8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 15, 2015

LANDEC CORPORATION

     (Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)

0-27446	94-3025618
(Commission file number)	(IRS Employer Identification No.)

3603 Haven Avenue, Menlo Park, California	94025
(Address of principal executive offices)	(Zip Code)

(650) 306-1650

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On May 15, 2015, Apio, Inc. (“Apio”), a wholly-owned subsidiary of the registrant, and Banc of America Leasing & Capital, LLC (“BofA”) entered into a Master Loan and Security Agreement (the “BofA Loan Agreement”), and the registrant and BofA entered into a Guaranty (the “Guaranty”). The BofA Loan Agreement and the Guaranty are each dated as of May 7, 2015, but the terms of the transaction were not finalized and did not become binding until May 15, 2015. The terms of the BofA Loan Agreement and the Guaranty are described in Item 2.03 of this Report, which is incorporated herein by reference.

Also on May 15, 2015, Apio and General Electric Capital Corporation (“GECC”) entered into a commitment letter (the “Commitment Letter”), the terms of which are described in Item 2.03 of this Report, which is incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Banc of America Leasing & Capital

On May 15, 2015, Apio and BofA entered into the BofA Loan Agreement, pursuant to which Apio will be permitted to borrow up to $15.0 million to finance equipment purchases made between October 1, 2014 and April 30, 2016 (the “BofA Loan”). Certain terms of the BofA Loan are set forth in a proposal letter dated April 2, 2015 between BofA, Apio and the registrant (the “BofA Proposal Letter”). Each borrowing under the BofA Loan will have a five-year term and a seven-year amortization period and will have a fixed interest rate based on the 2.5-year swap rate, as described in the BofA Proposal Letter. Borrowings will be secured by equipment financed with proceeds of the BofA Loan. In addition, on May 15, 2015, the registrant and BofA entered into the Guaranty, pursuant to which the registrant will guarantee Apio’s payment obligations under the BofA Loan.

The foregoing description of the BofA Loan Agreement and the Guaranty does not purport to be complete and is subject to, and qualified in its entirety by, reference to the BofA Proposal Letter, the BofA Loan Agreement, the form of Equipment Security Note referred to in the BofA Loan Agreement, and the Guaranty, copies of which are attached hereto as Exhibits 10.1 through 10.4, respectively, and the terms of which are incorporated herein by reference.

General Electric Capital Corporation

On May 15, 2015, GECC and Apio entered into the Commitment Letter, pursuant to which GECC committed to lend Apio up to approximately $14.7 million in equipment financing (the “Equipment Loan”) and approximately $7.7 million in real property financing (the “Real Property Loan”). The Equipment Loan and the Real Property Loan will be made pursuant to existing loan agreements dated as of April 23, 2012, as amended May 17, 2013 and July 17, 2014, among GECC, Apio, the registrant and other parties, which the registrant has filed previously in Form 8-K’s dated April 27, 2012 and July 21, 2014 (collectively, the “GECC Loan Agreements”).

The Equipment Loan replaces credit that is currently available under the GECC Loan Agreements. The Equipment Loan will be available to finance purchases of equipment between May 1, 2015 and June 30, 2017. Borrowings under the Equipment Loan will have a five-year term and a seven-year amortization. Interest on each borrowing under the Equipment Loan will be at a fixed rate based on an index rate plus a 5-year swap rate, as described in the Commitment Letter; the interest rate is currently 2.98% but may fluctuate before the Equipment Loan is fully drawn. Borrowings will be secured by equipment financed with the proceeds of the Equipment Loan and by a guaranty provided by the registrant as part of the GECC Loan Agreements.

2

The Real Property Loan will be used to finance the expansion of Apio’s facility in Hanover, PA. The Real Property Loan will have a 10-year term and a 20-year amortization. Interest will be at a fixed rate based on an index rate plus a 10-year swap rate, as described in the Commitment Letter; the interest rate is currently 4.19% but may fluctuate before Apio draws on the Real Property Loan. The Real Property Loan will be secured by Apio’s property and facilities in Hanover and by a guaranty provided by the registrant as part of the GECC Loan Agreements.

The foregoing description of the Equipment Loan and the Real Property Loan does not purport to be complete and is subject to, and qualified in its entirety by, reference to the Commitment Letter, a copy of which is attached hereto as Exhibit 10.5 and the terms of which are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)     Exhibits

The following exhibits are furnished as part of this report:

Exhibit No.	Description
10.1	Proposal Letter dated April 2, 2015 between Banc of America Leasing & Capital, LLC, Apio, Inc. and Landec Corporation.
10.2	Master Loan and Security Agreement dated as of May 7, 2015 between Apio, Inc. and Banc of America Leasing & Capital, LLC.
10.3	Form of Equipment Security Note between Apio, Inc. and Banc of America Leasing & Capital, LLC.
10.4	Guaranty dated as of May 7, 2015 between Landec Corporation and Banc of America Leasing & Capital, LLC.
10.5	Commitment Letter dated May 15, 2015 between General Electric Capital Corporation and Apio, Inc.
99.1	Press Release dated May 21, 2015

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    May 21, 2015

LANDEC CORPORATION
By:	/s/ Gregory S. Skinner
	Gregory S. Skinner
	Vice President of Finance and
	Administration and Chief Financial Officer

4

EXHIBIT INDEX

Exhibit No.	Description
10.1	Proposal Letter dated April 2, 2015 between Banc of America Leasing & Capital, LLC, Apio, Inc. and Landec Corporation.
10.2	Master Loan and Security Agreement dated as of May 7, 2015 between Apio, Inc. and Banc of America Leasing & Capital, LLC.
10.3	Form of Equipment Security Note between Apio, Inc. and Banc of America Leasing & Capital, LLC.
10.4	Guaranty dated as of May 7, 2015 between Landec Corporation and Banc of America Leasing & Capital, LLC.
10.5	Commitment Letter dated May 15, 2015 between General Electric Capital Corporation and Apio, Inc.
99.1	Press Release dated May 21, 2015

EX-10.1

Exhibit 10.1

Tanya Rhodes	Banc of America Leasing & Capital, LLC
Senior Vice President	CA5-705-04-01

555 California Street - 4^th Floor

San Francisco, CA94104

415.765.7385
415.343.0501

415.298.6540

tanya.rhodes@baml.com

April 2, 2015

Mr. Gregory Skinner

Chief Financial Officer

Landec Corporation

3603 Haven Ave

Menlo Park, CA 94025

Re: Loan Financing Proposal

Dear Gregory:

Banc of America Leasing & Capital, LLC ("BAL") is pleased to submit to Landec Corporation (the “Borrower”) the loan financing proposal described in the attached Summary of Principal Terms and Conditions (the "Term Sheet"). Please review the Term Sheet and contact me if you have any questions.

This proposal letter and the Term Sheet (collectively, the “Proposal”) include only a brief description of the principal terms of the proposed transaction, and are intended for discussion purposes only, and are subject to the satisfactory completion of BAL’s credit, legal and investment approval process. The Proposal (i) is not intended to and does not create any binding legal obligation on the part of either party, and (ii) is not to be construed as a commitment or offer by BAL or any related entity to enter into the proposed transaction. The terms and conditions of the Proposal, except for the provisions concerning the Proposal Fee, shall be superseded by and shall no longer be effective upon the earlier of (i) the issuance of a commitment letter by BAL with respect to the Proposal, or (ii) the execution and delivery of final legal documentation with respect to the Proposal.

The Proposal must be accepted on or before April 16, 2015 in order for BAL to proceed with its consideration of the Proposal. To accept the Proposal, please sign the enclosed copy of the Proposal and return it to my attention at Banc of America Leasing & Capital, LLC, CA5-705-04-01, 555 California Street - 4^th Floor, San Francisco, CA94104 together with a check in the amount of the Proposal Fee described in the Term Sheet.

Thank you for allowing us the opportunity to present the Proposal to Landec Corporation.

Very truly yours,

BANC OF AMERICA LEASING & CAPITAL, LLC

Tanya Rhodes

The undersigned, by its authorized representative below, accepts the Proposal, agrees to furnish BAL, its successors and assigns, any information relating to the business or financial condition of Landec Corporation or its affiliates, and authorizes BAL, Bank of America, N.A. and their affiliates to disclose to, discuss with and distribute such information (and any information they may already have) to any other affiliates or proposed assignees or successors of BAL.

APIO, INC. (as “Borrower”)

By: _________________________________                         

Title: ________________________________                          

Date: ________________________________                         

Federal ID No.: _______________________

LANDEC CORPORATION (as “Guarantor”)

By: _________________________________                         

Title: ________________________________                          

Date: ________________________________                         

Federal ID No.: _______________________

“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, leasing, equipment finance, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered broker-dealers and members of SIPC, and, in other jurisdictions, by locally registered entities.  Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured ●May Lose Value ●Are Not Bank Guaranteed. ©2014 Bank of America Corporation

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS

Date:	April 2, 2015
Borrower:	Apio, Inc., (the “Borrower”).
Guarantor(s):	Landec Corporation, (the “Guarantor”).
Lender:	Banc of America Leasing & Capital, LLC (“BAL”) or its designee (the “Lender”).

Collateral: The collateral consists of new equipment acceptable to the Lender (individually, an “Item of Equipment” and collectively, the “Collateral”).

Loan Amount: An amount not to exceed $30,000,000 which may, with the Lender’s prior consent, include soft costs such as freight, installation and taxes paid up-front by the Lender not exceeding 20% of the total cost, provided that in no event may the total cost exceed the fair market value of the Collateral (the “Loan Amount”).

Security Interest: The Lender shall have a first priority security interest in the Collateral.

Base Date: No later than April 30, 2016, (the “Base Date”).

Loan Term:	60 months from the Base Date, (the “Loan Term”).
Terms of Payment:	Option A: Variable Rate Option
	Borrower shall make 60 monthly installments of equal principal payments of 1.6667% of the Loan Amount plus interest in arrears. The “Interest Rate” in effect as of March 23, 2015 is 2.12%.
	Interest Rate Adjustment: Interest shall be paid monthly on the unpaid principal balance at a rate of 195 basis points above the one month LIBOR from the Bloomberg Daily Summary on the first business day of the month prior to the month in which the monthly principal installment is due.
	Option B: Fixed Rate Option
	The Borrower shall make 60 monthly payments, each equal to 1.7889% of the Loan Amount (the “Payment Factor”), and payable in arrears. The indicative Payment Factor is based on the 2.5 year Swap (the “Index”) of 1.10% based on the Bloomberg Daily Summary of March 23, 2015 (the “Index Rate”). The “Interest Rate” in effect as of March 23, 2015 is 2.82%. This indicative Payment Factor shall be subject to adjustment as set forth hereinafter.
	Interest Rate Adjustment: For Option B, the Interest Rate will be subject to a one time decrease or increase on or prior to the Base Date. Said increase or decrease shall be equal to the difference between the Index Rate referenced above, and the rate from the Bloomberg Daily Summary on or closest to the projected Base Date as determined by the Lender.

1

Please be advised that the proposed indicative pricing set forth above is only available for transactions that are fully funded or for specific collateral that has commenced funding under a progress payment agreement pursuant to this proposal within 180 days of the date of this Proposal. Thereafter, the Lender may at its discretion adjust its pricing to reflect adverse changes in its cost of funds or changes generally in market credit margins.

Progress Payments:

The Lender may approve partial payments (“Progress Payments”) from the signing of this proposal until April 30, 2016, (defined as the Utilization Period) to the equipment vendor or manufacturer before the Borrower’s acceptance of the equipment. Interest on such Progress Payments must be paid monthly and will accrue at the rate of 30-day LIBOR plus 125 bps divided by 360 days. If the equipment is not accepted under the Loan by the end of the Utilization Period, all applicable Progress Payments must be repaid together with accrued interest.

Prepayment: The Borrower may prepay all (but not less than all) of the outstanding principal balance of the loan, together with all interest and late charges accrued through the date of prepayment and a prepayment charge (expressed as a percentage of the outstanding loan balance) calculated as follows:

Prepayment	Prepayment
Month	Charge
1 – 12	3%
13 – 24	2%
25 – 36	0%
37 – 60	0%

	The loan may not be prepaid except as provided for in the loan documentation.
Filing Costs:	An invoice in the amount of $500 to cover the cost of UCC filings and searches will be included in the Borrower’s initial documentation package.

