License And Research And Development Agreement

Exhibit 10.63 LICENSE AND RESEARCH AND DEVELOPMENT AGREEMENT This License and Research and Development Agreement (this " Agreement" ) is entered into as of March 14, 2006 (the " Effective Date" ), by and between LANDEC CORPORATION, a California corporation (together with its Affiliates referred to herein as " Landec" ), and AIR PRODUCTS AND CHEMICALS, INC., an entity organized and existing under the laws of Delaware (together with its Affiliates referred to herein as " APD" ). APD and Landec are sometimes referred to herein individually as a " Party" and collectively as the " Parties ." Background Landec has certain proprietary know-how and technology relating to certain polymer materials. APD develops, manufactures and distributes, among other things, gases and specialty chemicals to diversified markets and geographies. The Parties desire that Landec and APD collaborate using Landec' s know-how and technology to develop certain personal care, latent catalyst, cleaning and nonwoven products using Landec' s know-how and technology and to license to APD certain of that know-how and technology, for APD to exploit, as more fully described herein. The Parties agree as follows: Agreement 1. Certain Definitions. For the purposes of this Agreement, the capitalized words and phrases defined in the preamble of this Agreement have the respective meanings set forth therein, and the following capitalized words and phrases have the meanings ascribed to them below: 1.1 " Adhesives" shall mean a viscoelastic material that remains permanently tacky and will adhere to a wide variety of solid surfaces. 1.2 " Affiliate" shall mean with respect to a party: (i) any company at least fifty percent (50%) of whose issued and voting capital is owned or controlled, directly or indirectly, by said party, or (ii) any company which owns or controls, directly or indirectly, at least fifty percent (50%) of the issued and voting capital of said party, or (iii) any company owned or controlled, directly or indirectly, to the extent of at least fifty percent (50%) of the issued and voting capital, by any of the foregoing. 1.3 " Ag Field" shall mean: (a) the treatment, coating, sale and/or use of seeds or agricultural products including without limitation corn, soybean, cotton and the like for farming, ornamental and/or other uses, (b) tubers, seeds and/or plant grafts, (c) all other crops, and (d) all other fruits, vegetables, flowers and the like. 1.4 " APD Fields" shall mean the Exclusive Fields together with the Reserved Fields provided, however, that the APD Fields shall exclude the Excluded Fields.

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1.5 " APD Improvements" shall only mean Improvements to the Patent Properties or the Existing Know-How created solely by APD without any assistance or involvement by Landec. APD Improvements shall exclude Improvements by those individuals without knowledge of any of the Existing Know-How or any portion of the Intelimer Instruction. 1.6 " APD IP" shall mean (i) the APD Improvements and (ii) the Joint Use Improvements in the APD Fields. 1.7 " Buy-Out Option" shall have the meaning given to it in Section 6.5. 1.8 " Commercialized" or " Commercialize" shall mean that Net Sales of Products in a particular Reserved Field have exceeded one hundred thousand dollars ($100,000) or more in any given calendar year. 1.9 " Direct Profits" shall mean Net Sales arising out of sale or exploitation of Products (or *** products as provided in Sections 4 and 6.2) minus the following: (a) container purchase costs; (b) freight and warehouse costs; (c) raw material costs; (d) variable manufacturing costs including additional toll charges for third party processors; (e) fixed manufacturing costs (including depreciation) allocated in the same manner that APD allocates such fixed manufacturing costs for its general accounting purposes and (f) supply chain costs that are directly related to the manufacture and internal product management of Products, as sourced from third party processors or in-house production. 1.10 " Excluded Fields" shall mean Pharmaceuticals, the Food Field, the *** and Adhesives. 1.11 " Exclusive Fields" shall mean products for: (a) personal care, which are not regulated by the FDA, including without limitation i) cosmaceutical products (which may be regulated by the FDA), ii) sunscreen products which are regulated by the FDA and iii) non-pharma transdermal even if applied via an adhesive system ) (collectively the " Personal Care Field" ), (b) Thermoset Latent Catalysts, (c) household, industrial and institutional cleaning, excluding floor finishes (e.g. and not by way of limitation, polymers and polymer-based formulations used in the manufacture of hard surface cleaners, equipment cleaning, vehicle cleaning, laundry cleaning, cleaning for food & beverage institutions), and (d) disposable nonwovens (e.g., and not by way of limitation, polymers and polymer-based formulations used in the manufacture of disposables such as paper towels, industrial wipes, surgical gowns, diapers, similar hygiene products, among other disposable nonwoven products). 1.12 " Existing Know-How" shall mean all information relating to the Landec Intelimer Materials which is necessary or useful to the manufacture, use or sale of the Products, which on the Effective Date Landec owns or is free to license to APD and shall include, but not be limited to, the Intelimer Instruction. For the avoidance of doubt, the Existing Know-How shall constitute at least part of the Proprietary Information of Landec or Landec' s licensor(s) if any. 1.13 " Food Field" shall include, without limitation, the following: the packaging, including bulk, pallet and container packaging, of any food related products including without limitation fresh produce, such as fruits and vegetables, flowers, meat, fish and the like. * Certain information on this page has been omitted and filed seperately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

