11.	Subsequent event

Yucatan

Acquisition

December 1, 2018,

Apio entered into a capital contribution and partnership interest and stock purchase agreement (the “Purchase Agreement”) by and among Yucatan Foods, L.P., a Delaware limited partnership (“Yucatan”), Camden Fruit Corporation, a California corporation and the General Partner of Yucatan ("Camden”), the equityholders of Camden and Yucatan, the Company, in its capacity as guarantor, and Ardeshir Haerizadeh, as a representative of the equityholders. Pursuant to the Purchase Agreement, the Company acquired, on

December 1, 2018 (

the “Closing”), all of the issued and outstanding limited partnership interests of Yucatan and all of the issued and outstanding capital stock of Camden (the “Acquisition”) for initial consideration of

$60.0

million in cash and

$20.0

million in Landec common stock ("Stock Consideration"). The Stock Consideration has

-and-

-year lock-up provisions (such that

50%

of the Stock Consideration is released from lock-up on the

year anniversary of the Closing and the balance on the

year anniversary).

Given the timing of the completion of the acquisition, the Company is currently in the process of valuing the assets acquired and liabilities assumed in the acquisition. As a result, the Company is unable to provide the amount to be recorded as of the acquisition date for the major classes of assets acquired and liabilities assumed. The Company will provide these disclosures in its Quarterly Report on Form

-Q for the

third

quarter ending

February 24, 2019.

Fourth Amendment to the Credit Agreement

November 30, 2018,

Landec and certain of its subsidiaries entered into the Fourth Amendment and Joinder to Credit Agreement and Other Loan Documents (the “Amended Credit Agreement”) with JPMorgan, BMO and City National Bank, as lenders, which amended the Credit Agreement by and among Landec, certain of its subsidiaries, and the Lenders. The Amended Credit Agreement increased the capacity of the credit facility available under the Credit Agreement by

$55,000,000

to (i) a

$105,000,000

revolving line of credit (the “Amended Revolver”) and (ii) a

$100,000,000

term loan facility (the “Amended Term Loan”) from its preexisting credit facility comprised of (i) a

$100,000,000

Revolver and (ii) a

$50,000,000

Term Loan.

The Amended Credit Agreement continues to be guaranteed by certain of Landec's direct and indirect subsidiaries and secured by substantially all of Landec's and such direct and indirect subsidiaries’ personal property assets (with the exception of Apio’s equity interest in Windset Holdings

2010

Ltd.). Both the Amended Revolver and the Amended Term Loan continue to mature on

September 23, 2021,

with the Amended Term Loan requiring increased quarterly payments of

$2,500,000

and with the remainder continuing to be due at maturity. Interest on both the Amended Revolver and the Amended Term Loan continues to be based upon the Company’s “Total Leverage Ratio”, now at a per annum rate of either (i) the prime rate plus a spread of between

0.25%

and

2.25%

or (ii) the Eurodollar rate plus a spread of between

1.25%

and

3.25%,

but also now allowing for a Total Leverage Ratio of up to

4.50

1.00.

The Amended Credit Agreement also contains an “accordion” feature that provides Landec the right to increase the Amended Revolver commitments and/or the Amended Term Loan commitments by obtaining additional commitments either from

one

or more of the Lenders or another lending institution in an amount of up to

$10,000,000.

Landec entered into the Amended Credit Agreement primarily to fund its acquisition of Yucatan and its related entities on

December 1, 2018,

to pay certain fees and expenses incurred in connection with the consummation of the Amended Credit Agreement, and for other general corporate purposes.

The Amended Credit Agreement continues to contain customary events of default under which the obligation could be accelerated and/or the interest rate increased.