Documentation: All documentation for the Proposal must be acceptable to the Lender, and will contain such terms, conditions, representations, warranties and indemnities as are customary for transactions of this type.

Proposal Fee: By signing and returning the Proposal to the Lender, the Borrower agrees to the terms and conditions of the Proposal and agrees to pay a proposal fee in the amount of 0.50% of the Loan Amount (the "Proposal Fee"). The Proposal Fee is non-refundable in the event that the Lender approves and delivers to the Borrower a commitment for the transaction proposed herein (or as amended by mutual agreement of the parties). If the transaction is not approved by the Lender, the Proposal Fee shall be returned promptly, less the cost of credit verification and investigation and any out-of-pocket costs and expenses incurred by or any fees due to the Lender such as legal fees and appraisal costs.

2

Confidentiality: This Proposal is delivered to the Borrower with the understanding that neither it nor any of its terms and conditions will be disclosed to any persons or entities, except those having a confidential relationship with the Borrower in relation to the Proposal or where disclosure is required by law.

Market Disruption:	Notwithstanding anything contained herein to the contrary, in the event any material change shall occur in the financial markets after the date of this Proposal, including but not limited to any governmental action or other event which materially adversely affects the extension of credit by banks, leasing companies or other lending institutions, the Lender may modify the indicative pricing described above.
USA Patriot Act Compliance:	The Borrower acknowledges that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Patriot Act"), the Lender is required to obtain, verify and record information that identifies the Borrower, which information includes the name and address of the Borrower and other information that will allow the Lender to identify the Borrower in accordance with the Patriot Act.
Disclaimer:	The transaction contemplated by this Proposal may be syndicated or assigned in whole or in part to one or more institutions. The Borrower agrees not to engage any other capital providers for the same or similar financing for a period of 90 days from the date of acceptance of the Proposal. BAL is authorized to disclose to any prospective participant or assignee any information it has or may receive regarding the Borrower, any Guarantor(s), the Equipment or the Proposal. By accepting the Proposal, each of the Borrower and any Guarantor(s) acknowledges and agrees that: (a) in connection with all aspects of the transaction contemplated by the Proposal, the Borrower and any Guarantor(s) and BAL and any affiliate through which it or they may be acting (the “BA Parties” and each a “BA Party”), have an arm’s-length business relationship that creates no fiduciary, advisory or agency duty on the part of any BA Party and each expressly disclaims any fiduciary, advisory or agency relationship; and (b) conflicts of interest may arise among any BA Party, the Borrower, any Guarantor(s) and other participants in the Proposal due to their role(s) in the Proposal and the differing interests and relationships among themselves and other parties, and the BA Parties are under no duty to disclose such conflicts of interests; and (c) the BA Parties may receive compensation from other parties to the Proposal. To the fullest extent permitted by law, the Borrower and any Guarantor(s) hereby waive and release any claims that they may have against the BA Parties with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated by the Proposal.

3

Sharing of Information: The Borrower and any Guarantor acknowledge and agree that any information regarding the Borrower and any Guarantor or their respective partners, members or affiliates provided to any affiliate of the Lender by the Borrower or any Guarantor may be shared by said affiliate with the Lender. In addition, the Borrower and any Guarantor acknowledges and agrees that any information regarding the Borrower and any Guarantor or their respective partners, members or affiliates, the Lease and the Equipment provided to the Lender by the Borrower, any Guarantor or any affiliate of the Borrower may be shared by the Lender with its affiliates, agents and any potential or actual assignees. The Borrower and any Guarantor further acknowledges and agrees that the terms of this provision apply to all such information notwithstanding the fact that certain information may be confidential or subject to an agreement that would otherwise prohibit or limit the disclosure of such information in accordance with this provision. The Borrower and any Guarantor also acknowledge that BAL may use any image, chart, graph, logo or other information obtained from the Borrower‘s or Guarantor‘s web sites, annual reports, presentations, marketing materials or other materials provided by the Borrower or Guarantor and may include any such images or information in any confidential information materials furnished to actual or potential assignees or participants in the transaction.

4

EX-10.2

Exhibit 10.2

Banc of America Leasing & Capital, LLC  Master Loan and Security Agreement Number: 

This Master Loan and Security Agreement, dated as of April , 2015 (this “Agreement”), is by and between Banc of America Leasing & Capital, LLC, a Delaware limited liability company having an office at 2059 Northlake Parkway, 3 North, Tucker, GA 30084 (together with its successors and assigns, “Lender”), and Apio, Inc. (as “Borrower”), a corporation existing under the laws of the state of      , and having its chief executive office and any organizational identification number as specified with its execution of this Agreement below. Certain defined terms used herein are identified in bold face and quotation marks throughout this Agreement and in Section 14 below. This Agreement sets forth the terms and conditions for the financing of Equipment between Lender and Borrower pursuant to one or more --Equipment Notes” incorporating by reference the terms of this Agreement, together with all exhibits, addenda, schedules, certificates, riders and other documents and instruments executed and delivered in connection with such Equipment Note (as amended from time to time, an “Equipment Note”). Each Equipment Note constitutes a separate, distinct and independent financing of Equipment and contractual obligation of Borrower. This Agreement is not an agreement or commitment by Lender or Borrower to enter into any future Equipment Notes or other agreements, or for Lender to provide any financial accommodations to Borrower. Lender shall not be obligated under any circumstances to advance any progress payments or other funds for any Equipment or to enter into any Equipment Note if there shall have occurred a material adverse change in the operations, business, properties or condition, financial or otherwise, of Borrower or any Guarantor. This Agreement and each Equipment Note shall become effective only upon Lender’s acceptance and execution thereof at its corporate offices set forth above.

1.     Equipment Notes; Grant of Security Interest. Lender and Borrower agree to finance Equipment described in one or more Equipment Notes entered into from time to time, together with all other documentation from Borrower required by Lender with respect to such Equipment Note. Upon receipt of any item or group of Equipment intended for financing hereunder, Borrower shall execute an Equipment Note, with all information fully completed and irrevocably accepting such Equipment for Equipment Note, and deliver such Equipment Note to Lender for its review and acceptance. To secure the punctual payment and performance of Borrower’s Obligations under each Equipment Note and, as a separate grant of security, to secure the payment and performance of all other Obligations owing to Lender, Borrower grants to Lender a continuing security interest in all of Borrower's right, title and interest in and to all Equipment, together with: (i) all parts, attachments, accessories and accessions to, substitutions and replacements for, each item of Equipment; (ii) all accounts, chattel paper, and general intangibles arising from or related to any sale, lease, rental or other disposition of any Equipment to third parties, or otherwise resulting from the possession, use or operation of any Equipment by third parties, including instruments, investment property, deposit accounts, letter of credit rights, and supporting obligations arising thereunder or in connection therewith; (iii) all insurance, warranty and other claims against third parties with respect to any Equipment; (iv) all software and other intellectual property rights used in connection therewith; (v) proceeds of all of the foregoing, including insurance proceeds and any proceeds in the form of goods, accounts, chattel paper, documents, instruments, general intangibles, investment property, deposit accounts, letter of credit rights and supporting obligations; and (vi) all books and records regarding the foregoing, in each case, now existing or hereafter arising (the “Collateral”). Provided that there then exists no Event of Default, Lender’s security interest in Collateral subject to an Equipment Note shall terminate upon the payment and performance of all Obligations of Borrower under the applicable Equipment Note. Notwithstanding the grant of a security interest in any Collateral, Borrower shall have no right to sell, lease, rent, dispose or surrender possession, use or operation of any Equipment to any third parties without the prior written consent of Lender.

2.     Payments.      Each Equipment Note shall provide for scheduled “Payments” of principal and interest payable by Borrower to Lender in the amounts and at the times during the “Equipment Note Term” through and including the “Maturity Date”, all as provided in the Equipment Note. If any Payment or other amount payable hereunder is not paid within 10 days of its due date, Borrower shall pay an administrative late charge of 5% of the amount not timely paid. Such amount shall be payable in addition to all amounts payable by Borrower as a result of the exercise of any of the remedies herein provided. All Payments and other amounts payable under an Equipment Note shall be made in immediately available funds at Lender’s address above or such other place as Lender shall specify in writing. Except as specifically provided in the applicable Equipment Note, Borrower shall not have a right to prepay any Equipment Note. It is the intention of Lender to comply with all applicable usury laws and, accordingly, it is agreed that notwithstanding anything to the contrary contained herein or in any Equipment Note, in no event shall any provision herein or therein require or permit interest in excess of the maximum amount permitted by applicable law. If necessary to give effect to these provisions, Lender will, at its option, in accordance with applicable law, either refund any amount to Borrower to the extent in excess of that allowed by applicable law, or credit such excess amount against the then unpaid principal balance under the applicable Equipment Note(s). Unless otherwise provided herein, all amounts received under any Equipment Note will be applied, first, to accrued late charges, fees and other costs and expenses due and owing, second, to accrued interest and, third, to unpaid principal.

3.     Unconditional Financing; Disclaimer Of Warranties. Borrower’s Obligations under each Equipment Note (i) shall be non-cancelable, absolute and unconditional under all circumstances for the entire Equipment Note Term, (ii) shall be unaffected by the loss or destruction of any Equipment, and (iii) shall not be subject to any abatement, deferment, reduction, set-off, counterclaim, recoupment or defense for any reason whatsoever. LENDER IS NOT A VENDOR OR AGENT OF THE EQUIPMENT VENDOR, AND HAS NOT ENGAGED IN THE SALE OR DISTRIBUTION OF ANY EQUIPMENT. LENDER MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR WARRANTIES AS TO TITLE, MERCHANTABILITY, PERFORMANCE, CONDITION, EXISTENCE, FITNESS OR SUITABILITY FOR BORROWER'S PURPOSES OF ANY EQUIPMENT, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENTS, THE CONFORMITY OF THE EQUIPMENT TO THE DESCRIPTION THEREOF IN ANY EQUIPMENT NOTE OR ANY OTHER REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE EQUIPMENT. If Equipment is not delivered or properly installed, does not operate as warranted, becomes obsolete, or is unsatisfactory for any reason, Borrower shall make all claims on account thereof solely against Vendor and not against Lender. Borrower is solely responsible for the selection, shipment, delivery and installation of the Equipment and its Vendors, expressly disclaims any reliance upon any statements or representations made by Lender in connection therewith, and has received and approved the terms of any purchase orders, warranties, licenses or agreements with respect to the Equipment. To the extent that the manufacturer of Equipment provides any warranties with respect thereto, Borrower shall enforce such warranties and obtain at its own expense the customary services furnished by the manufacturer in connection with the Equipment.

1

4.     Use; Maintenance; Location; Inspection. Borrower shall: (i) use, operate, protect and maintain the Equipment (a) in good operating order, repair, condition and appearance, in the same condition as when received, ordinary wear and tear excepted, (b) consistent with prudent industry practice (but in no event less than the extent to which Borrower maintains other similar equipment in the prudent management of its assets and properties), and (c) in compliance with all applicable insurance policies, laws, ordinances, rules, regulations and manufacturer's recommended maintenance and repair procedures, and (ii) maintain comprehensive books and records regarding the use, operation, maintenance and repair of the Equipment. The Equipment shall be used only within the 48 contiguous United States, solely for business purposes (and not for any consumer, personal, home, or family purpose), and shall not be abandoned or used for any unlawful purpose. Borrower shall not discontinue use of any Equipment except for normal maintenance nor, through modifications, alterations or otherwise, impair the current or residual value, useful life, utility or originally intended function of any Equipment without Lender's prior consent. Any replacement or substitution of parts, improvements, upgrades, or additions to the Equipment during the Equipment Note Term shall be part of the Collateral subject to Lender’s security interest and subject to the Equipment Note, except that if no Event of Default exists, Borrower may at its expense remove improvements or additions provided by Borrower that can be readily removed without impairing the value, function or remaining useful life of the Equipment. Borrower shall not change the location or, in the case of over-the-road vehicles, the base of any Equipment specified in its Equipment Note without Lender's prior written consent. Lender shall have the right to enter any premises where Equipment is located and inspect it (together with related books and records) at any reasonable time.