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1.14 " Governmental Authority" shall mean any government or agency, instrumentality or other subdivision thereof, including courts and tribunals, and the states, provinces and other subdivisions thereof. 1.15 " Improvements" shall mean all improvements to the Patent Properties or the Existing Know-How developed by either Party hereunder (solely or jointly by the Parties or, subject to Section 2.5, jointly with third parties) including but not limited to inventions, patents, know-how, trade secrets and confidential information which is recorded, developed, conceived of, created and/or reduced to practice during the Term. 1.16 " Infringement Notice" shall have the meaning set forth in Section 9.2 of this Agreement. 1.17 " Intelimer Instruction" shall have the meaning given to it in Exhibit B. 1.18 " Joint Use Improvements" shall mean Improvements created jointly by the Parties which result in one or more patent applications or issued patents covering a field of use (as opposed to a process or composition of matter). 1.19 " Landec Field" shall mean all fields other than the APD Fields. 1.20 " Landec Improvements" shall mean Improvements: (i) created solely by Landec without any assistance or involvement by APD; (ii) created jointly by APD and Landec or otherwise using the resources of both Parties, (iii) created by Landec and a third party provided that such improvements are licensable to APD, or (iv) acquired, or licensed by Landec and sublicensable to APD. 1.21 " Landec IP" shall mean the Licensed Technology and the Joint Use Improvements in the Landec Field. 1.22 " Landec Intelimer Materials" shall mean any of Landec' s proprietary temperature-responsive materials exhibiting a pre-defined thermal transition. 1.23 " Laws" shall mean laws, statutes, ordinances, rules, regulations, judgments or decrees administered, promulgated or issued by any Governmental Authority. 1.24 " Licensed Technology" shall mean the Patent Properties, the Existing Know-How and any Landec Improvements. 1.25 " Licensed Trademarks" shall mean the mark " INTELIMER" , including all registered and common law rights thereto and goodwill associated therewith, and any foreign equivalent or representation thereof where Landec has the rights to such mark. Exhibit C sets forth the territories in which the mark is currently registered. 1.26 " Minimum Payments" shall have the meaning given to it in Section 6.2.

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1.27 " Net Sales" shall mean all money received from sales of products minus amounts paid to unaffiliated third parties (distributors, agents and the like) for sales costs directly related to the sale of such products. 1.28 " Patent Properties" shall mean the patents and patent applications listed on Exhibit A covering the Landec Intelimer Materials, the inventions described and claimed therein, and any continuations, continuations-in-parts, divisionals, reexamination certificates, reissuances, renewals or extensions thereof or related by a priority claim therewith, and any and all foreign patents, utility models (i.e., petty patents), registrations and patent applications corresponding thereto (and any extension, reissue, reexamination or substitute of any of the foregoing, which will be automatically incorporated in and added to this Agreement and shall periodically be added to Exhibit A). 1.29 " Person" shall mean an individual or entity of any kind, including a Governmental Authority. 1.30 " Personal Care Field" shall have the meaning given to it in Section 1.11. 1.31 " Pharmaceuticals" shall mean therapeutics requiring FDA approval. 1.32 " Product" shall mean a product for use in the APD Fields (i) that is developed using the Licensed Technology or an Improvement; (ii) which comprises any of the Landec Intelimer Materials, or (iii) that is covered by any of the Patent Properties. 1.33 " Proprietary Information" of a disclosing Party disclosed to the receiving Party hereunder shall mean any confidential information relating to the disclosing Party' s business and/or technology and which is labeled as confidential or proprietary or identified in writing as confidential or proprietary. 1.34 " Proprietary Rights" shall mean all intellectual property rights whether registrable or not of any sort anywhere in the world. 1.35 " R&D Period" shall have the meaning set forth in Section 3.1. 1.36 " Reserved Fields" shall initially mean the fields of (i) architectural and industrial coatings (excluding powder coatings) and (ii) electronics (e.g. processing materials for semiconductor component manufacturing, battery materials or flat panel displays); or such other fields as replace these initial Reserved Fields in accordance with Section 5. 1.37 " Term" shall have the meaning given to it in Section 10.1. 1.38 " Thermoset Latent Catalysts" shall mean Landec Intelimer Materials used as catalysts, effectors, activators, cross-linkers, initiators and/or precursors thereof to enhance or inhibit polymerization. 1.39 " Work Plan" shall mean the work plan that is attached hereto as Exhibit B, which is incorporated by reference herein, as amended, modified, extended or replaced upon mutual agreement of the Parties.

