as Exhibit A, and the provisions of this Agreement including the provisions of Exhibit A shall control
as to the instructions to and the duties of Escrow Holder.

 

4.2           Statement
of Satisfaction or Waiver of Conditions. As a condition to both the Initial Closing and the Final Closing, Seller and Buyer
shall each deposit in Escrow on or before the Initial Closing Date and on or before the Final Closing Date, a Statement of Satisfaction
or Waiver of Conditions stating: (i) in the case of Seller, that all conditions to Seller’s performance and closing the sale
of the Hard Assets or Soft Assets, as the case may be, to Buyer, have been satisfied or waived, other than payment of the applicable
Purchase Price as provided in Sections 4.3 and 19.1, and (ii) in the case of Buyer, that all conditions to performance and closing
the purchase of the Hard Assets or Soft Assets, as the case may be, from Seller, including the approval thereof of Buyer’s
Board of Directors have been satisfied or waived, other than (1) conveyance of the applicable Purchased Assets to Buyer, (2) issuance
by the Title Company of the Title Policy as provided in Section 9.2(a) hereof, (3) the absence of a “Material Change”
as provided in Section 9.2(c), and (4) Seller’s delivery of the Sunkist License Termination Letter.

 

    	 	 	9

     

    

 

4.3           Initial
Closing. On the Initial Closing Date, Escrow shall close the Escrow by recording the Grant Deed in the form and content of
Exhibit B, attached hereto and the other documents required to be recorded in connection with this transaction and by disbursing
funds and distributing documents as provided in this Agreement. On the Initial Closing Date, (i) Seller will deliver the Sunkist
License Termination Letter, in the form and content of Exhibit E, attached hereto, to Sunkist and the Sunkist Retirement Plan Withdrawal
Letter, in the form and content of Exhibit I, attached hereto, to the Sunkist Retirement Plan; and (ii) Buyer will file a Form
8-K with the SEC disclosing the transactions provided for herein with this Agreement as an Exhibit thereto, and Buyer shall also
notify NASDAQ. Within one business day following the deliveries, filing and notification described in the previous sentence, Buyer
and Seller will issue the Joint Press Release in the form and content of Exhibit H, attached hereto, pursuant to Section 5.4, hereof.

 

4.4           Title.
Seller shall convey title to the Property to Buyer by the Grant Deed at the Initial Closing subject only to the Approved Title
Conditions and the Fruit Growers Supply UCC lien and the Allied Packaging liens listed in Schedule 7, hereto. From and after the
Execution Date, Seller shall take no action to encumber the Property with any lien, easement or other title matter without the
prior written consent of Buyer and shall not suffer any such encumbrance to be imposed on the Property by any third party.

 

4.5           Initial
Closing Final.         Buyer and Seller hereby acknowledge and agree that, except
in the event of a material breach by Seller of its obligations under this Agreement, upon the completion of the Initial Closing,
the purchase and sale of the Hard Assets (i) shall be and become, final and irreversible for all purposes, and (ii) shall not
be contingent upon or otherwise subject to the completion of the Final Closing and (iii) shall not subject to rescission or any
option or other right in Buyer to compel the repurchase thereof by Seller.

 

ARTICLE V

 

ANCILLARY TRANSACTIONS

 

5.1           Removal
of Growers' Fruit. Prior to the Final Closing, Seller shall use its best efforts to arrange for the removal, by sale or otherwise,
all of its growers' fruit from the Property; provided, however, that, in the event that all such fruit has not been removed from
the Property prior to the Final Closing, Buyer shall permit Seller and its growers, at no cost, access to the Property and, if
required, use of Buyer’s cold storage facilities and equipment on the Property without unreasonably interfering with or disrupting
Buyer’s operations, for a period of 60 days following the Final Closing to complete the removal of such fruit from the Property.
During such 60-day period, Seller shall bear all costs and expenses relating to the removal of such fruit but shall not be required
to pay rent or otherwise compensate Buyer in any way. Buyer shall have no right to or interest in such growers' fruit. During such
60-day period Seller shall maintain in effect the Worker's Compensation, Commercial General Liability and other policies of insurance
provided for in the Lease. Buyer shall have no responsibility with respect to or liability for the condition of any fruit remaining
on the Property following the Final Closing Date.

 

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5.2           Replacement
of Roof. As of the Execution Date, Seller may be in the process of replacing the roof on the buildings which are part of its
Hard Assets. Seller shall solely bear and pay the costs of such roof replacement and any related structural repairs provided, however,
that Buyer shall reimburse Seller through Escrow at the Final Closing (in addition to payment of the Soft Asset Purchase Price),
one half of the total roof replacement and related structural repair costs in excess of $2,000,000. If the roof replacement and
related structural repairs are not completed on or before the Initial Closing Date, Seller shall use its best efforts during the
Lease Term to compete work on the roof replacement by the Final Closing Date. If such work is not completed by the Final Closing
Date, Buyer shall undertake to have the work completed as soon thereafter as is reasonably possible, and Buyer and Seller shall
cooperate with one another in effecting the payment therefor on the basis set forth in this Section 5.2. Seller makes no representations
or warranties to Buyer, express or implied, as to the quality, sufficiency or workmanship of the roof and structural replacement
work. Seller agrees to use reasonable efforts, at no cost to Seller, to cause the roof warranty from the roofing and construction
contractors to be assigned to Buyer and Buyer agrees that, whether or not such warranty is transferred to Buyer, Seller shall have
no liability whatsoever of any kind or nature for such roof and structural replacement except for the payment of costs which are
properly the obligation of Seller hereunder.

 

5.3           Sunkist
Agreements.

 

(a)          Concurrently
with the Initial Closing, Seller will deliver formal notice (i) to Sunkist, in the form of the Sunkist License Termination Letter
set forth in Exhibit E, attached hereto, of Seller's termination of the Sunkist License Agreement, effective as of October 31,
2018 and (ii) to the Sunkist' Retirement Plan Board, in the form of the Sunkist Retirement Plan Withdrawal Letter set forth in
Exhibit I, attached hereto, of Seller's withdrawal from the Sunkist Retirement Plan, effective as of August 1, 2018.

 

(b)          Concurrently
with the Initial Closing, Escrow Holder shall establish a separate Escrow account in Seller’s name (“Seller’s
Withdrawal Liability Escrow Account”) and withhold from Seller's proceeds, the Escrow Withdrawal Liability Holdback amount
of Five Million Four Hundred Nineteen Thousand Eighty Seven Dollars ($5,419,087) and immediately deposit the entire Escrow Withdrawal
Liability Holdback into Seller’s Withdrawal Liability Escrow Account. All interest and/or other income earned on Seller’s
Withdrawal Liability Escrow Account shall belong to Seller and shall be held in said Seller’s Withdrawal Liability Escrow
Account for Seller’s sole benefit. Upon receipt by Escrow of written notice from the Sunkist Retirement Plan of the amount
of Seller's estimated withdrawal liability (the "2018 Estimated Withdrawal Liability"), Escrow Holder shall promptly
disburse directly to the Sunkist Retirement Plan from the Seller’s Withdrawal Liability Escrow Account, the lesser of (i)
the amount of the 2018 Estimated Withdrawal Liability or (ii) the then entire balance of Seller’s Withdrawal Liability Escrow
Account. Seller shall, concurrently with such payment by Escrow to the Sunkist Retirement Plan, either (1) promptly pay, directly
to the Sunkist Retirement Plan, any deficiency between the amount paid by Escrow and the amount of the 2018 Estimated Withdrawal
Liability; or (2) be entitled to the immediate disbursement by Escrow of the amount of the entire remaining balance of the Seller’s
Withdrawal Liability Escrow Account.

 

    	 	 	11

     

    

 

(c)          Promptly
following the determination of the final settlement amount of Seller's withdrawal liability from the Sunkist Retirement Plan (the
"Final Withdrawal Liability"), Seller shall pay, directly to the Sunkist Retirement Plan, any remaining amount owed to
fully fund the Final Withdrawal Liability. Seller shall, likewise, be entitled to the direct reimbursement from the Sunkist Retirement
Plan of any overpayment made to the Plan in excess of the Final Withdrawal Liability. Seller covenants and agrees to indemnify
Buyer from any and all liability for payment of Seller's withdrawal liability with respect to its withdrawal from the Sunkist Retirement
Plan. This covenant shall survive both the Initial Closing and the Final Closing and be subject to the indemnification limitations
set forth in Section 20.3, hereof.

 

(d)          Seller
shall use best efforts to obtain signed receipts for the Sunkist License Termination Letter and the Sunkist Retirement Plan Withdrawal
Letter upon Seller’s delivery thereof from Sunkist and the Sunkist Retirement Plan Board, respectively, (the “Sunkist
Receipts”) and Seller shall promptly deliver to the Buyer, copies of the Sunkist Receipts or facsimile delivery confirmations,
or, if unavailable, certifications of Seller’s delivery of the Sunkist Letters as required hereunder, executed by Seller.

 

5.4           Lease
Back.

 

(a)          Seller
shall lease back the Hard Assets from Buyer, on an exclusive basis, pursuant to the Lease executed and delivered by the parties
through Escrow at the Initial Closing in the form and content of Exhibit C, attached hereto. The period of the Lease shall be from
the Initial Closing through the Final Closing (the “Lease Term”). Rent, at the rate of $40,000 per month (the “Lease
Rent”) shall commence on August 1, 2018. No security deposit shall be required from Seller.