5.     Loss and Damage. Borrower assumes all risk of (and shall promptly notify Lender in writing of any occurrence of) any damage to or loss, theft, confiscation or destruction of any Equipment from any cause whatsoever (a “Casualty”). If any Equipment suffers a Casualty which Lender determines is reparable, Borrower shall at its expense promptly place the same in good repair, condition or working order. If any Equipment suffers a Casualty which Lender determines is beyond repair or materially impairs its residual value (a “Total Loss”), Borrower shall at Lender’s option either (a) promptly replace such Equipment with a similar item reasonably acceptable to Lender having an equivalent value, utility and remaining useful life of such Equipment, whereupon such replacement items shall constitute Equipment and Collateral for all purposes hereunder and the applicable Equipment Note, or (b) on the Payment date following such Casualty pay Lender the Prepayment Amount for such Equipment, together with the Payment scheduled for payment on such date, and all accrued interest, late charges and other amounts then due and owing under the Equipment Note. Upon such payment following a Total Loss, the Equipment Note with respect to the Equipment suffering a Total Loss shall be deemed discharged, and Lender’s security interest in such Equipment shall terminate. If less than all Equipment under a Equipment Note suffers a Total Loss, (i) the Prepayment Amount with respect to any such item of Equipment shall be calculated by reference to the allocable portion of the unpaid principal balance of the applicable Equipment Note, as reasonably determined by Lender, and (ii) the remaining Payments under the Equipment Note shall be proportionately reduced as reasonably calculated by Lender upon Lender’s receipt of the payments described above.

6.     Insurance. Borrower, at its own expense, shall keep each item of Equipment insured against all risks for its replacement value, and in no event less than its Prepayment Amount, and shall maintain public liability and, with respect to any Equipment that is over-the-road vehicles, automotive liability insurance against such risks and for such amounts as Lender may require. All such insurance shall (a) be with companies rated “A-” or better by A.M. Best Company, in such form as Lender shall approve, (b) specify Lender and Borrower as insureds and provide that it may not be canceled or altered in any way that would affect the interest of Lender without at least 30 days' prior written notice to Lender (10 days' in the case of nonpayment of premium), (c) be primary, without right of contribution from any other insurance carried by Lender and contain waiver of subrogation and “breach of warranty” provisions satisfactory to Lender, (d) provide that all amounts payable by reason of loss or damage to Equipment shall be payable solely to Lender, unless Lender otherwise agrees, and (e) contain such other endorsements as Lender may reasonably require. Borrower shall provide Lender with evidence satisfactory to Lender of the required insurance upon the execution of any Equipment Note and promptly upon any renewal of any required policy.

7.     Indemnities; Taxes. Borrower's indemnity and reimbursement obligations set forth below shall survive the cancellation, termination or expiration of any Equipment Note or this Agreement.

(a) General Indemnity. Borrower shall indemnify, on an after-tax basis, defend and hold harmless Lender and its respective officers, directors, employees, agents and Affiliates (“Indemnified Persons”) against all claims, liabilities, losses and expenses whatsoever (except those determined by final decision of a court of competent jurisdiction to have been directly and primarily caused by the Indemnified Person's gross negligence or willful misconduct), including court costs and reasonable attorneys' fees and expenses (together, “Attorneys’ Fees”), in any way relating to or arising out of the Equipment or any Equipment Note at any time, or the ordering, acquisition, rejection, installation, possession, maintenance, use, ownership, condition, destruction or return of the Equipment, including any claims based in negligence, strict liability in tort, environmental liability or infringement.

(b) General Tax Indemnity. Borrower shall pay or reimburse Lender, and indemnify, defend and hold Lender harmless from, on an after-tax basis, all taxes, assessments, fees and other governmental charges paid or required to be paid by Lender or Borrower in any way arising out of or related to the Equipment or any Equipment Note before or during the Equipment Note Term or after the Equipment Note Term following an Event of Default, including foreign, Federal, state, county and municipal fees, taxes and assessments, and property, value-added, sales, use, gross receipts, excise, stamp and documentary taxes, and all related penalties, fines, additions to tax and interest charges (“Impositions”), excluding only Federal and state taxes based on Lender's net income. Upon Lender's request, Borrower shall furnish proof of its payment of any Imposition.

8.     Borrower Representations and Agreements. Borrower represents, warrants and agrees that: (a) Borrower has had for the previous 5 years (except as previously disclosed to Lender in writing) the legal name and form of business organization in the state described above; (b) Borrower’s chief executive office and notice address, taxpayer identification number and any organizational identification number is as described with its execution of this Agreement below; (c) Borrower shall notify Lender in writing at least 30 days before changing its legal name, state of organization, chief executive office location or organizational identification number; (d) Borrower is duly organized and existing in good standing under the laws of the state described above and all other jurisdictions where legally required in order to carry on its business, shall maintain its good standing in all such jurisdictions, and shall conduct its businesses and manage its properties (and cause each of its Affiliates to conduct its businesses and manage its properties) in compliance with all applicable laws, rules or regulations binding, in any jurisdiction, on Borrower and its Affiliates including, without limitation, all anti-money laundering laws and regulations; (e) the execution, delivery and performance of this Agreement, each Equipment Note and Related Agreement to which it is a party has been duly authorized by Borrower, each of which are and will be binding on and enforceable against Borrower in accordance with their terms, and do not and will not contravene any other instrument or agreement binding on Borrower; and (f) there is no pending litigation, tax or environmental claim, proceeding, dispute or regulatory or enforcement action (and Borrower shall promptly notify Lender of any of the same that may hereafter arise) that may adversely affect any Equipment or Borrower's financial condition or impair its ability to perform its Obligations.

2

9.     Title; Personal Property. Borrower shall be the sole owner of Equipment free and clear of all liens or encumbrances, other than Lender’s rights under the Equipment Note. Borrower will not create or permit to exist any lien, security interest, charge or encumbrance on any Equipment except those in favor of Lender. The Equipment shall remain personal property at all times, notwithstanding the manner in which it may be affixed to realty. Borrower shall obtain and record such instruments and take such steps as may be necessary to (i) prevent any creditor, landlord, mortgagee or other entity (other than Lender) from having any lien, charge, security interest or encumbrance on any Equipment, and (ii) ensure Lender's right of access to and removal of Equipment in accordance with the terms hereof.

10.     Default. Each of the following (a “Default”) shall, with the giving of any notice or passage of any time period specified, constitute an “Event of Default” hereunder and under all Equipment Notes: (1) Borrower fails to pay any Payments or other amount owing under any Equipment Note within 10 days of its due date; (2) Borrower fails to maintain insurance as required herein, or sells, leases, assigns, conveys, or suffers to exist any lien, charge, security interest or encumbrance on, any Equipment without Lender's prior consent, or any Equipment is subjected to levy, seizure or attachment; (3) Borrower fails to perform or comply with any other covenant or obligation under any Equipment Note or Related Agreement and, if curable, such failure continues for 30 days after written notice thereof by Lender to Borrower; (4) any representation, warranty or other written statement made to Lender by Borrower in connection with this Agreement, any Equipment Note, Related Agreement or other Obligation, or by any Guarantor pursuant to any Guaranty (including financial statements) proves to have been incorrect in any material respect when made; (5) Borrower (w) enters into any merger or consolidation with, or sells or transfers all or any substantial portion of its assets to, or enters into any partnership or joint venture other than in the ordinary course of business with, any entity, (x) dies (if a natural person), dissolves, liquidates or ceases or suspends the conduct of business, or ceases to maintain its existence, (y) if Borrower is a privately held entity, enters into or suffers any transaction or series of transactions as a result of which Borrower is directly or indirectly controlled by persons or entities not directly or indirectly controlling Borrower as of the date hereof, or (z) if Borrower is a publicly held entity, there shall be a change in the ownership of Borrower's stock or other equivalent ownership interest such that Borrower is no longer subject to the reporting requirements of, or no longer has a class of equity securities registered under, the Securities Act of 1933 or the Securities Exchange Act of 1934; (6) Borrower undertakes any general assignment for the benefit of creditors or commences any voluntary case or proceeding for relief under the federal bankruptcy code, or any other law for the relief of debtors, or takes any action to authorize or implement any of the foregoing; (7) the filing of any petition or application against Borrower under any law for the relief of debtors, including proceedings under the federal bankruptcy code, or for the subjection of property of Borrower to the control of any court, receiver or agency for the benefit of creditors if such petition or application is consented to by Borrower or is otherwise not dismissed within 60 days from the date of filing; (8) any default occurs under any other lease, credit or other agreement or instrument to which Borrower and Lender or any Affiliate of Lender are now or hereafter party; (9) any default occurs under any other agreement or instrument to which Borrower is a party and under which there is outstanding, owing or committed an aggregate amount greater than $100,000; (10) any attempted repudiation, breach or default of any Guaranty; or (11) the occurrence of any event described in clauses (4) through (9) above with reference to any Guarantor or any controlling shareholder, general partner or member of Borrower. Borrower shall promptly notify Lender in writing of any Default or Event of Default.

11.     Remedies. (a) Upon the occurrence of an Event of Default, Lender may, in its discretion, exercise any one or more of the following remedies with respect to any or all Equipment Notes or Equipment: (1) accelerate the maturity of any Equipment Note and declare the Prepayment Amount thereof to be immediately due and payable together with any other unpaid principal, accrued interest or other amounts due and owing thereunder; (2) cause Borrower to promptly discontinue use of or disable any Equipment, and, at Borrower’s expense, have the Equipment assembled, prepared and adequately protected for shipment (together with all related manuals, documents and records, and any other Collateral), and either surrendered to Lender in place or shipped (freight and insurance pre-paid) to such location as Lender may designate within the forty-eight contiguous United States, in the condition required under Section 4 hereof, qualified for the manufacturer’s (or its authorized servicing representative’s) then available service contract or warranty, and able to be put into immediate service and to perform at manufacturer's rated levels (if any); (3) remedy such Event of Default or proceed by court action, either at law or in equity, to enforce performance of the applicable provisions of any Equipment Note; (4) with or without court order, enter upon the premises where Equipment is located and repossess and remove the same, all without liability for damage to such premises or by reason such entry or repossession, except for Lender's gross negligence or willful misconduct; (5) dispose of any Equipment in a public or private transaction, or hold, use, operate or keep idle the Equipment, free and clear of any rights or interests of Borrower therein; (6) recover direct, incidental, consequential and other damages for the breach of any Equipment Note, including the payment of all unpaid principal, accrued interest and other amounts payable thereunder, and all costs and expenses incurred by Lender in exercising its remedies or enforcing its rights thereunder (including all Attorneys’ Fees); (7) without notice to Borrower, apply or set-off against any Obligations all security deposits, advance payments, proceeds of letters of credit, certificates of deposit (whether or not matured), securities or other additional collateral held by Lender or otherwise credited by or due from Lender to Borrower; or (8) pursue all other remedies provided under the UCC or other applicable law. Borrower shall pay interest equal to the lesser of (a) 12% per annum, or (b) the highest rate permitted by applicable law (“Default Rate”) on (i) any amount other than Payments owing under any Equipment Note and not paid when due, (ii) any Payment not paid within 30 days of its due date, and (iii) any amount required to be paid upon acceleration of any Equipment Note under this Section 11. Any payments received by Lender after an Event of Default, including proceeds of any disposition of Equipment, shall be applied in the following order: (A) to all of Lender's costs (including Attorneys’ Fees), charges and expenses incurred in taking, removing, holding, repairing and selling or leasing the Equipment or other Collateral or enforcing the provisions hereof; (B) to the satisfaction of all outstanding Obligations; and (C) the balance, if any, shall be disbursed to Borrower unless otherwise required by law. Lender shall account to Borrower for any surplus realized upon such sale or other disposition, and Borrower shall remain liable for any deficiency with respect to the Obligations.

(b) No remedy referred to in this Section 11 shall be exclusive, each shall be cumulative (but not duplicative of recovery of any Obligation) and in addition to any other remedy referred to above or otherwise available to Lender at law or in equity, and all such remedies shall survive the acceleration of any Equipment Note. Lender’s exercise or partial exercise of, or failure to exercise, any remedy shall not restrict Lender from further exercise of that remedy or any other available remedy. No extension of time for payment or performance of any Obligation shall operate to release, discharge, modify, change or affect the original liability of Borrower for any Obligations, either in whole or in part. Lender may proceed against any Collateral or Guarantor, or may proceed contemporaneously or in the first instance against Borrower, in such order and at such times following an Event of Default as Lender determines in its sole discretion. In any action to repossess any Equipment or other Collateral, Borrower waives any bonds and any surety or security required by any applicable laws as an incident to such repossession. Notices of Lender's intention to accelerate, acceleration, nonpayment, presentment, protest, dishonor, or any other notice whatsoever (other than notices of Default specifically required of Lender pursuant to Section 10 above) are waived by Borrower and any Guarantor. Any notice given by Lender of any disposition of Collateral or other intended action of Lender which is given in accordance with this Agreement at least 5 business days prior to such action, shall constitute fair and reasonable notice of such action.