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1.40 " Year" shall mean a year of this Agreement (i.e. Year 1 shall mean that period commencing on the Effective Date and ending on the first anniversary of the Effective Date).2. Licenses 2.1 Technology License to APD. Subject to the terms and conditions of this Agreement, Landec hereby grants to APD an exclusive, worldwide, non-transferable, non-sublicensable, license for all rights to use, make, have made, market, sell, offer for sale, import and export and otherwise exploit the Licensed Technology within the APD Fields; provided, however, that Landec shall retain the right to use the Licensed Technology within the APD Fields solely as needed to perform its obligations under Section 3 below. For the avoidance of doubt, the forgoing license shall include the right to have third parties manufacture Products on behalf of APD and the right of APD' s customers to use Products delivered to them by or on behalf of APD. Notwithstanding the forgoing, the license granted in this Section 2.1 shall be subject to the terms of License and Development Agreement between Landec and ************ under which *** retains a non-exclusive right to use and sell ************ and which, without APD' s consent, which consent shall not be unreasonably withheld, shall not be amended, renewed, expanded or extended by Landec. 2.2 Technology License to Landec. Subject to the terms and conditions of this Agreement, APD hereby grants to Landec an exclusive, worldwide, non-transferable, non-sublicensable, license for all rights to use, make, have made, market, sell, offer for sale, import and export and otherwise exploit the APD Improvements within the Landec Field; provided, however, that APD shall retain the right to use the APD Improvements within the Landec Field solely as needed to perform its obligations under Section 3 below. For the avoidance of doubt, except as may be explicitly set forth in the Supply Agreement, the forgoing license shall include the right to have third parties (who are not primary polymerization competitors of APD) manufacture products utilizing the APD Improvements on behalf of Landec and the right of Landec' s customers to use products utilizing the APD Improvements delivered to them by or on behalf of Landec in the Landec Field. To the extent that Landec generates any revenue by selling products produced using the APD Improvements in the Landec Field, then Landec shall pay APD a royalty of two percent (2%) of the Net Sales for the Intelimer polymer included in any product which is made using the APD Improvements. 2.3 Ownership. Except for the licenses expressly granted under this Section 2, Landec retains all right, title and interest in and to the Landec IP. Thus, Landec is free to transfer, license and otherwise exploit the Landec IP in the Landec Field worldwide. Except for the licenses expressly granted under this Section 2, APD retains all right, title and interest in and to the APD IP. Thus, APD is free to transfer, license and otherwise exploit the APD IP in the APD Fields worldwide. 2.4 Restrictions. APD will not use the Licensed Technology for a purpose other than to exploit Products for use within the APD Fields as expressly permitted in this Agreement. Landec will not use the APD Improvements for a purpose other than as expressly permitted herein. * Certain information on this page has been omitted and filed seperately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