 

(b)          The
total Lease Rent of $120,000 for August, September and October, 2018 shall be deducted from Seller's proceeds (the “Lease
Rent Holdback”) by Escrow Holder, shall be held in Escrow with Buyer’s other funds following the Initial Closing and
shall be disbursed to Buyer at the rate of $40,000 per month commencing on August 1, 2018 and thereafter on the first day of September
and October, 2018, provided, however, that in the event the Final Closing Date occurs prior to October 31, 2018, Lease Rent shall
be prorated to the Final Closing Date and any remaining balance of the Lease Rent Holdback shall be disbursed by Escrow Holder
to Seller from Escrow on the Final Closing Date.

 

(c)          During
the Lease Term, Seller shall be responsible, at Seller’s sole cost and expense, for normal and customary maintenance and
insuring of the Hard Assets pursuant to the Casualty Policies listed on Schedule 6, attached hereto, but not for replacement of
or capital improvements to the Hard Assets. Buyer shall be responsible, at Buyer’s sole cost and expense, for replacement
of the Hard Assets and capital improvements, if any, and for the payment of all real and personal property taxes on the Hard Assets
from the date of the Initial Closing.

 

    	 	 	12

     

    

 

(d)          Buyer
acknowledges that (i) prior to the Final Closing, Seller shall have exclusive possession and control of the Hard Assets and Buyer
shall not be entitled to use or access the Hard Assets in any manner or for any purpose; and (ii) Buyer shall not acquire any direct
or indirect ownership or profits interest or management authority whatsoever in Seller's Business and that Seller shall solely
own, manage and operate Seller’s Business at all times prior to the Final Closing; and (iii) prior to the Final Closing,
none of Seller’s employees shall assist, represent or in any way participate with Buyer or communicate with Seller's growers
in order to influence such growers to enter into business with Buyer.

 

(e)          Seller
shall be granted the right to occupy up to 1,500 square feet of the existing office space of the Property, on a mutually agreed
basis, rent free, for a period of 5 years following the Final Closing Date to conduct the windup and termination of Seller's Business
and partnership affairs. Buyer acknowledges and agrees that Seller will continue to use the name, Property address and logo, trademarks
and all email addresses and phone numbers of Oxnard Lemon Company in connection with Seller’s concluding its Business and
partnership affairs following the Final Closing including its final grower and partner distributions and that Seller will maintain
its existing bank accounts in the name of Oxnard Lemon Company to facilitate the foregoing. Buyer also acknowledges and agrees
that Seller will continue to employ several of its employees after the Final Closing in connection with the winding up of Seller’s
Business and partnership affairs and that Amy and Tom will be required to devote a reasonable amount of time during normal working
hours to accomplish the same.

 

5.5           Joint
Press Release. Seller and Buyer agree that immediately following the Initial Closing, Seller and Buyer will issue a Joint Press
Release regarding consummation of the transactions contemplated by this Agreement, in the form and content of Exhibit H, attached
hereto. Except as set forth in the foregoing sentence, and in Section 24.14 hereof each Party will refrain from making any public
statement with respect to the transactions contemplated by this Agreement and will not issue any other such press release or make
any such public statement without the prior written approval of the other Party, except as may be required by applicable Law.

 

ARTICLE VI

 

EMPLOYMENT

 

6.1           Employment
of Seller's Employees.  Prior to the Final Closing, Seller will be the sole employer of Seller's employees with all authority
and responsibility therefor. Buyer shall not hire any of Seller's employees prior to the Final Closing. Upon the Final Closing,
Buyer shall be free, in its sole discretion, to employ any and all of Seller's employees upon terms mutually agreed by them.

 

6.2           Employment
of Amy Fukutomi Following the Final Closing Date, Buyer will hire Amy Fukutomi ("Amy") pursuant to the terms of a
written employment agreement mutually agreed by Buyer and Amy (the “Amy Employment Agreement”) which shall be executed
by Amy and the Buyer prior to and as a condition of the Initial Closing.

 

    	 	 	13

     

    

 

6.3           Employment
of Tom Mayhew. Following the Final Closing Date, Buyer will hire Tom Mayhew ("Tom") pursuant to the terms of a written
employment agreement mutually agreed by Buyer and Tom (the “Tom Employment Agreement”) which shall be executed by Tom
and the Buyer prior to and as a condition of the Initial Closing.

 

ARTICLE VII

 

REPRESENTATIONS AND COVENANTS OF SELLER

 

In addition to any express
agreements of Seller contained elsewhere in this Agreement, Seller hereby represents, warrants and covenants with Buyer as follows:

 

7.1           Power.
Seller has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate
the transaction contemplated hereby.

 

7.2           Requisite
Action. All requisite partnership action has been taken by Seller in connection with the entering into of this Agreement, the
execution and delivery of the instruments referenced herein, and the consummation of the transaction contemplated hereby.

 

7.3           Authority.
The persons executing this Agreement, and the instruments referenced herein on behalf of Seller have the legal power, right and
actual authority to bind Seller to the terms and conditions hereof and thereof.

 

7.4           Income
Tax Information. Seller is not a non-resident alien, a foreign corporation, a foreign partnership, a foreign trust, or a foreign
estate (as those terms are defined in the United States Internal Revenue Code and Income Tax Regulations) for purposes of United
States income taxation. In connection therewith, Seller shall deliver to Escrow Holder, for delivery to Buyer at the Closing, the
Seller's Affidavits described in Section 11.1 below.

 

7.5           Encroachments.
To Seller's Knowledge, there are no material encroachments onto the Property of any improvements on any adjoining properties.

 

7.6           Governmental
Notices. Except (i) as previously disclosed to Buyer in the Due Diligence Materials or otherwise in writing prior to the Initial
Closing Date, or (ii) as set forth in the Title Report, Seller has not received any notification from any governmental authority
imposing any special assessments on the Property or bringing any condemnation actions against the Property, or any part thereof,
nor does Seller have any Knowledge of any special assessments or condemnation actions being contemplated. Except as disclosed to
Buyer, Seller has not received any notification from the Ventura County Department of Building and Safety, Ventura County Health
Department, City of Oxnard or any other governmental authority or agency of any health code violations, health hazards or other
similar conditions on the Property.

 

    	 	 	14

     

    

 

7.7           No
Other Agreements. Except as otherwise disclosed to Buyer in the Due Diligence Materials or otherwise in writing prior to the
Initial Closing Date, to Seller's Knowledge, there are no written commitments to, or understandings or agreements with, any private
party or any governmental authority or agency that would materially adversely affect Buyer's intended use of the Property as a
citrus packing warehouse. Seller has not entered into any other contracts for the sale of the Property which are currently in effect,
nor, to Seller’s Knowledge, do there exist any rights of first refusal or options to purchase the Property.

 

7.8           No
Litigation. To Seller’s Knowledge, there is no litigation or legal proceeding pending or, threatened in writing against
Seller or the Property that (a) could reasonably be expected to materially adversely affect Seller's ability to perform its obligations
hereunder, or Buyer's intended use of the Property as a citrus packing warehouse or (b) could impose “successor liability”
on Buyer, including but not limited to claims under ERISA, the Fair Labor Standards Act, the Family Medical Leave Act or any other
applicable state or federal statute.

 

7.9           No
Hazardous Materials. Except as disclosed in the Due Diligence Materials, the Phase 1 Report or otherwise in writing or otherwise
known by Buyer prior to the Initial Closing Date, to Seller's Knowledge (i) the Property has not been used for the storage or disposal
of any Hazardous Material in violation of Environmental Laws, and (ii) there are not present on or about the Property any Hazardous
Materials in violation of Environmental Laws. Seller has not received any notice from any governmental authority concerning the
removal of any Hazardous Materials from the Property, or concerning any restrictions on the use of the Property on account of the
presence of any Hazardous Materials on the Property or on any other property within the "border-zone" of the Property.
Seller has not used, generated, disposed of, or stored any Hazardous Materials on the Property in material violation of Environmental
Laws. To Seller's Knowledge there are no underground storage tanks or any trash, garbage, construction materials or other debris
buried on the Property.

 

7.10         No
Undisclosed Defects. To Seller's Knowledge, except as disclosed to or known by Buyer no material defect or condition of the
Property or soil exists that may materially adversely affect Buyer's intended use of the Property as a citrus packing warehouse.

 

7.11         No
Unrecorded Interest. To Seller’s Knowledge, there are no unrecorded leases, licenses, or other possessory interests on
the Property.

 

7.12         No
Breach. Seller's execution of the Agreement and consummation of the transactions provided for herein, including but not limited
to termination of the Sunkist License Agreement, will not materially violate any agreement by which Seller is bound or give rise
to any liability on the part of Seller or Buyer.

 

7.13         Seller
Delivery of Sunkist Letters.         Concurrently with the Initial Closing, Seller
shall (i) deliver the original executed Sunkist License Termination Letter in the form and content of Exhibit E, attached hereto,
to Sunkist in accordance with the specific requirements of the Sunkist License Agreement for effective immediate notice to Sunkist
of Seller’s termination of the Sunkist License Agreement, effective as October 31, 2018; and (ii) deliver the original executed
Sunkist Retirement Plan Withdrawal Letter in the form and content of Exhibit I, attached hereto, to the Sunkist Retirement Plan
Board in accordance with the specific requirements of the Sunkist Retirement Plan for effective immediate notice to the Sunkist
Retirement Plan of Seller’s termination of participation in and withdrawal from the Sunkist Retirement Plan, effective as
of August 1, 2018.