3

12. Assignment. Lender and any Assignee may assign or transfer any of Lender's interests in any Equipment Note or Equipment without notice to Borrower,. Borrower agrees that: (i) the rights of any Assignee shall not be affected by any breach or default of Lender or any prior Assignee, and Borrower shall not assert any defense, rights of set-off or counterclaim against any Assignee, nor hold or attempt to hold such Assignee liable for any such breach or default; (ii) unless otherwise agreed by Lender and Assignee, Lender shall have no duties or responsibilities as a secured party with respect to the applicable Equipment or Collateral after such assignment and Lender shall be released from such duties or responsibilities, and (iii) Borrower shall execute and deliver upon request such additional documents, instruments and assurances as Lender deems necessary in order to (y) acknowledge and confirm all of the terms and conditions of any Equipment Note and Lender's or such Assignee’s rights with respect thereto, and Borrower’s compliance with all of the terms and provisions thereof, and (z) preserve, protect and perfect Lender’s or Assignee’s right, title or interest hereunder and in any Equipment, including, without limitation, such UCC financing statements or amendments, control agreements, corporate or member resolutions, votes, notices of assignment of interests, and confirmations of Borrower’s obligations and representations and warranties with respect thereto as of the dates requested. Lender may disclose to any potential Assignee any information regarding Borrower, any Guarantor and their Affiliates. Borrower shall not sell, assign, pledge, hypothecate or in any way dispose of any of its rights or obligations under any Equipment Note, or enter into any lease of any Equipment, without Lender's prior written consent. Any purported sale, assignment, pledge, hypothecation, disposal or lease by Borrower made without Lender’s prior written consent shall be null and void.

13.     Financial and Other Data. (a) During any Equipment Note Term, Borrower shall (i) maintain books and records in accordance with generally accepted accounting principles consistently applied (“GAAP”) and prudent business practice; (ii) promptly provide Lender, within 120 days after the close of each fiscal year, and, upon Lender's request, within 45 days of the end of each quarter of Borrower's and any Guarantor’s fiscal year, a copy of financial statements for Borrower and each Guarantor requested by Lender, in each case prepared in accordance with GAAP and (in the case of annual statements) audited by independent certified public accountants and (in the case of quarterly statements) certified by the chief financial officer of Borrower or Guarantor, as applicable; provided, however, that for so long as Borrower or any such Guarantor is legally and timely filing annual and quarterly financial reports on Forms 10-K and 10-Q with the Securities and Exchange Commission which are readily available to the public, the filing of such reports shall satisfy the foregoing financial statement reporting requirements for such entity; and (iii) furnish Lender all other financial information and reports and such other information as Lender may reasonably request concerning Borrower, any Guarantor and their respective affairs, or the Equipment or its condition, location, use or operation.

(b) Borrower represents and warrants that all information and financial statements at any time furnished by or on behalf of Borrower or any Guarantor are accurate and reasonably reflect as of their respective dates, results of operations and the financial condition of Borrower, such Guarantor or other entity they purport to cover. Credit and other information regarding Borrower, any Guarantor or their Affiliates, any Equipment Note or Equipment may be disclosed by Lender to its Affiliates, agents and potential Assignees, notwithstanding anything contained in any agreement that may purport to limit or prohibit such disclosure.

14.     Definitions

As used herein, the following terms shall have the meanings assigned or referred to them below:

“Affiliate” means any entity controlling, controlled by or under common control with the referent entity; “control” includes (i) the ownership of 25% or more of the voting stock or other ownership interest of any entity and (ii) the status of a general partner of a partnership or managing member of a limited liability company.

“Assignee” means any assignee or transferee of all or any of Lender’s right, title and interest in any Equipment Note or any Equipment.

“Code” means the Internal Revenue Code of 1986, as amended.

“Equipment” means the items, units and groups of personal property, licensed materials and fixtures described in each Equipment Note, together with all replacements, parts, additions, accessories and substitutions therefor; and “item of Equipment” means a commercial unit of such property which in commercial usage is treated as a single whole, division of which materially impairs its character or value on the market or in use, and includes each functionally integrated and separately marketable group or unit of Equipment and may be a single article (such as a machine) or a set of articles (such as a suite of furniture or a line of machinery).

“Guarantor” means any guarantor, surety, endorser, general partner or co-lessee of Borrower, or other party liable in any capacity, or providing additional collateral security for, the payment or performance of any Obligations of Borrower.

“Guaranty” means any guaranty, surety instrument, security, indemnity, “keep-well” agreement or other instrument or arrangement from or with any Guarantor.

“Obligations” means and includes all obligations of Borrower owing to Lender under this Agreement, any Equipment Note or Related Agreement, or of any Guarantor owing to Lender under any Guaranty, together with all other obligations, indebtedness and liabilities of Borrower to Lender under any other financings, leases, loans, notes, progress payment agreements, guaranties or other agreements, of every kind and description, now existing or hereafter arising, direct or indirect, joint or several, absolute or contingent, whether for payment or performance, regardless of how the same may arise or by what instrument, agreement or book account they may be evidenced, including without limitation, any such obligations, indebtedness and liabilities of Borrower to others which may be obtained by Lender through purchase, negotiation, discount, transfer, assignment or otherwise.

“Prepayment Amount” means, collectively, the entire unpaid principal balance of any Equipment Note as of any particular date, together with (a) all accrued interest and other charges then owing under such Equipment Note, and (b) the prepayment charge provided in the applicable Equipment Note, if any.

4

“Related Agreement” means and includes any Guaranty and any approval letter or progress payment, assignment, security or other agreement or addendum related to this Agreement, any Equipment Note or any Collateral to which Borrower or any Guarantor is a party.

“UCC” means the Uniform Commercial Code in effect in the state specified in Section 15(f) of this Agreement.

“Vendor” means the manufacturer, distributor, supplier or other seller (whether or not a merchant or dealer) of the Equipment and any sales representative or agent thereof.

15.     Miscellaneous. (a) At Lender's request, Borrower shall execute, deliver, file and record such financing statements and other documents as Lender deems necessary to protect Lender's interest in the Equipment and to effectuate the purposes of any Equipment Note or Related Agreement, and Borrower authorizes, and irrevocably appoints Lender as its agent and attorney-in-fact, with right of substitution and coupled with an interest, to (i) execute, deliver, file, and record any such item, and to take such action for Borrower and in Borrower's name, place and stead, (ii) make minor corrections to manifest errors in factual data in any Equipment Note and any addenda, attachments, exhibits and riders thereto, and (iii) after the occurrence of an Event of Default, enforce claims relating to the Equipment against insurers, Vendors or other persons, and to make, adjust, compromise, settle and receive payment under such claims; but without any obligation to do so.

(b)     Federal law requires all financial institutions to obtain, verify and record information that identifies each entity that obtains a loan or other financial accommodation. The first time Borrower requests a financial accommodation from Lender, the Lender may ask for Borrower’s (or any Guarantor’s) legal name, address, tax ID number and other identifying information. Borrower shall promptly provide copies of business licenses or other documents evidencing the existence and good standing of Borrower or any Guarantor requested by Lender.

(c) Time is of the essence in the payment and performance of all of Borrower’s Obligations under any Equipment Note or Related Agreement. This Agreement, and each Equipment Note or Related Agreement may be executed in one or more counterparts, each of which shall constitute one and the same agreement. All demands, notices, requests, consents, waivers and other communications concerning this Agreement and any Equipment Note or Related Agreement shall be in writing and shall be deemed to have been duly given when received, personally delivered or three business days after being deposited in the mail, first class postage prepaid, or the business day after delivery to an express carrier, charges prepaid, addressed to each party at the address provided herein, or at such other address as may hereafter be furnished in writing by such party to the other.

(d) Except as otherwise agreed between Borrower and Lender in writing, Borrower shall reimburse Lender upon demand for costs and expenses incurred by Lender in connection with the execution and delivery of this Agreement, any Equipment Note or Related Agreement. Borrower shall reimburse Lender on demand for all costs (including Attorneys’ Fees) incurred by Lender in connection with Borrower’s exercise of any purchase or extension option under any Equipment Note, or any amendment or waiver of the terms of this Agreement or any Equipment Note or Related Agreement requested by Borrower.

(e) Any provisions of this Agreement or any Equipment Note or Related Agreement which are unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such unenforceability without invalidating the remaining provisions thereof, and any such unenforceability shall not render unenforceable such provisions in any other jurisdiction. Any requirement for the execution and delivery of any document, instrument or notice may be satisfied, in Lender’s discretion, by authentication as a record within the meaning of, and to the extent permitted by, Article 9 of the UCC.

(f) THIS AGREEMENT AND ANY EQUIPMENT NOTE OR RELATED AGREEMENT, AND THE LEGAL RELATIONS OF THE PARTIES THERETO, SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF RHODE ISLAND, WITHOUT REGARD TO CHOICE OF LAW PRINCIPLES; THE PARTIES CONSENT AND SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS OF SUCH STATE FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING THEREFROM, AND EXPRESSLY WAIVE ANY OBJECTIONS THAT IT MAY HAVE TO THE VENUE OF SUCH COURTS. THE PARTIES EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT THERETO. IN NO EVENT SHALL LENDER HAVE ANY LIABILITY TO BORROWER FOR INCIDENTAL, GENERAL, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES. Any cause of action by Borrower against Lender relating to this Agreement or any Equipment Note or Related Agreement shall be brought within one year after any such cause of action first arises, and Borrower hereby waives the benefit of any longer period provided by statute.

(g)     EACH EQUIPMENT NOTE, TOGETHER WITH THIS AGREEMENT AND ANY RELATED AGREEMENTS, (i) CONSTITUTES THE FINAL AND ENTIRE AGREEMENT BETWEEN THE PARTIES SUPERSEDING ALL CONFLICTING TERMS OR PROVISIONS OF ANY PRIOR PROPOSALS, APPROVAL LETTERS, TERM SHEETS OR OTHER AGREEMENTS OR UNDERSTANDINGS BETWEEN THE PARTIES, (ii) MAY NOT BE CONTRADICTED BY EVIDENCE OF (y) ANY PRIOR WRITTEN OR ORAL AGREEMENTS OR UNDERSTANDINGS, OR (z) ANY CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS BETWEEN THE PARTIES; and (iii) MAY NOT BE AMENDED, NOR MAY ANY RIGHTS THEREUNDER BE WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY CHARGED WITH SUCH AMENDMENT OR WAIVER.

In Witness Whereof, Lender and Borrower have executed this Agreement as of the date first above written.

BANC OF AMERICA LEASING & CAPITAL, LLC (Lender)	APIO, INC.  (Borrower)
By:                 Print Name:  Title:	By:                       Print Name:         Title:                     Taxpayer ID # :    _______________________  Org. ID # (if any) _______________________ Chief Executive Office:    3603 Haven Ave.                      Menlo Park, CA 94025                     Attention: _______________________

5

EX-10.3

Exhibit 10.3

Banc of America Leasing & Capital, LLC Equipment Security Note Number    

This Equipment Security Note No.      , dated as of      , 201 (this “Equipment Note”), is entered into pursuant to and incorporates by this reference all of the terms and provisions of that certain Master Loan and Security Agreement No.      -      dated as of April __, 2015 (the “Master Agreement”), by and between Banc of America Leasing & Capital, LLC (“Lender”) and                                    Apio, Inc. (“Borrower”). All capitalized terms used herein and not defined herein shall have the respective meanings assigned to such terms in the Master Agreement. If any provision of this Equipment Note conflicts with any provision of the Master Agreement, the provisions contained in this Equipment Note shall prevail. Borrower hereby authorizes Lender to insert the serial numbers and other identification data of the Equipment, dates, and other omitted factual matters or descriptions in this Equipment Note.

The occurrence of an “Event of Default,” as defined in the Master Agreement, shall entitle Lender to accelerate the maturity of this Equipment Note and to declare the Prepayment Amount to be immediately due and payable, and to proceed at once to exercise each and every one of the remedies provided in the Master Agreement or otherwise available at law or in equity. All of Borrower's Obligations under this Equipment Note are absolute and unconditional, and shall not be subject to any offset or deduction whatsoever. Borrower waives any right to assert, by way of counterclaim or affirmative defense in any action to enforce Borrower's Obligations hereunder, any claim whatsoever against Lender.

1.     Equipment Financed; Equipment Location; Grant of Security Interest. Subject to the terms and provisions of the Master Agreement and as provided herein, Lender is providing financing in the principal amount described in Section 2 below to Borrower in connection with the acquisition or financing of the following described Equipment:

Quantity	Description	Serial Number	Cost
Location of Equipment. The Equipment will be located or (in the case of over-the-road vehicles) based at the following locations:

Location Address City County State ZIP

Borrower has agreed and does hereby grant a security interest in and to the Equipment and the Collateral related thereto, whether now owned or hereafter acquired and wherever located, in order to secure the payment and performance of all Obligations owing to Lender, including but not limited to this Equipment Note, all as more particularly provided in the Master Agreement. Lender's agreement to provide the financing contemplated herein shall be subject to the satisfaction of all conditions established by Lender and Lender's prior receipt of all required documentation in form and substance satisfactory to Lender in its sole discretion.

2.     Payments. For value received, Borrower promises to pay to the order of Lender, the principal amount of $________, together with interest thereon as provided herein. This Equipment Note shall be payable by Borrower to Lender in 60 consecutive monthly installments of principal and interest (the “Payments”) commencing on _____________________, _____ (the “Initial Payment”) and continuing thereafter through and including the Maturity Date (as defined below) (collectively, the “Equipment Note Term”). Each Payment shall be in the amount provided below, and due and payable on the same day of the month as the Initial Payment set forth above in each succeeding payment period (each, a “Payment Date” and the final such scheduled Payment Date, the “Maturity Date”) during Equipment Note Term. All interest hereunder shall be calculated on the basis of a year of 360 days comprised of 12 months of 30 days each. The final Payment due and payable on the Maturity Date shall in any event be equal to the entire outstanding and unpaid principal amount of this Equipment Note, together with all accrued and unpaid interest, charges and other amounts owing hereunder and under the Master Agreement.

(a) Interest Rate.

A {use for Fixed Interest Rate} Interest shall accrue on the entire principal amount of this Equipment Note outstanding from time to time at a fixed rate of       percent (     %) per annum or, if less, the highest rate of interest permitted by applicable law (the “Interest Rate”), from the Advance Date set forth below until the principal amount of this Equipment Note is paid in full, and shall be due and payable on each Payment Date.

Page 1 of 2

B {use for Variable Rate – LIBOR plus %} Interest shall accrue on the entire principal amount of this Equipment Note outstanding for any calendar {month/quarter} or portion thereof, at a per annum rate of interest equal to (i)       and      /100 percent (     %) plus the rate of interest equal to the “average of interbank offered rates for dollar deposits in the London Market based on quotations of sixteen (16) major banks” for a term of       days as published in the Wall Street Journal under a heading entitled “Money Rates, London Interbank Offered Rates (LIBOR)” or any future or substitute heading, on the first day of the month (if the Payments are due on the 1^st through the 15^th of the month) or the fifteenth day of the month (if the Payments are due on the 16^th through the 30^th day of the month) preceding the Payment Date for the applicable Payment, or (ii) if less, the highest rate of interest permitted by applicable law (the “Interest Rate”) from the Advance Date set forth below until the principal amount of this Equipment Note is paid in full, and shall be due and payable on each Payment Date.

(b) Payment Amount.

A {use for fixed interest and level principal and interest payments} The principal and interest amount of each Payment shall be $_______.

B {use for variable interest and level principal payments} The amount of each Payment shall consist of $_______ of principal, plus all interest accrued at the Interest Rate.

3.     Prepayment. Borrower may prepay all (but not less than all) of the outstanding principal balance of this Equipment Note on a scheduled Payment Date upon 30 days prior written notice from Borrower to Lender, provided that any such prepayment shall be made together with (a) all accrued interest and other charges and amounts owing hereunder through the date of prepayment, and (b) a prepayment premium of 3% of the principal amount prepaid if prepaid during months 1-24, 2% of the principal amount prepaid if prepaid during months 25-36, and 0% thereafter; provided, however, that, if any prepayment of this Equipment Note is made following an Event of Default, by reason of acceleration or otherwise, the prepayment charge shall be calculated based upon the full original Equipment Note Term.

4.     Borrower Acknowledgements. Upon delivery and acceptance of the Equipment, Borrower shall execute this Equipment Note evidencing the amounts financed by Lender in respect of such Equipment and the Payments of principal and interest hereunder. By its execution and delivery of this Equipment Note, Borrower:

(a)     reaffirms of all of Borrower’s representations, warranties and covenants as set forth in the Master Agreement and represents and warrants that no Default or Event of Default under the Master Agreement exists as of the date hereof;

(b)     represents, warrants and agrees that: (i) the Equipment has been delivered and is in an operating condition and performing the operation for which it is intended to the satisfaction of Borrower; (ii) each item of Equipment has been unconditionally accepted by Borrower for all purposes under the Master Agreement and this Equipment Note; and (iii) there has been no material adverse change in the operations, business, properties or condition, financial or otherwise, of Borrower or any Guarantor since      ;

(c)     authorizes and directs Lender (i) to advance the principal amount of this Equipment Note to reimburse Borrower or pay Vendors all or a portion of the purchase price of Equipment in accordance with Vendors’ invoices therefor, receipt and approval of which are hereby reaffirmed by Borrower, and (ii) to enter the date of such advance below Lender’s signature as the “Advance Date” for all purposes hereof; and

(d)     agrees that Borrower is absolutely and unconditionally obligated to pay Lender all Payments at the times and in the manner set forth herein.

BANC OF AMERICA LEASING & CAPITAL, LLC By: _________________________________________ Printed Name: ________________________________ Title: _______________________________________  Advance Date: ________________________________ Borrower: APIO, INC. By: ______________________________________________ Printed Name: _____________________________________ Title: ____________________________________________

Page 2 of 2

EX-10.4

Exhibit 10.4

Banc of America Leasing & Capital, LLC  GUARANTY

This Guaranty (this “Guaranty”) is executed and delivered as of the date set forth below by the undersigned guarantor (the “Guarantor”) in favor of Banc of America Leasing & Capital, LLC (“BALC”). BALC may, from time to time, enter into agreements with Apio, Inc. (“Customer”). The term “Customer,” if defined to include more than one party, shall mean “Customer and each of them” and this Guaranty shall secure payment of all of their respective Obligations (hereinafter defined) to BALC. BALC is unwilling to enter into such agreements with Customer, unless Guarantor absolutely and unconditionally guarantees to BALC the payment and performance of all obligations of Customer at any time owing to BALC. With knowledge that BALC will enter into agreements with or extend financial accommodations to Customer in reliance upon the existence of this Guaranty and the validity and enforceability of the obligations and liabilities of Guarantor to BALC contemplated hereby, Guarantor agrees with BALC as follows:

1.     Guaranty. Guarantor guarantees to BALC the prompt payment and/or performance of all indebtedness, obligations and liabilities of Customer at any time owing to BALC, whether direct or indirect, matured or unmatured, primary or secondary, certain or contingent, or acquired by or otherwise created in favor of BALC, including without limitation any and all rent, loan, purchase or other installment payments, principal balances, taxes, indemnities, liquidated damages, accelerated amounts, return deficiency charges, stipulated loss and casualty value payments, transaction expenses and other reimbursements, administrative charges, all interest, late charges and fees, attorneys’ fees or enforcement and other costs, which may at any time be payable to BALC, together with all claims for damages arising from or in connection with the failure to punctually and completely pay or perform such obligations, whether or not such obligations are from time to time reduced or extinguished and thereafter increased or incurred (collectively the “Obligations”). This Guaranty is a guaranty of payment and performance, and not a guaranty of collection, and Guarantor hereby undertakes and agrees that if Customer does not or is unable to punctually and completely pay or perform any Obligations for any reason, Guarantor shall (i) punctually pay any such Obligations requiring the payment of money which Customer fails to pay promptly, as and when due, in each case, as an Obligation for payment due directly from Guarantor to BALC and without any abatement, reduction, setoff, defense, counterclaim or recoupment, and (ii) punctually perform any and all Obligations not requiring the payment of money for the benefit of BALC, as an Obligation for performance due directly from Guarantor to BALC. Guarantor shall be deemed to be primarily liable for each Obligation and not merely as a surety thereof.

2.     Continuing Nature of Guaranty; Revocation. This Guaranty is a continuing guaranty and shall in all respects be valid and enforceable without regard to the form or the amount of the Obligations in existence at any time. Guarantor may prospectively revoke this Guaranty by sending written notice, certified mail, return receipt requested, to BALC at the address for BALC specified above (the “Revocation Notice”). The revocation of this Guaranty shall not be effective with respect to any Obligation arising on or prior to the date occurring fifteen (15) days after BALC's receipt of the Revocation Notice (the “Revocation Date”), or to any Obligation arising at any time after the Revocation Date if such Obligation arises as the result of a commitment made by BALC to Customer on or prior to the Revocation Date.

3.     Absolute, Unconditional, Joint and Several Nature of Guaranty. The obligations of Guarantor hereunder are absolute and unconditional, and shall be joint and several with each Guarantor executing this Guaranty and each other party that may be liable, directly or indirectly, for the payment or performance of any of the Obligations. If this Guaranty is executed by more than one party, the term “Guarantor” as used herein shall mean (unless the context otherwise requires) “the Guarantor and each of them” and each and every undertaking shall be their joint and several undertaking. If Customer is a partnership or a limited liability company, the obligations of Guarantor herein contained shall remain in full force and effect notwithstanding any changes in the individuals or members comprising the partnership or the limited liability company, and the term “Customer” shall include any altered or successive partnerships or limited liability companies. Guarantor shall not be released from any obligations under or in respect of this Guaranty for any reason, nor shall such obligations be reduced, diminished or discharged for any reason, including without limitation:

(a) Modifications; Indulgences; Payment Applications. Any modifications, renewals, or alterations of any agreement, document or instrument relating to any Obligation; any indulgences, adjustments, preferences, extensions or compromises made by BALC in favor of Customer or Guarantor or any other party; or the application of any payments and receipts, by whomever paid and/or however realized, to any amounts owing by Guarantor or Customer to BALC in such manner as BALC shall determine in its sole discretion.

(b) Condition of Customer or Guarantor. Any insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution , appointment of a receiver for, or other similar proceeding affecting Customer or Guarantor; any sale, lease or other disposition of any of the assets of Customer or Guarantor; any reorganization of, or change in the composition of the shareholders, partners or members of, Customer or Guarantor; or any termination of, or other change in, the relationship between Customer and Guarantor.

(c) Invalidity of Obligations or Other Agreements. The invalidity, illegality or unenforceability of any Obligation for any reason whatsoever, including, but not limited to: the existence of valid abatements, defenses, counterclaims, deductions or off-sets to any Obligation; the violation of applicable usury or other laws by any Obligation; or the lack of authenticity or genuineness of any document or instrument relating to the Obligations. This Guaranty shall be in addition to any other guaranty or other security for the Obligations, and it shall not be prejudiced or rendered unenforceable by the invalidity or unenforceability of any such other guaranty or security.

(d) Release of Customer. Any complete or partial release of Customer or any other party liable for any Obligation for any reason.

(e) Release and Care of Collateral; Status of Liens. Any sale, transfer, release, surrender, exchange, deterioration, waste, loss or impairment of any property transferred or assigned by Customer, Guarantor or any other party in respect of any Obligation or otherwise acquired by BALC for lease to Customer or otherwise in connection with any Obligation (collectively, the “Collateral”), whether negligent or willful; the failure of BALC or any other party to exercise reasonable care in the preservation, protection, sale or other treatment of any of the Collateral; the failure of BALC or any other party to create or properly perfect BALC’s rights, title or interests in any Collateral, or any mortgage, pledge, security interest, transfer or assignment of any Collateral (a “Lien”); the unenforceability of any Lien; the creation of any lien or encumbrance on any Collateral in favor of any other party, or the subordination of any Lien in favor of BALC to any such other lien or encumbrance; or the taking or accepting by BALC of any other security for, or assurance of payment of, any Obligation.