 

    	 	 	15

     

    

 

7.14         Labor
Matters. Seller is not a party to any collective bargaining agreement nor, to Seller’s Knowledge, subject to any union
organizational campaign.

 

7.15         "AS
IS". Except for its obligations under Section 5.2 to repair the roof, Seller makes no representation as to the conditions
of the Purchased Assets and is selling them "AS IS" as provided in Section 3.6, hereof.

 

7.16         Survival.
The representations and warranties of this Article VII shall survive the Final Closing for a period of one (1) year. The indemnification
limitations set forth in Section 20.3 hereof shall govern the term of Seller’s indemnification obligations with respect to
the matters set forth therein.

 

ARTICLE VIII

 

REPRESENTATIONS AND COVENANTS OF BUYER

 

8.1           Power.
Buyer has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate
the transaction contemplated hereby.

 

8.2           Requisite
Action. All requisite corporate action has been taken by Buyer in connection with the entering into of this Agreement, the
execution and delivery of the instruments referenced herein, and the consummation of the transaction contemplated hereby.

 

8.3           Authority.
The persons executing this Agreement and the instruments referenced herein on behalf of Buyer have the legal power, right and actual
authority to bind Buyer to the terms and conditions hereof and thereof.

 

8.4           Insolvency.
Buyer is not bankrupt or insolvent under any applicable federal or state standard.

 

8.5           Survival.
The representations and warranties of this Article VIII shall survive the Final Closing for a period of one (1) year. The indemnification
limitations set forth in Section 20.3 hereof shall govern the term of Buyer’s indemnification obligation with respect to
the matters set forth therein.

 

    	 	 	16

     

    

 

ARTICLE IX

 

CONDITIONS TO INITIAL CLOSING

 

9.1           Seller's
Conditions to Initial Closing. In addition to the conditions provided in other provisions of this Agreement Seller's obligation
to perform its undertakings provided in this Agreement (including its obligation to sell the Property to Buyer) are conditioned
upon the satisfaction or written waiver by Seller of the following (collectively, "Seller's Initial Closing Conditions"):

 

(a)          Performance
by Buyer. The due performance by Buyer of each and every material undertaking and agreement to be performed by it hereunder
and the truth of each representation and warranty made by Buyer in this Agreement at the time of which the same is made and as
of the Initial Closing Date as if made on and as of the Initial Closing Date.

 

(b)          Authorization.
The execution and delivery by Buyer and the consummation by Buyer of the transactions provided for herein have been duly authorized
by all necessary actions by Buyer and all required consents and approvals have been obtained.

 

(c)          Initial
Closing Deadline.  The completion of the Initial Closing on or before
the Initial Closing Deadline set forth in Section 3.5(b), hereof.

 

(d)          Employment
Agreements. Buyer and Seller shall have deposited into Escrow written, mutually executed confirmations that the Amy Employment
Agreement and the Tom Employment Agreement have been duly executed by the parties thereto and will become effective concurrently
with the Initial Closing.

 

(e)          Natural
Hazard Report Receipt. Buyer shall have deposited into Escrow the Natural Hazard Disclosure ("NHD") Statement and
Acknowledgment of Receipt duly executed by Buyer.

 

9.2           Buyer's
Conditions to Initial Closing. In addition to the conditions provided in other provisions of this Agreement, Buyer's obligation
to perform its undertakings provided in this Agreement (including its obligation to purchase the Property) are conditioned upon
the satisfaction or written waiver of Buyer of each of the following (collectively, the "Buyer's Initial Closing Conditions"),
(Seller's Initial Closing Conditions and Buyer's Initial Closing Conditions shall hereinafter be referred to herein collectively
as the "Closing Conditions").

 

(a)          Owner's
Title Policy. The Title Company shall issue or be committed to issue to Buyer, at Seller's expense, 1990 CLTA Standard Coverage
Owner’s Policy of Title Insurance ("Title Policy") for the total amount of Twenty Million Dollars ($20,000,000)
dated as of the Close of Escrow, insuring Buyer as the fee owner of the Property, and showing title vested in Buyer subject only
to the following title conditions (collectively, the "Approved Title Conditions").

 

    	 	 	17

     

    

 

(i)          The
printed exceptions and exclusions contained in the Title Policy, contained in Schedule B, Exceptions from Coverage.

 

(ii)         All
general and special real property taxes, bonds and assessments, other than any that are delinquent.

 

(iii)        The
lien of supplemental taxes assessed pursuant to Chapter 3.5 commencing with Section 75 of the California Revenue and Taxation Code.

 

(iv)        Matters
affecting the condition of title to the Property created by or with the written consent of Buyer.

 

(v)         All
exceptions described in the Title Documents which were approved by Buyer in accordance with Section 3.4 above.

 

Seller shall pay the cost of the Title Policy
and Buyer shall pay the additional cost of obtaining extended coverage and any other endorsements. Seller shall execute and deliver
to the Title Company an Owner's Affidavit in the form requested by the Title Company and approved by Seller ("Owner's Affidavit")
and a Perishable Agricultural Commodities Act (“PACA”) Affidavit (“PACA
Affidavit”) as a condition to issuing the Title Policy insuring Buyer against damages resulting from (i) matters not
shown by public records but which could be ascertained by inspection of the land or inquiry of persons in possession and (ii) easements,
liens or encumbrances, not shown by public records and (iii) liens by agricultural produce suppliers pursuant to PACA.

 

(b)          Performance
by Seller. The due performance by Seller of each and every undertaking and agreement to be performed by it hereunder and the
truth of each representation and warranty made by Seller in this Agreement at the time as of which the same is made and as of the
Initial Closing Date as if made on and as of the Initial Closing Date.

 

(c)          Authorization.
The execution and delivery by Seller and the consummation by Seller of the transactions provided for herein have been duly authorized
by all necessary actions by Seller and all required consents and approvals have been obtained.

 

(d)          No
Material Change. At the Initial Closing there shall have been no material adverse changes to the Property which would prevent
Buyer's intended use of the Property as a citrus packing warehouse.

 

(e)          Sunkist
Letters. Seller shall have deposited in Escrow copies of the original signed (i) Sunkist License Termination Letter and (ii)
Sunkist Retirement Plan Withdrawal Letter which Seller shall deliver on the Initial Closing Date.

 

(f)          Employment Agreements.
Buyer and Seller shall have deposited into Escrow written, mutually executed confirmations that the Amy Employment Agreement and
the Tom Employment Agreement have been duly executed by the parties thereto and will become effective concurrently with the Initial
Closing.

 

    	 	 	18

     

    

 

(g)          Natural
Hazard Report Receipt. Seller shall have deposited into Escrow the Natural Hazard Disclosure ("NHD") Statement and
Acknowledgment of Receipt duly executed by Seller.

 

ARTICLE X

 

EFFECT OF A FAILURE OF A CONDITON

 

10.1         Effect
of Failure. The conditions described in Section 9.1 are for the exclusive benefit of Seller and may be waived in whole or in
part by Seller only, at its sole option, by Seller's delivery of written notice of such waiver to Buyer and Escrow Holder. The
conditions described in Section 9.2 are for the exclusive benefit of Buyer and may be waived in whole or in part by Buyer only,
at its sole option, by Buyer's delivery of written notice of such waiver to Seller and Escrow Holder. In the event the Initial
Closing does not occur because one or more conditions to the Initial Closing set forth in Article IX are not satisfied or waived
by the party benefited thereby, and if the failure of such condition is not caused by the default of either party, then the parties
agree that this Agreement and the Escrow shall thereupon be terminated and that: (i) Buyer and Seller shall execute and deliver
to Escrow Holder cancellation instructions and all other documents that are reasonably required by Escrow Holder and/or such Seller
in order to cancel this Escrow and release any interest of Buyer in and to the Property; (ii) Buyer shall pay Escrow Holder all
cancellation fees and expenses it owes; (iii) Escrow Holder shall refund all funds deposited by Buyer into Escrow, together with
all interest earned thereon in Escrow, to Buyer, less Buyer's share of Escrow Holder's cancellation fees and expenses, and Escrow
Holder shall return all documents and instruments to the parties who deposited the same into Escrow; and (iv) this Agreement shall
terminate and neither party shall have any further obligation or responsibility hereunder or liability of any nature or amount
whatsoever to the other party hereunder.

 

ARTICLE XI

 

ESCROW INITIAL CLOSING OBLIGATIONS

 

11.1         Deliveries
by Seller to Escrow Holder. Seller hereby covenants and agrees to deliver to Escrow Holder on or prior to the Initial Closing
Date the following instruments and documents, the delivery of each of which shall be a condition to the Initial Closing of Escrow
for the benefit of Buyer:

 

(a)          Grant
Deed. A Grant Deed, duly executed and acknowledged by Seller in the form of Exhibit B, attached hereto, to convey title of
the Property to Buyer.

 

    	 	 	19

     

    

 

(b)          Bill
of Sale and General Assignment. A Bill of Sale and General Assignment, duly executed by Seller in the form of Exhibit F, attached
hereto to convey title of the Tangible Personal Property to Buyer.