(f) Other Action or Inaction. Any other action or inaction on the part of BALC, whether or not such action or inaction prejudices Guarantor or increases the likelihood or amount that Guarantor will be required to pay or perform in connection with any Obligation pursuant to the terms hereof.

It is the obligation of Guarantor to discharge the Obligations when due, notwithstanding any occurrence, circumstance, event, action or omission whatsoever, whether or not particularly described herein. Guarantor is not entering into this Guaranty in reliance on the value or the availability of any Collateral. Guarantor acknowledges that Guarantor may be required to pay the Obligations, in full, without the assistance or support of any other party. Guarantor has not been induced to enter into this Guaranty on the basis that any party other than Customer will be liable to perform any Obligations or that BALC will look to any other party to perform any Obligation. BALC may release, or settle with, the Customer, any Guarantor, or any other party liable, directly or indirectly, for the performance of any Obligation, all without affecting the liability of any other party to this Guaranty. To the extent that this Guaranty is secured by property of Guarantor, BALC shall not be obligated to release its security interest in such property until all applicable preference periods have passed with respect to payments of Obligations made to BALC.

4.     Waivers. Guarantor waives:

(a) Action Against Others. Any right to require BALC to: institute suit or exhaust remedies against Customer or any other party liable for any Obligation; enforce BALC's rights in any of the Collateral or other security which is at any time given to secure any Obligation; enforce BALC's rights against any other Guarantor or any other party liable on any Obligation; join Customer or any other party liable for any Obligation in any action seeking to enforce this Guaranty; or exhaust any other remedies available to BALC or resort to any other means of obtaining payment or performance of any Obligation.

(b) Notices. Notice of the execution, delivery or acceptance by BALC, Customer or any other party, of this Guaranty or any document, agreement or instrument evidencing any Obligation; notice of the amount of credit extended by BALC to Customer at any time, whether primary or secondary; notice of modifications or extensions of any Obligation; notice of defaults, or other non-performance by Customer in connection with any Obligation; notice of the transfer or disposition by BALC of any Obligation; notice of the repossession, sale or other disposition of any of the Collateral; notice of the acceptance of this Guaranty by BALC; demand and presentation for payment upon Customer or any other party liable for any Obligation; protest, notice of intention to accelerate or notice of acceleration of any Obligation, notice of protest and diligence in bringing suit against Customer or any other party; and any other action or inaction on the part of BALC in connection with this Guaranty or any Obligation.

(c) Subrogation. Any right which Guarantor may at any time have against Customer, or any other party liable for any Obligation, as a result of the performance by Guarantor of its obligations under this Guaranty, including, but not limited to contractual, statutory and common law rights of subrogation, reimbursement, indemnification, set-off or contribution, until all Obligations owing to BALC have been paid and performed in full.

(d) Suretyship Defenses. Any defenses which Guarantor may have or assert against the enforcement of this Guaranty or any Obligation based upon suretyship principles or any impairment of Collateral.

5.     Representations; Warranties; Covenants. Guarantor hereby represents, warrants and covenants to and with BALC that:

(a) Benefit. Guarantor has received, or will receive, substantial benefit from the agreements and transactions giving rise to the Obligations and this Guaranty.

(b) Authorization; Enforceability. This Guaranty has been duly authorized by all necessary action on the part of Guarantor. The execution, delivery and performance of this Guaranty does not require the approval of, or giving of notice to, any governmental authority and does not contravene or constitute a default under any applicable laws, or any contract, mortgage, agreement, indenture, or other instrument to which Guarantor is a party or by which it may be bound. This Guaranty has been duly executed and delivered by Guarantor and constitutes the legal, valid and binding obligations of Guarantor enforceable in accordance with its terms except to the extent that the enforcement of remedies hereunder may be limited under applicable bankruptcy and insolvency laws, and the equitable discretion of any court of competent jurisdiction. To Guarantor’s knowledge, there are no actions or proceedings pending or threatened against or affecting Guarantor or any of Guarantor’s property before any court, administrative officer or administrative agency that, if decided adversely, could affect the financial condition or operations of Guarantor or the ability of Guarantor to perform its obligations hereunder.

(c) Access to Information; No Representation by BALC. Guarantor has adequate means to obtain continuing and sufficient information concerning the financial and business condition of the Customer and other parties liable in respect of the Obligations and BALC shall have no obligation to furnish any such information to Guarantor. Neither BALC nor any other party has made any representation, warranty or statement to Guarantor in order to induce Guarantor to execute this Guaranty.

(d) Subordination. All present and future indebtedness of Customer to Guarantor (“Subordinated Debt”) shall be and hereby is subordinated to the prior payment and performance of all Obligations,. For so long as there is no default hereunder or in connection with the Obligations or the Subordinated Debt, Guarantor may receive and Customer may pay (but not prepay, whether or not permitted or contemplated by the terms of the Subordinated Debt) principal and/or interest or other scheduled installment payments of Subordinated Debt from Customer. At any time while the Obligations are in default, Guarantor shall not demand or accept any payment of, or otherwise cancel, set-off or otherwise discharge any part of, the Subordinated Debt without the prior written consent of BALC. Upon the request of BALC, Guarantor shall deliver to BALC a certified statement of the outstanding Subordinated Debt, specifying in detail the time at which permitted payments of Subordinated Debt were made, if any, and such other information as BALC may request.

(e) Financial Condition; Solvency: Reports. As of the date hereof, and after giving effect to this Guaranty and the contingent obligations contained herein, Guarantor is solvent and has assets which, when fairly valued, exceed its liabilities. The performance of the obligations of Guarantor hereunder will not cause Guarantor to exceed its ability to pay its debts as they mature, and this Guaranty is made without any intent to hinder, delay or defraud either present or future creditors, purchasers or other interested persons. Guarantor shall provide to BALC such financial statements and other financial and other information concerning Guarantor as BALC may reasonably request from time to time.

(f) Assignment. BALC may, at any time and without the consent of, or notice to, Guarantor, assign all or any portion of its rights hereunder to any other party to which all or any portion of the Obligations are transferred, assigned or negotiated (an “Assignee”). Guarantor shall promptly execute and deliver to BALC or its Assignee such further and additional documents, instruments and assurances as BALC deems necessary (a) in order to acknowledge and confirm, for the benefit of BALC or its Assignee, all of the terms and conditions of all or any part of the Obligations or this Guaranty and BALC’s or Assignee’s rights with respect thereto, and Customer’s and Guarantor’s compliance with all of the terms and provisions thereof, and (b) to preserve, protect and perfect Lessor’s or Assignee’s right, title or interest hereunder and in any Collateral, including, without limitation, such UCC financing statements or amendments, control agreements, corporate or member resolutions, votes, certificates of compliance, notices of assignment or transfers of interests, and restatements and reaffirmations of Guarantor’s obligations, representations, warranties and covenants hereunder as of the dates requested by BALC from time to time. This Guaranty shall not be deemed to create any right in any party except as provided herein and shall inure to the benefit of, and be binding upon, the successors and assigns of Guarantor and BALC, provided that Guarantor shall not assign or delegate any of its rights or obligations hereunder without the prior written consent of BALC.

(g) Further Assurances. Guarantor will promptly execute any documents and other records, including, amendments to this Guaranty, and will take such further action as BALC may reasonably request in order to carry out more effectively the intent and purposes of this Guaranty and to establish, perfect and protect BALC’s rights and remedies hereunder and in any Collateral.

6.     Default; Performance of Obligations. If (a) Customer defaults in the payment or performance of any Obligation, or (b) if there exists any event or condition which, with notice and/or the passage of time, would constitute a default under any document, agreement or instrument evidencing an Obligation (including any default relating to Guarantor or this Guaranty), or (c) any representation or warranty of Guarantor herein or in any certificate, agreement, statement or document furnished at any time to BALC by or on behalf Guarantor (including without limitation, any financial information), shall prove to be or to have been false or incorrect in any material respect; or (d) Guarantor shall fail to perform or observe any covenant (including without limitation, any financial covenants), condition or agreement required to be performed or observed by it hereunder or in connection with any Obligation, and such failure shall continue for 10 days after written notice thereof to Guarantor; or (e), or if there is a liquidation, bankruptcy, assignment for the benefit of creditors or similar proceeding affecting the status, existence, assets or obligations of Customer or any Guarantor or other party liable to BALC in respect of the Obligations, (each of the foregoing being hereinafter referred to as a “Default”), then the Obligations of Customer shall, at the sole option of BALC, be deemed to be accelerated and become immediately due and payable by Guarantor for all purposes of this Guaranty, and Guarantor shall (i) immediately pay directly to BALC all such Obligations for the payment of money owing to BALC by reason of acceleration or otherwise (including without limitation, any rent, liquidated damages, principal or interest payments or balances, fees, other installments or any other accrued or unaccrued amounts with respect to such Obligations), irrespective of whether a Default exists relating to Customer, and notwithstanding any stay, injunction or other prohibition preventing acceleration of any Obligations against Customer, and (ii) promptly perform all other Obligations. Guarantor shall be liable, as principal obligor and not as a surety or guarantor only, for all attorneys' fees and other costs and expenses incurred by BALC in connection with BALC's enforcement of this Guaranty), together with interest on all amounts recoverable under this Guaranty, compounded monthly in arrears, from the time such amounts become due and payable until the date of payment at the default rate of interest provided in the agreement evidencing the Obligations (without duplication). If BALC is required to return any payment made to BALC by or on behalf of Customer, whether as a result of Customer's bankruptcy, reorganization or otherwise, Guarantor acknowledges that this Guaranty covers all such amounts, notwithstanding that the original of this Guaranty may have been returned to Guarantor and/or otherwise canceled.

7.     Governing Law; Miscellaneous. THIS GUARANTY AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF RHODE ISLAND, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW. GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE OF RHODE ISLAND COURTS IN CONNECTION WITH BALC'S ENFORCEMENT OF ANY OBLIGATIONS UNDER OR IN RESPECT OF THIS GUARANTY. GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS GUARANTY. Federal law requires all financial institutions to obtain, verify and record information that identifies each entity that obtains a loan or other financial accommodation. The first time Customer or Guarantor requests a financial accommodation from BALC, BALC will ask for the Customer’s (or the Guarantor’s) legal name, address, tax ID number and other identifying information. Guarantor shall promptly provide copies of business licenses or other documents evidencing the existence and good standing of Guarantor requested by BALC. Time is of the essence in the payment and performance of all Obligations and all of Guarantor's obligations and liabilities owing to BALC hereunder. This Guaranty constitutes the entire agreement of Guarantor and BALC relative to the subject matter hereof, and there are no prior or contemporaneous understandings or agreements, whether oral or in writing, between the parties hereto with respect to the subject matter hereof. Nothing herein shall be deemed or construed to amend, modify, supersede or replace any other guaranty or other written agreement of the Guarantor in favor of or with BALC without the express written agreement of Banc of America Leasing & Capital, LLC. No subsequent modification of, or supplement to, this Guaranty shall be enforceable against any party hereto unless the same is in writing and is duly signed by an authorized manager, member, officer or representative of the party against whom enforcement is sought. Any notices or demands required or permitted to be given under this Guaranty (a) shall be given in writing, (b) shall become effective (i) if delivered with receipt acknowledged, such as by Airborne, FedEx, UPS or other private courier service, on the date of such receipt, (ii) if delivery by either private courier or U. S. Postal Service is attempted but refused, on the date of such refusal, or (iii) if mailed by certified or registered mail, return receipt requested, postage prepaid, then on the date of receipt, and (c) shall be addressed to BALC to the attention of Customer Accounts, and to Guarantor at the address set forth below, or to such other address as the party to receive notice hereafter designates by such written notice.

The undersigned, pursuant to due corporate, limited liability company or partnership authority, as appropriate, has or have caused this Guaranty to be executed as of the date set forth below.

Dated as of: April __, 2015

Witness/Attest/Notary Public:	GUARANTOR:
	LANDEC CORPORATION
Name:	By:
Address:	Name:
	Title:
	Guarantor's Taxpayer ID:

EX-10.5

Exhibit 10.5

May __, 2015

Landec Corporation

3603 Haven Avenue

Menlo Park, CA 94025  CONFIDENTIAL

Attn.: Mr. Greg Skinner

Re: Conditional Credit Approval Notification

Dear Sir or Madam:

We are pleased to inform you that your company’s application for business credit/request for financing (the “Financing”) has been approved subject to the conditions set forth below.