 

(c)          FIRPTA
Affidavit. An Affidavit of Nonforeign Status under the Foreign Investment in Property Tax Act of 1980 duly executed by Seller
("Nonforeign Status Affidavit");

 

(d)          California
Affidavit. A California Form 597-W ("California Tax Certificate") (the Nonforeign Status Affidavit and the California
Tax Certificate referenced in Section 11.1(c) and (d), respectively, are collectively referred to as the "Seller’s Affidavits");

 

(e)          Proof
of Authority. Such proof of Seller's authority and authorization to enter into this Agreement and consummate the transactions,
contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of Seller to act for and bind Seller as may be reasonably required by Title Company; and

 

(f)          Employment
Agreements. Written executed certifications that the Amy Employment Agreement
and the Tom Employment Agreement have been duly executed by the parties thereto.

 

(g)          Owner's
and PACA Affidavits. The Owner's Affidavit and PACA Affidavit as specified in Section 9.2(a)(v).

 

(h)          Lease.
A duly-executed duplicate original of the Lease.

 

(i)          Wire
Instructions. Wire Transfer instructions with respect to the distribution by Escrow of the Seller’s proceeds.

 

(j)          Sunkist
Letters. Copies of the fully executed Sunkist License Termination Letter in the form of Exhibit E, attached hereto and the
Sunkist Retirement Plan Withdrawal Letter in the form of Exhibit I, attached hereto.

 

(k)          Closing
Statement. A Closing Statement acceptable to Buyer, executed by Seller.

 

11.2         Deliveries
by Buyer to Escrow Holder. Buyer hereby covenants and agrees to deliver to Escrow Holder on or prior to the Initial Closing
Date the following, the delivery of each of which shall be a condition to the Initial Closing for the benefit of Seller:

 

(a)          Closing
Payment. Buyer's share of any Escrow closing costs, all documentary transfer tax, all sales and use taxes, all real and personal
property transfer fees and tax prorations in the amount determined by Escrow Holder, shall be delivered to Escrow Holder by Buyer
by wire transfer in immediately available funds not later than one business day immediately prior to the Initial Closing Date.

 

    	 	 	20

     

    

 

(b)          Preliminary
Change of Ownership. An executed preliminary change of ownership report in the current form required by Ventura County (the
"Preliminary Change of Ownership Report").

 

(c)          Proof
of Authority. Such proof of Buyer's authority and authorization to enter into this Agreement and consummate the transactions
contemplated hereby, and such proof of the power and authority of the individual(s) executing and/or delivering any instruments,
documents or certificates on behalf of Buyer to act for and bind Buyer as may be reasonably required by Title Company.

 

(d)          Lease.
A duly executed duplicate original of the Lease.

 

(e)          Employment
Agreements. Written executed certifications that the Amy Employment Agreement
and the Tom Employment Agreement have been duly executed by the parties thereto.

 

(f)          Closing
Statement. A Closing Statement acceptable to Seller, executed by Buyer.

 

11.3         Disbursements
and Other Actions by Escrow Holder. Upon the satisfaction of the Closing Conditions for the Initial Closing, and when all required
funds and documents have been deposited into the Escrow, Escrow Holder shall promptly undertake all of the following:

 

(a)          Date,
as of the Initial Closing, all instruments calling for a date;

 

(b)          Calculate
and insert on the Grant Deed the amount of the documentary transfer tax payable by Buyer;

 

(c)          Cause
the Grant Deed of the Property (with documentary transfer tax statement thereon) to be recorded in the Official Records of Ventura
County;

 

(d)          Submit
to the Recorder's Office the Preliminary Change of Ownership Report, concurrently with the submission of the Grant Deed for recordation;

 

(e)          Deliver
to Buyer copies of the Sunkist License Agreement Termination Letter and the Sunkist Retirement Plan Withdrawal Letter deposited
in Escrow pursuant to Section 4.3, hereof.

 

(f)          Deduct
from the Seller’s proceeds all items chargeable to the account of Seller, if any, pursuant to the Closing Statement approved
by Buyer and Seller including, without limitation, the amount of any Monetary Encumbrances to be paid by Seller and Seller's share
of any Escrow closing costs and prorations (which amount is referred to as the "Net Amount") and the Escrow Withdrawal
Liability Holdback and the Lease Rent Holdback and disburse the Net Amount of the Seller’s proceeds to Seller promptly upon
the Initial Close of Escrow; and

 

    	 	 	21

     

    

 

(g)          Cause
the Title Policy described in Section 9.2(a) above to be delivered to Buyer; and

 

(h)          Prepare
and file IRS Form 1099-S within the time specified by the Internal Revenue Service.

 

(i)          Wire
funds for the Escrow Withdrawal Liability Holdback to the Sunkist Retirement Plan at the time and in accordance with the provisions
of Section 5.3 hereof.

 

(j)          Wire
funds from the Escrow Rent Holdback to the Buyer at the times and in accordance with the provisions of Section 5.4(b), hereof.

 

11.4         Post-Closing
Instructions. The instruments described below that are required to be recorded under this Agreement shall provide that the
Recorder's Office shall return them to Escrow Holder after recordation, and upon receipt thereof, the Escrow Holder shall deliver
the following:

 

(a)          To
Seller:

 

(i)          A
copy of the Grant Deed as recorded;

 

(ii)         Plain
copies for Seller of the Seller's Affidavits, the Preliminary Change of Ownership Report and Seller’s 1099-S Forms.

 

(iii)        A
signed duplicate original of the Lease.

 

(b)          To
Buyer:

 

(i)          The
recorded original of the Grant Deed.

 

(ii)         Plain
copies of the California Tax Certificates, the Preliminary Change of Ownership Report, and the 1099-S Forms.

 

(iii)        A
signed duplicate original of the Lease.

 

(c)          To
Counsel to Seller: Copies of all documents delivered to Seller pursuant to Section 11.4(a) above.

 

(d)          To
Counsel to Buyer: Copies of all documents delivered to Buyer pursuant to Section 11.4(b) above.

 

    	 	 	22

     

    

 

ARTICLE XII

 

ESCROW CANCELLATION

 

If either party materially
defaults with respect to its obligations hereunder, or if Escrow is not in a condition to close by the Initial Closing Date, Escrow
Holder shall continue to comply with the instructions contained herein until a written demand has been made by a party entitled
to do so for the cancellation of Escrow. Escrow Holder shall notify the other party of any such demand. Notwithstanding the foregoing,
in no event shall Escrow close after the absolute Initial Closing Deadline set forth in Section 3.5(b), hereof and if, for any
reason, Escrow fails to close on or before the Initial Closing Deadline, then the Escrow shall, without any notice from or agreement
or acknowledgement by Buyer or Seller, automatically be terminated and cancelled and the provisions of Section 12.1 shall be applicable.

 

12.1         Escrow
Cancellation Charges. If the Initial Closing fails to occur due to Seller's material default, then the provisions of Section
12.2 shall be applicable and Seller shall pay all Escrow cancellation charges. If the Initial Closing fails to occur due to Buyer's
material default, then the provisions of Section 12.3 shall be applicable and Buyer shall immediately pay, in addition to the liquidated
damages amount set forth in Section 18.1, hereof, all Escrow cancellation charges. If the Initial Closing fails to occur for any
reason other than the foregoing, Seller and Buyer shall each pay one-half (1/2) the Escrow cancellation charges, and Seller and
Buyer shall release the other party from all liability hereunder for the failure of the Initial Closing to occur, provided that
all funds deposited by Buyer into Escrow, together with all interest earned thereon in Escrow, less Buyer's share of any Escrow
cancellation charges, shall be returned to Buyer.         

 

12.2         Termination
Rights of Buyer. In the event Seller shall materially default under any of the terms and provisions of this Agreement, or that
a condition for the benefit of Buyer is not satisfied or otherwise waived, on or before the Initial Closing Date, Buyer shall have
the right, but not the obligation, in addition to any other rights or remedies which it may have at law or in equity, to terminate
Buyer's obligations under this Agreement with respect to Seller and the Escrow created hereby. In the event of such termination
by Buyer:

 

(a) Buyer shall be entitled
to the immediate refund of all funds deposited by Buyer into Escrow, including all interest earned thereon; and

 

(b) Buyer may pursue any
other rights or remedies at law or in equity to acquire the Property or the defaulting Seller's portion of the Property or obtain
compensation for Seller's breach of this Agreement. The termination of this Agreement by Buyer pursuant to its rights under this
Section shall not relieve Seller of its liability for breach of its obligations hereunder but shall relieve Buyer of all of its
obligations under this Agreement from the date of termination.

 

12.3         Termination
Rights of Seller. In the event Buyer shall materially default under any of the terms and provisions of this Agreement, or that
a condition for the benefit of Seller is not satisfied or otherwise waived, on or before the Initial Closing Date, Seller shall
have the right, but not the obligation, in addition to any other rights or remedies which it may have at law or in equity, to terminate
Seller's obligations under this Agreement with respect to Buyer and the Escrow created hereby. In the event of such termination
by Seller:

 

    	 	 	23

     

    

 

(a) Seller shall be entitled
to the immediate payment by Buyer through Escrow of the liquidated damages amount set forth in Section 18.1, hereof; and

 

(b) The termination of
this Agreement by Seller pursuant to its rights under this Section shall relieve Seller of all of its obligations under this Agreement
from the date of termination.