SUMMARY OF CREDIT APPROVAL CONDITIONS

TRANSACTION TYPE:	Senior Secured Term Loans and a Real Property Loan
CUSTOMER(S):	Apio, Inc.
GUARANTOR:	Landec Corporation
LENDER:	General Electric Capital Corporation or its affiliates or assigns (“GE Capital”, “we,” “us”, or “our”).
EQUIPMENT/REAL PROPERTY:	New Machinery & Equipment to be located in Hanover, PA Real Property described as land, building & improvements in Hanover, PA
EQUIPMENT SUPPLIER:	Various
EQUIPMENT/REAL PROPERTY LOCATION:	Hanover, PA
EQUIPMENT LOAN AMOUNT:	Not to exceed $14,714,092
TERM:	60 months; 84 month amortization
REAL PROPERTY LOAN AMOUNT:	Approximately $7,686,000 (based on building cost of $10,248,000) to expand the existing Hanover, PA facility
TERM:	Ten (10) years; Twenty (20) year amortization
PERIODIC PAYMENTS/ INTEREST RATES:	To be set forth in the Documents

Conditional Credit Approval Notification

Page of 1 of 5

FEES:	Good Faith Deposit: $75,000.00, which shall be non-refundable, even if the Financing does not close, except in the event the Financing is not approved by Lender. In such case, the Deposit shall be returned promptly (less the cost of credit verification, investigation and any out-of-pocket expenses incurred such as appraisal fees, legal fees, etc.). Upon the closing of the Financing, the Good Faith Deposit shall be applied to reduce the initial payment(s) due. Documentation and Underwriting Fee: Customer will pay Lender a documentation fee, which shall be in the amount of .1% of the total amount funded by Lender for the Equipment Loan, but in no event less than $500. Borrower shall pay an underwriting fee equal to .50% of the Real Property Loan Amount and .25% of the Equipment Loan Amount. The foregoing fees are not refundable and earned upon acceptance.
LAST FUNDING DATE:	To be set forth in the Documents but, notwithstanding anything to the contrary in Exhibit C of that certain preliminary proposal letter to Guarantor from Lender dated as of April 22, 2015 and executed by Guarantor as of May 8, 2015 (“Proposal Letter”), a copy of which is attached hereto as Exhibit A, in no event later than December 31, 2016. In addition, notwithstanding anything to the contrary in Exhibit A of the Proposal Letter, the last funding date for the Real Property Loan shall be March 31, 2016.
NET LOANS:	The Loans will be “net loans” with Customer unconditionally, absolutely and irrevocably responsible for making payments under all circumstances. Customer is specifically responsible for all expenses, maintenance, insurance and taxes relating to the purchase, financing, possession and use of the Collateral excluding, however, taxes based solely on the net income of Lender. All maintenance and insurance (fire and theft, extended coverage and liability) are the responsibility of Customer. Customer will be responsible for maintaining in force, property and liability insurance with companies and in amounts satisfactory to Lender.
DOCUMENTATION:	Lender’s current standard loan documentation for this type of Collateral and Financing will be used. Lender and its legal counsel must approve any changes to this documentation. In the event that Lender needs to retain outside counsel to facilitate the Transaction, the cost would be the responsibility of Customer.
TRANSACTION COSTS:	Customer will be responsible for (i) all of its closing costs, (ii) the cost of any external appraisal and external legal expenses, and (iii) with respect to the real property, the cost of any environmental investigation and reports, property condition assessment report, escrow, recording and transfer fees and taxes, title charges, survey costs, external legal expenses and all other out-of-pocket costs incurred by Lender. Lender will be responsible for all of its closing costs.
SECURITY INTEREST:	Lender will require a first priority perfected security interest in the equipment and Real Property. Prior to Lender’s payment of the final Real Property costs, Lender must be satisfied that there are no liens relating to the Real Property.
CROSS COLLATERALIZATION:	This Financing will be cross collateralized and cross defaulted to the loans between Customer and Lender and its affiliates.
ELECTRONIC PAYMENTS:	Scheduled payments shall be set-up with the Electronic Payment System as the Standard form of payment; appropriate documentation will be provided.
UPGRADE AND IMPROVEMENTS:	Lender will consider loan upgrades and improvements to the Collateral throughout the loan term, depending upon investment and credit approval requirements at that time. Loan terms and rates will be determined based upon the facts and circumstances in effect at the time of any additional financing.
OTHER TERMS AND CONDITIONS:	The terms and conditions of the Proposal Letter are incorporated by reference into this notification and deemed a part hereof.

Conditional Credit Approval Notification

Page of 2 of 5

ADDITIONAL APPROVAL CONDITIONS

● Execution and delivery of all transactional documents required by us in connection with our approval of the Financing in form and substance satisfactory to us in our sole discretion (“Documents”) and completion of any conditions set forth in those Documents on or before the Last Funding Date(s) set forth above (or such later date as we may otherwise agree to in writing).

● Customer will provide its financial statements to Lender in accordance with the terms set forth in that certain Master Security Agreement dated as of April 23, 2012 between Customer and Lender.

● Guarantor will provide its financial statements to Lender in accordance with the terms set forth in that certain Guaranty dated as of April 23, 2012 between Guarantor and Lender.

● If requested by us, inspection of the Equipment at your location by us or our designee prior to closing the Financing.

● Appraisal, ordered by Lender and prepared in such scope and form as Lender shall require.

● Environmental site assessment(s), ordered by Lender and prepared in such scope and form as Lender shall require.

● Real Property condition assessment, ordered by Lender and prepared in such scope and form as Lender shall require.

● Seismic screening report and, if necessary, seismic study, ordered by Lender and prepared in such scope and form as Lender shall require.

● Real Property information as Lender shall request.

● Subordination of all leases affecting the Real Property.

● A mortgagee’s extended coverage ALTA title policy, (or equivalent if unavailable), from an insurer acceptable to Lender, and with such endorsements as Lender may require.

● ALTA as-built survey, certified to Lender and the title company, in form and content acceptable to Lender.

● Verification that the Real Property and improvements are complete and not damaged by fire or other casualty, nor subject to any condemnation proceedings, pending or threatened.

● An opinion of Customer’s outside legal counsel as to the enforceability of the Documents under the laws of the Real Property’s jurisdiction and such other matters as Lender shall reasonably require.

● Proof of the Real Property’s compliance with parking, zoning, licensing and other applicable laws and regulations, including (without limitation) a permanent certificate(s) of occupancy.

● Property, liability, rental loss (or business interruption, as appropriate), and other insurance in such amounts as Lender may from time to time require. If any portion of the Real Property is located in a special flood hazard area, Lender shall require flood insurance in accordance with federal regulations; for properties located in earthquake hazard areas Lender may require earthquake insurance. All insurance policies must be in accordance with Lender’s insurance requirements and shall include any endorsements which Lender may reasonably require.

● We shall not have determined (in our sole discretion) every six months (a) that there has been an adverse change in the business prospects or projections, operations, management, financial or other conditions of the Customer, Guarantor or any affiliate of Customer, any Guarantor or any other obligor, or in the industry in which Customer or Guarantor or such other party operates, or a change in control of any one of the aforesaid parties, (b) that there has been a disruption of, or adverse change in, the leasing or lending market, leasing or loan syndication, or financial, banking or capital markets conditions, or (c) that any of the information used by us in approving the financing was materially inaccurate or contained material omissions.

● Prior to our funding the Financing, Customer, Guarantor and other obligor under the Financing are not in breach or otherwise in default under (a) any agreement with us or our affiliates or (b) any other material debt obligations.

● This approval notification shall be governed by and construed in accordance with the internal laws of the State of Connecticut without reference to principles of conflict of laws. No rights hereunder shall be assigned by you without our prior written consent and our conditional approval hereunder will automatically terminate upon any such unauthorized assignment. The parties relating to the Financing each agree to waive all rights to a jury trial with respect to this notification and the Financing.

This notification is not intended to create a binding legal obligation by either of us; rather, it confirms that the Financing has been approved subject to the conditions set forth herein which may be modified, withdrawn, terminated, or made subject to additional terms and conditions not set forth herein as a result of our continuing due diligence, changes in market conditions and applicable laws, and changes to the business prospects or projections, operations, management, financial or other conditions of the Customer or any guarantor or any other obligor. The information contained in this notification is confidential and proprietary and may not be distributed to any person without our prior written consent.

We look forward to speaking to you soon to begin the documentation process.

Conditional Credit Approval Notification

Page 3 of 5

If our conditions of approval set forth in this notification are not substantially on the terms you requested and you do not accept and proceed with the Financing on the terms stated in this notification, then your application for business credit will be deemed denied.

If your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial.  To obtain the statement, please contact: RISK MANAGER, General Electric Capital Corporation, 500 West Monroe Street, Chicago, IL 60661 or call (312) 441-7957 within sixty (60) days from the date you are notified of our decision.  We will send you a written statement of reasons for the denial within thirty (30) days of receiving your request for the statement.

The federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age (provided the applicant has the capacity to enter into a binding contract), because all or part of the applicant's income derives from any public assistance program, or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act.  The federal agency that administers compliance with this law concerning this creditor is the Federal Trade Commission, Equal Credit Opportunity, Washington, DC  20580.

By: __________________________________

CREDIT MANAGER

GENERAL ELECTRIC CAPITAL CORPORATION

AGREED TO AND ACCEPTED:

this ____ day of May, 2015

APIO, INC.

By:__________________________________

Name:_______________________________

Title:_________________________________

Conditional Credit Approval Notification

Page 4 of 5 

Exhibit A

[Copy of Proposal Letter]

Conditional Credit Approval Notification

Page 5 of 5

April 22, 2015

Mr. Greg Skinner

VP Finance/CFO

Landec Corporation

3603 Haven Avenue

Menlo Park, CA 94025

Dear Greg:

On behalf of GE Capital, I am pleased to submit our preliminary proposal for your consideration. This proposal is presented as a $22,400,092.00 financing facility secured by real property and equipment. The structural options incorporated in this proposal are outlined in the attached exhibits. The highlights are outlined below.

Product Summary

(A)     $7,686,000.00

Fixed Rate Term Loan secured by real estate

10 Year Term with a 20 year amortization

4.19% Fixed Rate

  (B)    $10,443,692.00

Fixed Rate Term Loan secured by equipment

5 Year Term with a 7 year amortization

  2.98% Fixed Rate

  (C)   $4,270,400.00

 Fixed Rate Term Loan secured by equipment

  5 Year Term with a 7 year amortization

2.98% Fixed Rate

This proposal is expressly subject to the approval of a firm commitment by our Senior Management Committee and may be withdrawn by GECC at any time prior to a definitive written commitment by GECC to enter into this transaction. GE Capital has not yet completed a formal underwriting of the proposed term loan. This is not a commitment to lend, but a preliminary term sheet of the basic terms and conditions of a potential loan approval.

Upon receipt of this signed proposal letter and good faith deposit, we shall begin our credit review process. We look forward to your early review and response.

Sincerely,

GE CAPITAL CORPORATION

Michael L. Dallape

Senior Vice President

Landec Corporation

April 22, 2015

Page 2 of 5                    

EXHIBIT A

TRANSACTION: The transaction is structured as a senior secured term loan

BORROWER: Apio, Inc.

GUARANTOR: Landec Corporation

LENDER: GE Capital Corporate Finance or one of its wholly-owned subsidiaries or nominees

COLLATERAL: Real property described as land, building & improvements in Hanover, PA

LOAN AMOUNT: Approximately: $7,686,000.00 (based on building cost of $10,248,000)

FUNDING DATE: Between May 1, 2015 and December 30, 2015

TERM: Ten (10) years

AMORTIZATION: Twenty (20) year amortization

Real Estate Advance The real estate advance amount will be 75% of the appraised value of

Amount: the Collateral based upon a MAI appraisal (the appraiser is subject to Lender’s approval and selection). In the event that the value is less than 75% of the cost to contruct GE will provide an additioanl loan advance on the existing real estate term loan collateral for the amount of the shortfall.

INTEREST RATE: 4.19% Fixed

PAYMENTS: Monthly payments in arrears

ADMINISTRATIVE FEE: Borrower will pay Lender a .50% fee for the underwriting of this transaction

PRE-PAYMENT: (5%) during year 1, (4%) during year 2, (3%) during year 3, and 0% thereafter

FINANCIAL COVENANTS: No specific financial covenants will be part of this transaction

INDEX: The terms and conditions of this proposal are based on various economic assumptions, including but not limited to the maintenance of the 10-Year Interest Rate SWAP, as published in the Federal Reserve Statistical Release Report H.15 (as of April 20, 2015). The rates set forth above are indicative of today's pricing only and therefore may be adjusted by Lender prior to funding should there be any changes in money rates prior to funding. Also, Lender has the right to make an adjustment prior to the closing date if the Corporate Index Spread Average(3) is more than 25 basis points different from the Corporate Index Spread(2) as of the initial Quote Date, which is 114 basis points.

(1) “Swap Rate” means the interest rate for swaps that most closely approximates the term of the Bond as published by the Federal Reserve Board in the Federal Reserve Statistical Release H.15

(2) “Corporate Index Spread” means the U.S. Aggregate Corporate AA-Rated Index as calculated by Barclays Capital on an Option Adjusted Spread (OAS) basis currently available online at http://online.wsj.com/mdc/public/page/2_3022-bondbnchmrk.html?mod=mdc_bnd_pglnk

(3) Corporate Index Spread Average means the average of the weekly Corporate Index Spreads over the period starting on the Initial Quote Date until the date of the last available Corporate Index Spread

as of the Closing Date.

Landec Corporation

April 22, 2015

Page 3 of 5                    

EXHIBIT B

TRANSACTION: The transaction is structured as a senior secured term loan

BORROWER: Apio, Inc.

GUARANTOR: Landec Corporation

LENDER: GE Capital Corporate Finance or one of its wholly-owned subsidiaries or nominees

COLLATERAL: New machinery and equipment to be located in Hanover, PA

LOAN AMOUNT: Approximately: $10,443,692.00

FUNDING DATE: Between May 1, 2015 and June 30, 2016

TERM: Five (5) years

AMORTIZATION: Seven (7) year amortization

Advance Rate: 100% of cost

INTEREST RATE: 2.98% Fixed      

PAYMENTS: Monthly payments in arrears

ADMINISTRATIVE FEE: Borrower will pay Lender a .25% fee for the underwriting of this transaction.

PRE-PAYMENT: (3%) during year 1, (2%) during year 2, and 0% thereafter.

FINANCIAL COVENANTS: No specific financial covenants will be part of this transaction

INDEX: The terms and conditions of this proposal are based on various economic assumptions, including but not limited to the maintenance of the 5-Year Interest Rate SWAP, as published in the Federal Reserve Statistical Release Report H.15 (as of April 20, 2015). The rates set forth above are indicative of today's pricing only and therefore may be adjusted by Lender prior to funding should there be any changes in money rates prior to funding. Also, Lender has the right to make an adjustment prior to the closing date if the Corporate Index Spread Average⁽³⁾ is more than 25 basis points different from the Corporate Index Spread⁽²⁾ as of the initial Quote Date, which is 114 basis points.

(1) “Swap Rate” means the interest rate for swaps that most closely approximates the term of the Bond as published by the Federal Reserve Board in the Federal Reserve Statistical Release H.15

(2) “Corporate Index Spread” means the U.S. Aggregate Corporate AA-Rated Index as calculated by Barclays Capital on an Option Adjusted Spread (OAS) basis currently available online at http://online.wsj.com/mdc/public/page/2_3022-bondbnchmrk.html?mod=mdc_bnd_pglnk

(3) Corporate Index Spread Average means the average of the weekly Corporate Index Spreads over the period starting on the Initial Quote Date until the date of the last available Corporate Index Spread as of the Closing Date.

Landec Corporation

March 25, 2015

Page 4 of 5                    

EXHIBIT C

TRANSACTION: The transaction is structured as a senior secured term loan

BORROWER: Apio, Inc.

GUARANTOR: Landec Corporation

LENDER: GE Capital Corporate Finance or one of its wholly-owned subsidiaries or nominees

COLLATERAL: New machinery and equipment to be located in Hanover, PA

LOAN AMOUNT: Approximately: $4,645,100.00

FUNDING DATE: Between July 1, 2016 and June 30, 2017

TERM: Five (5) years

AMORTIZATION: Seven (7) year amortization

Advance Rate: 100% of cost

INTEREST RATE: 2.98% Fixed      

PAYMENTS: Monthly payments in arrears

ADMINISTRATIVE FEE: Borrower will pay Lender a .25% fee for the underwriting of this transaction.

PRE-PAYMENT: (3%) during year 1, (2%) during year 2, and 0% thereafter.

FINANCIAL COVENANTS: No specific financial covenants will be part of this transaction

INDEX: The terms and conditions of this proposal are based on various economic assumptions, including but not limited to the maintenance of the 5-Year Interest Rate SWAP, as published in the Federal Reserve Statistical Release Report H.15 (as of April 20, 2015). The rates set forth above are indicative of today's pricing only and therefore may be adjusted by Lender prior to funding should there be any changes in money rates prior to funding. Also, Lender has the right to make an adjustment prior to the closing date if the Corporate Index Spread Average⁽³⁾ is more than 25 basis points different from the Corporate Index Spread⁽²⁾ as of the initial Quote Date, which is 114 basis points.

(1) “Swap Rate” means the interest rate for swaps that most closely approximates the term of the Bond as published by the Federal Reserve Board in the Federal Reserve Statistical Release H.15

(2) “Corporate Index Spread” means the U.S. Aggregate Corporate AA-Rated Index as calculated by Barclays Capital on an Option Adjusted Spread (OAS) basis currently available online at http://online.wsj.com/mdc/public/page/2_3022-bondbnchmrk.html?mod=mdc_bnd_pglnk

(3) Corporate Index Spread Average means the average of the weekly Corporate Index Spreads over the period starting on the Initial Quote Date until the date of the last available Corporate Index Spread as of the Closing Date.

Landec Corporation

April 22, 2015

Page 5 of 5

Borrower acknowledges that Lender has not yet examined Borrower’s financial and credit status. To induce Lender to proceed with credit verification and investigation, borrower shall pay Lender a Good Faith Deposit equal to $75,000.00. If Lender does enter into a transaction with borrower pursuant to this proposal letter, the Good Faith Deposit shall be applied to reduce the initial payment(s) due except for a documentation charge and Administrative Fee. This fee is not refundable except in the event that the transaction representated by this proposal letter or any amendment to it is not approved by the Lender.

Borrower further acknowledges that a pending change of control is being contemplated with the Lender. This change of control will have no impact to the terms and conditions of the this financing proposal so long as the change of control is to a major commercial bank or financial institution with an equivalent LACE bank rating of B+ or higher (“Qualified Entity). In the event that that change of control is announced and it is not to such a Qualified Entity, borrower will have the option to prepay this note within 90 days of this announcement without penalty. In the event that the rate has been locked borrower will be soley responsible for money cost breakage associated with such rate lock and will not be subject to a pre-payment penalty as outlined in the exhibts noted above.

We look forward to being able to reach a mutually satisfactory arrangement. We must advise you, however, that except for the provisions concerning the Good Faith Deposit (set forth above), this letter is not intended to and does not create any binding legal obligation on the part of either party. Neither GECC nor its subsidiary will be obligated to provide any financing until the satisfactory completion of its investment review and analysis and a field audit, the receipt of all requisite approvals by GECC management, and the prior execution and delivery of final legal documentation acceptable to all parties and their counsel.

Please acknowledge your consent to the terms outlined above by signing a copy of this letter and returning it with your check for the Good Faith Deposit. We look forward to your early review and response. Please feel free to contact me at (415) 277-7472.

Sincerely,

GE Captial Corporate Finance

Michael L, Dallape

Senior Vice President

Agreed To by:

Landec Corporation

_____________________________

By:

_____________________________

Title:

_____________________________

Date:

EX-99.1

Exhibit 99.1

Contact Information:               

At the Company:	Investor Relations:
Gregory S. Skinner	Matt Glover or Michael Koehler
Vice President Finance and CFO	(949) 574-3860
(650) 261-3677	LNDC@liolios.com

Landec Secures New Equipment and Real Property Loans

To Support Planned Capacity Expansion

MENLO PARK, Calif. – May 21, 2015 -- Landec Corporation (NASDAQ: LNDC), a leading developer and marketer of innovative and proprietary products for healthy living applications in the food and biomedical markets, has secured for Apio, Inc., Landec’s food subsidiary, a new equipment loan from Banc of America Leasing & Capital, LLC (“BofA”) and has replaced Apio’s current GE Capital equipment loan with a new equipment loan from GE Capital. In addition, Apio has entered into a new real property loan with GE Capital to expand its Hanover, PA facility to more than triple its current size by the end of calendar 2015.

The new equipment loan with BofA allows Apio to borrow up to $15.0 million for equipment purchases from October 1, 2014 through April 30, 2016. Borrowings under this loan will be used primarily to expand capacity at Apio’s Guadalupe, CA facility. Each borrowing under this loan has a five-year term with a seven-year amortization period. The first borrowing of approximately $4.0 million under this loan is expected to occur before the end of fiscal year 2015 and will have a fixed interest rate of 2.79%. The interest rate on all subsequent borrowings will be subject to changes in the LIBOR rate and the 2-1/2-year swap rate.

The new GE Capital equipment loan replaces the remaining amount available under Apio’s previous equipment loan with GE Capital entered into on July 17, 2014. The former equipment loan was for up to $25.0 million, of which the Company had borrowed $11.4 million. The new equipment loan is for approximately $14.7 million and will be used to fund equipment purchases from May 1, 2015 through June 30, 2017. Each borrowing under this loan will have a five-year term with a seven-year amortization period. Borrowings under this loan will have a fixed interest rate based on an index rate plus a five-year swap rate which currently results in a fixed interest rate of 2.98%. This new equipment loan will be used primarily to fund equipment additions for capacity expansion at Apio’s Hanover, PA and Bowling Green, OH facilities.

In addition, Apio entered into a new real property loan for approximately $7.7 million which will be used to expand Apio’s Hanover, PA facility from 19,000 square feet to approximately 63,000 square feet in order to meet expected increases in demand for Apio’s Salad Kit products and to relieve some of the capacity constraints in Apio’s Guadalupe, CA facility. Apio anticipates drawing on this loan in November or December of 2015. The loan will have a ten-year term with a twenty-year amortization period and a fixed interest rate based on an index rate plus a ten-year swap rate which currently results in a fixed interest rate of 4.19%.

Landec’s Chief Financial Officer, Greg Skinner, said, “We are very pleased to secure these additional loans with GE Capital and to add BofA as a new lender to Apio. These new commitments demonstrate support from our lenders for our planned expansion consistent with our five-year plan for growth and the recognition of Landec’s market leadership and progress. With these additional credit facilities, Apio’s borrowing capacity now exceeds $77 million available for future expansion of its operations.”

About Landec Corporation 

Landec Corporation is a company that leverages its proprietary polymer technologies, application development and innovation capabilities to develop and commercialize new products in food and biomaterials markets. Landec's food subsidiary, Apio, has become the leader in US fresh-cut specialty packaged vegetables sold in North America based on combining Landec's proprietary food packaging technology and the strength of two major national brands, Eat Smart® and GreenLine®, with the capabilities of large scale processing and national distribution.  Lifecore Biomedical, a subsidiary of Landec, is a premium supplier of hyaluronan-based materials and medical products to ophthalmic, orthopedic and veterinary markets worldwide. In addition, Lifecore Biomedical provides specialized aseptic fill and finish services in a cGMP validated manufacturing facility for supplying commercial, clinical and pre-clinical products. Landec will also periodically work with market-leading companies to develop and commercialize differentiated polymer-based products under R&D and royalty agreements. For more information about the Company, visit Landec's website at www.landec.com.

Important Cautions Regarding Forward-Looking Statements

Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially, including such factors among others, as the timing and expenses associated with operations, the ability to achieve acceptance of the Company's new products in the market place, weather conditions that can affect the supply and price of produce, the amount and timing of research and development funding and license fees from the Company's collaborative partners, the timing of regulatory approvals, the mix between domestic and international sales, and the risk factors listed in the Company’s Form 10-K for the fiscal year ended May 25, 2014 (See item 1A: Risk Factors) which may be updated in Part II, Item 1A Risk Factors in the Company’s Quarterly Reports on Form 10-Q. As a result of these and other factors, the Company expects to continue to experience significant fluctuations in quarterly operating results and there can be no assurance that the Company will remain consistently profitable. The Company undertakes no obligation to update or revise any forward-looking statements whether as a result of new developments or otherwise.