 

ARTICLE XIII

 

COSTS AND PRORATIONS

 

13.1         Escrow
and Other Costs. Buyer and Seller shall each pay one-half (1/2) of Escrow Holder's escrow fees for the Escrow. Seller shall
bear the cost of a standard coverage CLTA owner's title policy. Buyer shall pay the additional cost of any extended coverage and
of obtaining any other endorsements and the cost of all documentary transfer taxes for the Property. Buyer and Seller shall each
bear their own respective legal and accounting costs, if any, outside of Escrow. All recording costs will be paid by Buyer and
all other costs, fees and expenses not otherwise provided for in this Agreement shall be paid by Seller or Buyer as determined
by the Escrow Holder according to standard practice for similar commercial transactions in Ventura County, California.

 

13.2         Real
Property Taxes and Assessments. All nondelinquent general and special real property taxes, bonds and assessments with respect
to any portion or portions of the Hard Assets shall be prorated through Escrow between Buyer and Seller as of the Initial Closing
based upon the latest available tax bills or tax information using customary escrow procedures. If the regular tax bill or bills
for any portion of the Property for the fiscal year in which the Initial Closing occurs are not available as of the Initial Closing,
Buyer and Seller shall re-prorate all such general and special real property taxes, bonds and assessments for the Property between
themselves outside of Escrow based upon the then current fiscal year's regular tax bill or bills within thirty (30) days following
the date such regular tax bill or bills are actually received by the parties. Any Mello-Roos assessments, special assessments,
district assessments or any other bonds and assessments with respect to the Property shall not be paid in full by Seller, but shall
be assumed by Buyer and the current installment of such bonds and assessments shall be prorated between Buyer and Seller as of
the Initial Closing as provided above.

 

13.3         Supplemental
Real Property Taxes. With respect to any supplemental taxes assessed against the Real Property pursuant to California Revenue
and Taxation Code Section 75 et seq., Buyer shall assume all such supplemental taxes assessed against the Real Property for any
period, on, or after the Initial Closing, including, without limitation, any supplemental taxes due to new construction occurring
prior to the Initial Closing. Buyer shall have the right to contest any such supplemental taxes or assessments with the appropriate
tax authority.

 

    	 	 	24

     

    

 

13.4         Documentary
Transfer Taxes; Sales and Use Taxes. Buyer shall pay, at Buyer’s sole
cost and expense, all documentary transfer tax (based upon a mutually agreed purchase price for the Property of $20,000,000.),
all sales and use taxes and all real and personal property transfer fees and taxes, if any, assessed against the Purchased Assets.

 

13.5         Broker's
Commission. Neither Buyer nor Seller has engaged the services of a broker or finder in connection with the transaction provided
for herein. No party shall be due a fee or any commissions, finder's fees or other compensation. Each party agrees to and does
hereby indemnify and hold the other harmless from and against any and all costs, liabilities, losses damages, claims, causes of
action or proceedings which may result from any broker, agent or finder, licensed or otherwise, claiming through, under or by reason
of the conduct of the indemnifying party in connection with this transaction.

 

ARTICLE XIV

 

CONDEMNATION PRIOR TO INITIAL CLOSING

 

14.1         Condemnation.
If all or any material portion of the Property is taken prior to the Initial Closing as a result of condemnation (including the
filing of any notice of intended condemnation or proceedings in the nature of eminent domain), Buyer shall have the right, by written
notice delivered to Seller and Escrow Holder prior to the Initial Closing Date to terminate this Agreement and cancel Escrow. Otherwise,
if Buyer does not so elect to terminate this Agreement and cancel Escrow by such written notice delivered to Seller and Escrow
Holder, then this Agreement shall remain in full force and effect, and, provided that the Initial Closing occurs, the entire award
from the condemning authority shall be the sole property of Buyer, and Seller hereby assigns to Buyer all of Seller's right, title
and interest in and to such award. If this Agreement and the Escrow are terminated pursuant to this Section, then Seller and Buyer
shall each pay one-half (1/2) the Escrow cancellation charges, and Seller and Buyer shall release the other party from all liability
hereunder for the failure of the Initial Closing to occur, provided that all funds deposited by Buyer into Escrow, together with
all interest earned thereon in Escrow, less Buyer's share of any Escrow cancellation charges, shall be returned to Buyer.

 

ARTICLE XV

 

FIRE OR OTHER CASUALTY PRIOR TO INITIAL CLOSING

 

15.1         Fire
or Other Casualty Prior to Initial Closing. If there is material damage to any portion of the Property or if any portion of
the Property is destroyed by earthquake, flood, landslide, fire or other casualty prior to the Initial Closing Date, and the Property
is covered by the Casualty Policies then Buyer shall have the right, by written notice delivered to Seller and Escrow Holder prior
to the Initial Closing, to terminate this Agreement and cancel Escrow. Otherwise, if Buyer does not so elect to terminate this
Agreement and cancel Escrow by such written notice delivered to Seller and Escrow Holder, then this Agreement shall remain in full
force and effect, and all insurance proceeds payable to Seller with respect to such damage or destruction, if any, shall be assigned
and delivered by Seller to Buyer at or after the Initial Closing of Escrow hereunder. If this Agreement and the Escrow are terminated
by Buyer by such written notice delivered to Seller and Escrow Holder as provided above, then, Seller and Buyer shall each pay
one-half (1/2) the Escrow cancellation charges, and Seller and Buyer shall release the other party from all liability hereunder
for the failure of the Initial Closing to occur, provided that all funds deposited by Buyer into Escrow, together with all interest
earned thereon in Escrow, less Buyer's share of any Escrow cancellation charges, shall be returned to Buyer.

 

    	 	 	25

     

    

 

ARTICLE XVI

 

CONDITIONS TO FINAL CLOSING

 

16.1         Seller's
Conditions to Final Closing. In addition to the other conditions provided for in other provisions of this Agreement, Seller's
obligations to perform its undertakings provided in this Agreement (including its obligation to sell the Soft Assets to Buyer)
are conditional upon the satisfaction or written waiver by Seller of the following (collectively, "Seller’s Final Closing
Conditions").

 

(a)          Performance
by Buyer. The due performance by Buyer of each and every material undertaking and agreement to be performed by it hereunder
and the truth of each representation and warranty made by Buyer in this Agreement at the time as of which the same is made and
as of the Final Closing Date as if made on and as of the Final Closing Date.

 

(b)          Authorization.
The execution and delivery by Buyer and the consummation by Buyer of the transactions provided for herein have been duly authorized
by all necessary actions by Buyer and all required consents and approvals have been obtained.

 

16.2         Buyer's
Conditions to Final Closing. In addition to the conditions provided in other provisions of this Agreement, Buyer's obligation
to perform its undertakings provided in this Agreement (including its obligation to purchase the Soft Assets) are conditioned upon
the satisfaction or written waiver of Buyer of each of the following (collectively, the "Buyer's Final Closing Conditions"
and Seller’s Final Closing Conditions and Buyer's Final Closing Conditions shall hereinafter be referred to herein collectively
as the "Final Closing Conditions"):

 

(a)          Performance
by Seller. The due performance by Seller of each and every undertaking and agreement to be performed by it hereunder and the
truth of each representation and warranty made by Seller in this Agreement at the time as of which the same is made and as of the
Final Closing Date as if made on and as of the Final Closing Date.

 

(b)          No
Material Change. At the Final Closing there shall have been no material adverse changes to the Soft Assets.

 

    	 	 	26

     

    

 

(c)          No
Disposition Or Encumbrance. During the Sunset Period Seller shall not have disposed of any of the Soft Assets other than in
the ordinary course of business and with suitable replacements procured by Seller. Seller shall not encumber any of the Soft Assets
or suffer any lien to be imposed thereon.

 

(d)          Fruit
Growers Supply and Allied Packaging Liens. Seller shall have diligently taken all actions, at Seller’s sole cost and
expense, necessary to cause the termination of the Fruit Growers Supply and Allied Packaging UCC liens on the Purchased Assets
on or before the Final Closing Date and, in any event, Seller shall effect said termination as soon as practicable thereafter.

 

ARTICLE XVII

 

EFFECT OF FAILURE OF A CONDITION

 

17.1         Effect
of Failure of a Condition The conditions described in Section 16.1 are for the exclusive benefit of Seller and may be waived
in whole or in part by Seller only, at its sole option, by Seller's delivery of written notice of such waiver to Buyer. The conditions
described in Section 16.2 are for the exclusive benefit of Buyer and may be waived in whole or in part by Buyer only, at its sole
option, by Buyer's delivery of written notice of such waiver to Seller. In the event the Final Closing does not occur because any
of the Final Closing Conditions set forth in Article XVI are not satisfied or waived by the party benefited thereby, and if the
failure of such condition is not caused by the default of either party, then the parties agree that this Agreement and the Escrow
shall thereupon be continued in full force and effect until such time as said failed conditions have been satisfied or waived and
the Final Closing can occur.

 

ARTICLE XVIII

 

SELLER'S LIQUIDATED DAMAGES IF BUYER DEFAULTS

 

18.1         Seller's
Liquidated Damages If Buyer Defaults BUYER AND SELLER AGREE THAT IF THE INITIAL CLOSING FAILS TO OCCUR DUE TO THE MATERIAL
DEFAULT OF BUYER, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO FIX SELLER'S ACTUAL DAMAGES. BUYER AND SELLER AGREE THAT A
REASONABLE ESTIMATE OF SELLER'S DAMAGES IF THE INITIAL CLOSE OF ESCROW FAILS TO OCCUR DUE TO BUYER'S DEFAULT WOULD BE THE SUM OF
TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) (THE “LIQUIDATED DAMAGES AMOUNT”). IN ADDITION, BUYER DESIRES
TO LIMIT THE AMOUNT OF DAMAGES FOR WHICH BUYER MIGHT BE LIABLE SHOULD BUYER BREACH THIS AGREEMENT, AND SELLER DESIRES TO AVOID
THE COSTS AND LENGTHY DELAYS THAT WOULD RESULT IF SELLER WERE REQUIRED TO FILE A LAWSUIT TO COLLECT ITS DAMAGES FOR A BREACH OF
THIS AGREEMENT. THEREFORE, IF THE INITIAL CLOSING (AND CONSEQUENTLY THE FINAL CLOSING) FAILS TO OCCUR DUE TO THE DEFAULT OF BUYER,
THEN UPON THE WRITTEN DEMAND OF SELLER THIS AGREEMENT AND THE ESCROW SHALL BE TERMINATED AND CANCELLED. IN SUCH EVENT, (A) ESCROW
HOLDER SHALL RETURN ALL DOCUMENTS AND INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE SAME, (B) ALL TITLE AND ESCROW CANCELLATION
CHARGES SHALL BE PAID BY BUYER, (C) ESCROW HOLDER SHALL IMMEDIATELY AND WITHOUT FURTHER INSTRUCTION FROM BUYER PAY TO SELLER FROM
BUYER’S FUNDS IN ESCROW THE LIQUIDATED DAMAGES AMOUNT FOR BUYER'S FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY. SELLER'S
SOLE AND EXCLUSIVE REMEDY IN THE EVENT OF BUYER'S DEFAULT SHALL BE LIMITED TO THE LIQUIDATED DAMAGES AMOUNT AND SELLER HEREBY WAIVES
ALL OTHER CLAIMS FOR DAMAGES OR RELIEF AT LAW OR IN EQUITY (INCLUDING, WITHOUT LIMITATION, ANY RIGHTS TO SPECIFIC PERFORMANCE THAT
SELLER MAY HAVE PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1680 OR 3389, OR OTHERWISE).

 

	 	 	 	 	 
	 	Seller's Initials	 	Buyer's Initials	 

 

    	 	 	27

     

    

 

ARTICLE XIX

 

FINAL CLOSING; FINAL CLOSING OBLIGATIONS

 

19.1         Close
of Final Closing. The Final Closing shall take place through Escrow on the Final Closing Date. Final Closing shall be conditional
on satisfaction or waiver of the Conditions to Final Closing of each party, and Buyer and Seller carrying out their Final Closing
Obligations provided in Section 19.2 and 19.3 below.

 

19.2         Delivery
by Seller to Buyer. At the Final Closing and subject to the terms and conditions herein contained, Seller shall execute and
deliver, or cause to be executed and delivered, to Escrow the following:

 

(a)          A
Bill of Sale and General Assignment in the form of Exhibit F, attached hereto, and such other assignments and instruments as may
be required transferring to Buyer ownership of all of Seller's right, title and interest in and to the Soft Assets, including assignments
of all applicable warranties with respect to any of the Soft Assets.

 

(b)          A
Trademark/Trade Name Assignment by Seller in the form of Exhibit G, attached hereto.

 

 

19.3         Delivery
by Buyer at Final Closing. At the Final Closing and subject to the terms and conditions herein contained, Buyer shall execute
and deliver, or cause to be executed and delivered, to Seller the following:

 

    	 	 	28

     

    

 

(a)          Closing
Payment. Buyer's share of any Escrow closing costs,, sales and use taxes and prorations in the amount determined by
Escrow Holder, shall be delivered to Escrow Holder by Buyer by wire transfer in immediately available funds not later than
one business day immediately prior to the Final Closing Date.

 

(b)          Closing
Statement. A Closing Statement acceptable to Seller, executed by Buyer.

 

19.4         (a)          Disbursements
and Other Actions by Escrow Holder. Upon the satisfaction of the Closing Conditions for the Final Closing, and when all required
funds and documents have been deposited into the Escrow, Escrow Holder shall promptly undertake all of the following:

 

(i)          Date,
as of the Final Closing, all instruments calling for a date;

 

(ii)         Deliver
to Buyer copies of the Bill of Sale and General Assignment and the Trademark/Trade Name Assignment deposited in Escrow pursuant
to Section 19.2, hereof.

 

(iii)        Deduct
from the Seller’s proceeds (i.e. the Soft Assets Purchase Price and any other proceeds due Seller from Escrow including but
not limited to the Escrow Withdrawal Liability Holdback and/or the Escrow Rent Holdback) all items chargeable to the account of
Seller, if any, pursuant to the Closing Statement approved by Buyer and Seller including, without limitation, Seller's share of
any Escrow closing costs and prorations (which amount is referred to as the "Net Amount") and disburse the Net Amount
of the Seller’s proceeds to Seller promptly upon the Final Close of Escrow.

 

(b)          Possession
of Purchased Assets. Except as otherwise provided for herein, upon completion of the Final Closing, possession of the Hard
Assets and the Soft Assets shall be delivered to Buyer free and clear of any possessory interests whatsoever. Seller shall provide
Buyer with keys to all exterior entrances of the Property and all locked interior spaces, cabinets, vehicles and equipment which
are part of the Hard Assets. In the event that any personal property which is not part of the Hard Assets and not otherwise properly
located on the Property (such as Seller’s personal property to be used in connection with Seller’s Business after the
Final Closing), Seller shall promptly remove the same at Seller’s sole cost and expense.

 

19.5         Transaction
Documents; Further Assurances.

 

(a)          For
purposes of this Agreement, "Transaction Documents" shall mean this Agreement, together with all schedules and exhibits
hereto and thereto, and all agreements and documents required to be entered into or delivered pursuant hereto or thereto, including,
without limitation the Lease, the Bill of Sale and General Assignment, and the Trademark/Trade Name Assignment.

 

    	 	 	29

     

    

 

(b)          In
addition to the execution and delivery of the Transaction Documents, and the actions, documents and instruments specifically required
to be taken or delivered hereby and thereby, Seller and Buyer shall execute and deliver such other instruments and take such other
actions as the other party or its counsel may reasonably request in order to complete the transactions contemplated by this Agreement.

 

19.6         Buyer
Assumption of Condition of Purchased Assets; Buyer Release.

 

(a)          
As provided for in Section 3.6, hereof, Buyer is acquiring the Purchased Assets in “AS-IS, WHERE-IS” condition, subject
only to Seller’s express representations and warranties contained in this Agreement.

 

(b)          Buyer
is and will be relying strictly and solely upon the inspections and examinations of the Purchased Assets by Buyer and Buyer’s
agents and officers and the advice and counsel of such agents and officers, and the Buyer is and will be fully satisfied that the
Purchase Price is fair and adequate consideration for the Property. Except for Seller’s express written representations contained
herein, Seller is not making and has not made any warranties or representations with respect to the Purchased Assets as an inducement
to the Buyer to enter into this Agreement or to thereafter purchase the Purchased Assets. After the Initial Closing and except
for Seller’s express duty hereunder to indemnify Buyer, Buyer shall assume the full risk of any loss or damage occasioned
by any fact, circumstance, condition or defect pertaining to the physical or legal condition of the Hard Assets. After the Final
Closing and except for Seller’s express duty hereunder to indemnify Buyer, Buyer shall assume the full risk of any loss or
damage occasioned by any fact, circumstance, condition or defect pertaining to the physical or legal condition of the Soft Assets.
As of the end of the Due Diligence Period, Buyer has fully satisfied itself with respect to all applicable laws, statutes, regulations
and requirements of all governmental bodies and agencies concerning the sale, use, development, operation or suitability of the
Purchased Assets, including but not limited to, applicable zoning and other governmental land use regulations and requirements
relating to the use of the Property.

 

(c)          Except
for Seller’s express written representations and covenants contained herein, upon Buyer's purchase of the Purchased Assets,
Buyer shall and hereby does waive, relinquish and release Seller, and its partners, officers, directors, employees, agents, trustees,
accountants, parents, subsidiaries, attorneys, shareholders, successors and all other persons acting for, under or in concert with
the others, past and present, of and from any and all claims, demands, actions, causes of action, obligations, damages, liabilities,
losses, costs or expenses, including attorney fees, of any kind or nature whatsoever, past or present arising from, related to
or in connection with (i) the physical and legal condition (including any construction defects, errors, omissions or other conditions,
latent or otherwise, and the presence in the soil, air, structures and surface and subsurface waters of materials or substances
that have been or may in the future be determined to be hazardous substances or otherwise toxic, hazardous, undesirable or subject
to regulation and that may need to be specially treated, handled and/or removed from the Purchased Assets under current or future
federal, state and local laws, regulations or guidelines), valuation, salability or utility of the Purchased Assets, or the suitability
of the Purchased Assets for any purpose whatsoever, and (ii) any Due Diligence Materials furnished by the Seller under or in connection
with this Agreement. Buyer expressly understands and acknowledges that it is possible that unknown losses or claims exist or that
present losses may have been underestimated in amount or severity, and Buyer explicitly took that into account in determining the
consideration for the execution of this Agreement, and a portion of said consideration, having been bargained for between the parties
with the knowledge of the possibility of such unknown losses or claims, was given in exchange for a full accord, satisfaction and
discharge of all such losses or claims. Consequently, Buyer expressly waives all rights under California Civil Code §1542,
which provides that:

 

    	 	 	30

     

    

 

“A GENERAL RELEASE
DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

(d)          Notwithstanding
said Section 1542, Buyer agrees that this Agreement shall act as a release of all future claims that may arise from the above-described
dispute and controversy, whether such claims are currently known or unknown, foreseen or unforeseen, suspected or unsuspected,
actual or potential, absolute or contingent, pending or anticipated, including without limitation, any claim for damages as yet
not incurred; and Buyer intentionally and specifically waives any rights Buyer may have under the provisions of said Section 1542,
as well as under any other statutes or common law principles of similar effect, and Buyer assumes full responsibility for such
injuries, damages, losses or liabilities that Buyer may hereafter incur with respect to such claims.

 

ARTICLE XX

 

INDEMNIFICATION; CLAIMS

 

20.1         Indemnification
by Seller. From and after the Initial Closing Date to the Indemnification Termination Dates, defined in Section 20.3, hereof,
applicable to Seller’s SRP Withdrawal Indemnity and the Sunkist License Termination Indemnity and the Seller General Indemnity,
defined below, Seller shall indemnify and hold harmless Buyer and its affiliates, directors, officers and employees from and against
any and all losses, liabilities, expenses (including actual attorneys' fees and disbursements and expenses of investigation and
defense), liens and other obligations (hereinafter individually, a "Loss" and collectively, "Losses") that
Buyer or any of its affiliates, directors, officers, or employees may suffer or incur which directly arise out of or directly result
from (i) any claim asserted for any liability with respect to the Sunkist Retirement Plan (“SRP Withdrawal Indemnity”),
(ii) any claim asserted for (1) any liability arising out of Seller's termination of the Sunkist License Agreement pursuant to
the terms of this Agreement (“Sunkist License Termination Indemnity”), (2) any inaccuracy in or breach of any representation
or warranty of Seller contained in this Agreement or in any other Transaction Document, (3) any breach of any covenant or agreement
of Seller in this Agreement or any other Transaction Document, or (4) any claim arising directly out of Seller's Business operations
or actions prior to the Final Closing Date, including employee claims and claims by any grower for whom Seller packed citrus fruit
prior to the Final Closing (jointly the “Seller General Indemnity”); provided, however, that (a) the
cumulative indemnification obligation of Seller for such Losses under Section 20.1(ii)(2) through (5), hereof shall in no event
exceed an aggregate amount equal to $3,000,000 (the “Cap”); provided, further, however,
(b) indemnification payments arising out of or in connection with fraud or intentional misrepresentation or under Section 20.1(i)
and (ii)(1) shall not be subject to the Cap, and (c) Seller will have no liability for indemnification unless and until the aggregate
Losses for which, but for this limitation, Seller would be required to indemnify pursuant to Section 20.1 hereof exceed $50,000
(the “Basket”), in which event Seller shall be required to indemnify for all Losses and not only those in excess
of the Basket; provided, however, indemnification payments arising out of or in connection with actual fraud or intentional
misrepresentation or the breach of Section 20.1(i) or 20.1 (ii) (1) shall not be subject to the Basket.

 

    	 	 	31

     

    

 

20.2         Indemnification
by Buyer.

 

(a)          From
and after the Initial Closing Date to the Indemnification Termination Date, defined in Section 20.3, hereof, applicable to the
Buyer General Indemnity, defined below, Buyer shall indemnify Seller, its partners, principals, affiliates, and employees and hold
them harmless from and against any and all Losses that Seller or any of its partners, principals, affiliates, and employees may
suffer or incur (including actual attorneys' fees and disbursements and expenses of investigation and defense) which arise out
of or result from (i) any inaccuracy in or breach of any representation, warranty or covenant of Buyer contained in this Agreement
or in any other Transaction Document, or (ii) any breach of any covenant or agreement of Buyer contained in this Agreement or in
any other Transaction Document (jointly the “Buyer General Indemnity”) .

 

(b)          The
party making a claim under this Article XX is referred to as the "Indemnified Party" and the party against whom such
a claim is asserted under this Article XX is referred to as the "Indemnifying Party."

 

20.3         Indemnification
Periods; Liability Limitations.

 

(a)          The
obligations of Seller and Buyer to indemnify and hold harmless the other of them under Sections 20.1 and 20.2, hereof, shall terminate
as follows: (i)(1) with regard to Seller’s indemnity obligations in connection with the SRP Withdrawal Indemnity upon the
expiration of two years following the Final Closing Date, and (2) with regard to Seller’s indemnity obligations in connection
with and the Sunkist License Termination Indemnity and the Seller General Indemnity, upon the expiration of one year following
the Final Closing Date, and (ii) with regard to Buyers’ indemnity obligations in connection with the Buyer General Indemnity,
upon the expiration of one year following the Final Closing Date (each an applicable “Indemnification Termination Date”)
except as to matters as to which Buyer or Seller, as the case may be, has made a claim for indemnification on or prior to the applicable
Indemnification Termination Date, in which case the right to indemnification with respect thereto will survive Indemnification
Termination Date until such claim for indemnification is finally resolved and any obligations with respect thereto are fully satisfied.
In each case, the period from the Initial Closing Date to the applicable Indemnification Termination Date is referred to herein
as the “Indemnification Period”).

 

(b)          Any
action or legal proceeding seeking to enforce any provision of this Agreement or any breach thereof or any negligent or intentional
misrepresentation by any party hereto, whether arising in law or in equity, shall be brought no later than two (2) years after
the Final Closing Date.

 

    	 	 	32

     

    

 

(c)          Notwithstanding
anything to the contrary contained in this Article XX or in any other provision(s) of this Agreement, at all times following the
Final Closing Date, without limitation, Buyer shall indemnify Seller, its partners, principals, affiliates, and employees and hold
them harmless from and against any and all Losses that Seller or any of its partners, principals, affiliates, and employees may
suffer or incur (including actual attorneys' fees and disbursements and expenses of investigation and defense) which arise out
of or result from (i) Buyer's operations and activities subsequent to the Final Closing Date, or (ii) the release of Hazardous
Material or violation of any Environmental Laws on the Property occurring after the Final Closing Date which do not constitute
a breach of Seller’s representations in Section 7.9, hereof.

 

20.4         Successor
Liability. The indemnification obligation provided for in this Article XX above shall be enforceable against the successors
and assigns of Seller or Buyer as the case may be.

 

20.5         Claims.

 

(a)          If
any legal proceedings are instituted or any claim or demand is asserted by any person prior to the end of the applicable Indemnification
Period, in respect of which an Indemnified Party may seek indemnification from the Indemnifying Party pursuant to the provisions
hereof, the Indemnified Party shall promptly cause written notice (the "Claim Notice") of the assertion of any such claim
or demand to be made to the Indemnifying Party; provided, however, that any failure to give such Claim Notice will
not be deemed a waiver of any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are actually
prejudiced thereby. The Indemnifying Party shall, at its expense, defend against, negotiate and settle any such claim and shall
retain counsel (who shall be reasonably acceptable to the Indemnified Party) and in such case the Indemnifying Party shall not
be liable for the fees and expenses of counsel employed by the Indemnified Party unless (x)‚ the Indemnifying Party and the
Indemnified Party shall have mutually agreed to the retention of such counsel or (y) the named parties of any such proceeding (including
any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing interests between them; provided, however,
that any Indemnified Party is hereby authorized, prior to the date on which it receives written notice from the Indemnifying Party
designating counsel, to retain counsel, whose fees and expenses shall be at the expense of the Indemnifying Party if indemnification
is appropriate hereunder, to file any motion, answer or other pleading and take such other action which it shall reasonably deem
necessary to protect its interests or those of the Indemnifying Party until the date on which the Indemnified Party receives such
notice from the Indemnifying Party. The parties agree to cooperate fully with each other in connection with the defense, negotiation
and settlement of any such legal proceeding, claim or demand; provided, however, that notwithstanding anything contained
herein to the contrary, a claim or demand shall not be settled by the Indemnifying Party if (i) such settlement might have a material
adverse effect on the business, operations or condition (financial or otherwise) of the Indemnified Party or (ii) the Losses to
the Indemnified Party are not fully covered by the indemnities provided herein. An Indemnifying Party shall be subrogated to all
rights and remedies of an Indemnified Party.

 

    	 	 	33

     

    

 

(b)          In
the event any Indemnified Party shall have a claim against any Indemnifying Party hereunder that does not involve a claim or demand
being asserted against or sought to be collected from it by a third party, the Indemnified Party shall send a Claim Notice with
respect to such claim to the Indemnifying Party. If the Indemnifying Party notifies the Indemnified Party within thirty (30) days
of receipt of the Claim Notice that it does not dispute such claim, the amount of such claim shall be conclusively deemed a liability
of the Indemnifying Party hereunder.

 

(c)          So
long as any right to indemnification exists pursuant to this Article XX, the affected parties each agree to retain all books, records,
accounts, instruments and documents reasonably related to the Claim Notice. In each instance the Indemnified party shall have the
right to be kept fully informed by the Indemnifying Party and its legal counsel with respect to any legal proceedings, and vice
versa. Any information or documents made available to any party hereunder which information is designated as confidential by the
party providing such information and which is not otherwise generally available to the public and not already within the knowledge
of the party to whom the information is provided (unless otherwise covered by the confidentiality provisions of any other agreement
among the parties hereto, or any of them) and, except as may be required by applicable law, shall not be disclosed to any third
person (except for the representatives of the party being provided with the information, in which event the party being provided
with the information shall request its representatives not to disclose any such information which is otherwise required hereunder
to be kept confidential).

 

20.6         Insurance.
Notwithstanding anything to the contrary, for purposes of determining
the amount of any Losses, such amount shall be reduced by the amount of any insurance proceeds actually received by the Indemnified
Person in respect of the Losses, net of any deductible amounts, costs of collection or recovery, increases in premiums and expenses
related thereto (collectively, “Insurance Benefits”). No Indemnified Person shall be required to institute any Action
against any Third Party in such Indemnified Person’s efforts to collect Insurance Benefits.         

 

ARTICLE XXI

 

GROWER RETENTION

 

21.1         Grower
Retention. Seller makes no representations or warranties that any of the citrus growers under contract with Seller (“Seller’s
Growers”) will contract with Buyer for packing their fruit following the Final Closing Date. Seller shall have no obligation
prior to or following the Final Closing to encourage or otherwise influence in any way Seller’s Growers to pack their fruit
through Buyer after the Final Closing. Seller shall do nothing, either prior to or subsequent to the Final Closing, to discourage
Seller’s Growers from packing their fruit through Buyer after the Final Closing.

 

    	 	 	34

     

    

 

XXII

 

CONFIDENTIALITY

 

22.1         Confidentiality.
The parties acknowledge that, subject to the provisions of Sections 5.5 and 24.14 hereof. (i) the existence and provisions of this
Agreement and all communications, negotiations, documents and agreements between the parties and the contents thereof are strictly
confidential and (ii) the Confidential Non-Disclosure Agreement dated February 1, 2018 executed by the parties is in full force
and effect, and continues to be fully applicable to the transactions provided for in this Agreement and Escrow and continues to
be binding upon the parties in accordance with its terms.

 

ARTICLE XXIII

 

NOTICES

 

23.1         Any
notice or other communication required or which may be given hereunder shall be in writing and shall be delivered personally, telegraphed,
telexed or sent by facsimile or email, or sent by certified, registered or express mail, postage prepaid, and shall be deemed given
when so delivered personally, telegraphed or telexed or sent by facsimile or email, or if mailed, two (2) days after the date of
mailing, to the following addresses (or such other addresses as shall be specified by like notices):

 

    	 	 	35

     

    

 

If to Buyer:

 

LIMONEIRA COMPANY

1141 Cummings Road

Santa Paula, CA 93060

Attn: Harold S. Edwards

 

With a copy to:

 

WALKER, WRIGHT, TYLER &
WARD

445 South Figueroa St., Suite
3100

Los Angeles, CA 90071

Attn: Lawrence E. Stickney,
Esq.

 

If to Seller:

 

OXNARD LEMON ASSOCIATES,
LTD.

2001 Sunkist Circle

Oxnard, CA 93033

Attn: Amy Fukutomi

 

With a copy to:

 

ANDERSON KREBHIEL & BRYAN

4250 Palomino Circle

Westlake Village, CA 91362

Attn: William A. Anderson,
Esq.

 

ARTICLE XXIV

 

MISCELLANEOUS

 

24.1         Governing
Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California
(regardless of the laws that might be applicable under principles of conflict of laws).

 

24.2         Assignment.
This Agreement may not be assigned by either party without the prior written consent of the other party; provided, however, that
Buyer may assign any of its rights and obligations hereunder without the prior consent of any Seller to any subsidiary of Buyer
by written notice to Seller of such assignment, after which the assignee shall have all of the rights and be subject to all of
the obligations hereunder, although Buyer shall not be released from such obligations as a result of such assignment.

 

    	 	 	36

     

    

 

24.3         Waiver.
No waiver by any party, whether express or implied, or any right under any provision of this Agreement shall constitute a waiver
of such party's right at any other time or a waiver of such party's rights under any other provision of this Agreement, unless
it is made in writing and signed by the party waiving the condition. No failure by any party hereto to take any action with respect
to any breach of this Agreement or default by the other party shall constitute a waiver of the other party's right to enforce any
provision of this Agreement or to take action with respect to such breach or default or of any subsequent breach or default by
such other party.

 

24.4         No
Benefit to Others. The representations, warranties, covenants and agreements contained in this Agreement are for the sole benefit
of the parties hereto and their successors and permitted assigns, except as otherwise expressly provided herein, and they shall
not be construed as conferring any rights on any other persons.

 

24.5         Signatories.
This Agreement shall be executed (i) on behalf of Seller by its Managing General Partner and (ii) on behalf of Buyer by its President,
or any Senior Vice President, and its Secretary, or any Assistant Secretary.

 

24.6         Successors.
This Agreement shall be binding upon and inure to the benefit of the Parties named herein and their respective successors and permitted
assigns.

 

24.7         Counterparts.
This Agreement may be executed in one or more counterparts (including by means of pdf, facsimile or other electronic transmission),
each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

24.8         Headings.
The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.

 

24.9         Entire
Agreement; Amendments.

 

(a)          This
Release sets forth the entire agreement between Buyer and Seller and supersedes any and all prior or contemporaneous agreements
or understandings between Buyer and Seller pertaining to the subject matter hereof. Buyer and Seller acknowledge (i) that no party,
nor any attorney or other representative of any party, has made any promise, representation or warranty whatever, express or implied,
not contained herein concerning the subject matter hereof, and (ii) that neither Buyer nor Seller executed this Agreement in reliance
on any such promise, representation or warranty not contained herein.

 

(b)          No
amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by Buyer and Seller.

 

24.10         Severability.
Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending
term or provision in any other situation or in any other jurisdiction.

 

    	 	 	37

     

    

 

24.11         Construction.
The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or
burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word “including” shall mean including without limitation.

 

24.12         No
Third-Party Beneficiaries. Except as set forth in Article XX (Indemnification; Claims), this Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

 

24.13         Attorneys’
Fees. If either party hereto fails to perform any of its obligations under this Agreement or if a dispute arises between the
parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the defaulting party or the party
not prevailing in such dispute shall pay any and all costs and expenses incurred by the other party on account of such default
and/or in enforcing or establishing its rights hereunder, including, without limitation, court costs and attorneys’ fees
and disbursements. Any such attorneys’ fees and other expenses incurred by either party in enforcing a judgment in its favor
under this Agreement shall be recoverable separately from and in addition to any other amount included in such judgment, and such
attorneys’ fees obligation is intended to be severable from the other provision of this Agreement and to survive and not
be merged into any such judgment

 

24.14         Disclosures.
Except for Buyer's disclosures on Form 8-K, Buyer's notification of NASDAQ and the Joint Press Release provided for above no disclosures
or public statements of anything relating or concerning this Agreement, shall be made except upon the prior written approval of
the other Party, which approval shall not be unreasonably withheld.

 

24.15         Time
is of the Essence. With regard to all dates and time periods set forth or referred to in this Agreement, time is of the essence.

 

ARTICLE XXV

DULY APPROVED

 

25.1         Buyer
and Seller Approval. This Agreement shall not be binding upon either of the
parties until duly approved by required action taken by both Seller and by Buyer's Board of Directors and executed by the appropriate
authorized representatives of both.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the dates stated below.

 

[Signature Page on Page 39]

 

    	 	 	38

     

    

 

	SELLER	 
	OXNARD LEMON ASSOCIATES, LTD	 

 

	By:	Cam Lem Investors, Ltd., a California limited partnership
	 	Managing General Partner

 

	 	By: Cam Lem, Inc., a California corporation
	 	its General Partner

 

	 	By:	/s/ Amy Fukutomi	 
	 	 	Amy Fukutomi, President	 

 

	Date: 	July 24, 2018	 
	 	 	 
	BUYER	 
	LIMONEIRA COMPANY	 
	 	 	 
	By:	/s/ Harold S. Edwards	 
	 	Harold S. Edwards, President	 
	 	 	 
	By:	/s/ Mark Palamountain	 
	 	Mark Palamountain, Secretary	 
	 	 	 
	Date: 	7-24-18	 

 

    	 	 	39

     

    

 

ACCEPTANCE BY

ESCROW HOLDER

 

Chicago Title, Oxnard, agrees to (a) accept
the foregoing ASSET PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS between Oxnard Lemon Associates, Ltd., a California limited partnership,
as Seller, and Limoneira Company, a Delaware corporation, as Buyer (the "Agreement"), (b) be Escrow Holder under the
Agreement, (c) be bound by the Agreement in the performance of its duties as Escrow Holder, and (d) certify that the date of Opening
of Escrow pursuant to Section 4.1 of this Agreement is      7/24/18     ,
2018 and the Escrow No. is      131 810687-12     .

 

	 	CHICAGO TITLE, OXNARD

 

	 	By:	/s/ Lisa Rowlands
	 	 	"Escrow Holder"

        CSEO

 

Date:      July
24     , 2018

 

    	 	 	40

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