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2.5 Improvements Developed with Third Parties. Each Party shall use commercially reasonable efforts to include provisions in third party development contracts that would permit the other Party hereto to receive a license to any Improvements co-developed with a third party and a Party hereto. For those Improvements co-developed by a Party with a third party under a development contract containing the forgoing provisions, the developing Party hereby grants the other Party hereto a license to such Improvement pursuant to Section 2.1 or Section 2.2, as applicable. 2.6 Trademark License and Restrictions. (a) License Grant. Subject to the provisions of this Agreement, Landec grants to APD a non-exclusive, non-transferable, worldwide, royalty-free license to use the Licensed Trademarks solely in connection with the manufacture, marketing, advertising, sale and offer for sale of the Products in the APD Fields. The foregoing is not an obligation upon APD to use such Licensed Trademarks and APD shall have sole discretion as to whether such Licensed Trademarks are used. (b) Restrictions. APD agrees that the Products bearing any Licensed Trademarks (which may, as deemed appropriate by APD, be co-branded with APD trademarks) will be manufactured, sold and distributed in accordance with all applicable Laws and regulations and that such products and APD shall use all reasonable efforts to avoid adversely upon the name of Landec or APD. APD shall not challenge or diminish any of Landec' s rights in the Licensed Trademarks during the term of this Agreement or thereafter. APD shall not sublicense, explicitly or implicitly any rights in the Licensed Trademarks without the prior express written consent of Landec. APD shall not at any time incorporate any of the Licensed Trademarks or any mark or marks so nearly resembling the same as to be likely to deceive or cause confusion, in its corporate or business name or logo. APD shall not at any time use or apply to register in its name the Licensed Trademarks or any mark or marks confusing similar thereto. Except for APD trademarks associated with co-branding hereunder, all use of the Licensed Trademarks shall accrue to the benefit solely of Landec. APD agrees to provide test samples of Products upon Landec' s reasonable request. (c) Procedure. APD shall provide to Landec for inspection a certificate of analysis, label and product and marketing literature (including all materials using any of the Licensed Trademarks) for the first commercial product in each product family (intended for a specific application) that incorporates a Licensed Trademark or which will be marketed or distributed using a Licensed Trademark a reasonable time prior to the initial sale or distribution of each such product. Landec shall have the right to make reasonable changes, including without limitation changes in the color and font of the mark. At Landec' s request, APD will reasonably assist Landec in monitoring the use of the Licensed Trademarks by conducting an annual review with Landec of APD' s use of the same. APD will at all times comply with any trademark usage guidelines that may be provided by Landec. In the event of infringement of any of the Licensed Trademarks by any third party, APD will cooperate and assist Landec in the enforcement of Landec' s rights therein. Nothing herein shall require APD to use the Licensed Trademarks. (d) Failure to Comply. In the event that APD fails to comply with the provisions of this Section 2.6, Landec may give written notice specifying the failure to comply. Unless the

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failure to comply is remedied within thirty (30) days after such notice, Landec may terminate APD' s rights solely under this Section 2.6 immediately upon written notice to APD. Upon such termination, APD shall cease all use of the Licensed Trademarks subject to allowing APD and its customers to exhaust any preexisting compliant inventory and compliant advertising bearing the Licensed Trademarks for up to ninety (90) days thereafter. Termination of this Section 2.6 shall not terminate the license under the Licensed Technology. 3. Work Plan and Research Obligations. 3.1 Work Plan. The specific research and development activities to be performed by Landec, together with any assistance to be provided by APD are set forth in the Work Plan. Each of the Parties shall perform its obligations under the Work Plan during the time period in which the Work Plan is in effect which shall be for a period of three (3) Years following the Effective Date and which may be extended by the Parties as provided herein. Prior to the second anniversary of the Effective Date, the Parties shall mutually agree on whether or not to continue the Work Plan for Years four (4) and five (5) of this Agreement and the Parties shall mutually agree on the scope of the R&D that will occur under such Work Plan (e.g., what R&D shall occur, and which party will conduct such R&D). As more fully described in the Work Plan, Landec shall provide to APD agreed upon levels of research and development services, in connection with the Licensed Technology, and technical service and manufacturing support within the APD Fields during the R&D Period. The Work Plan is divided into two parts: the Intelimer Instruction Period and the R & D Period (as defined below). (a) Intelimer Instruction Period. During the period commencing on the Effective Date and continuing until May 28, 2006 (the " Intelimer Instruction Period" ), Landec shall transfer copies of its technology and teach APD about Landec' s Intelimer technology by delivering the Intelimer Instruction, as more fully described in the Work Plan, to an extent and a degree reasonably sufficient for APD to replicate the Existing Know-How and manufacture of Landec Intelimer Materials. (b) R & D Period. The period commencing on the Effective Date and continuing until the expiration or termination of the Work Plan shall be referred to herein as the " R&D Period" . During the R & D Period, Landec shall provide mutually agreed upon levels of research and development services, application development, technical service, customer support and manufacturing support in connection with the licensed technology within the APD Fields as further described in the Work Plan. Each of the Parties shall provide to the other Party reasonable technical information and assistance in connection with such other Party' s work under the Work Plan. During the R&D Period, on a mutually agreed upon regular basis, each Party shall supply to the other Party reasonable documentation concerning such Party' s progress and Improvements under the Work Plan. (c) A breach of the Work Plan shall not be a breach of this Agreement unless a Party materially fails to satisfy a material obligation under the Work Plan. With respect to the Intelimer Instruction, APD shall notify Landec in writing of such material failure by June 6, 2006 and Landec shall have sixty (60) days to remedy such breach from receipt of notice thereof.

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With respect to the R&D Period, APD shall notify Landec in writing of such material breach within thirty (30) days of its knowledge of such breach and Landec shall remedy such breach within sixty (60) days of receipt of notice thereof. The parties agree that APD may request changes to the Work Plan (preferably during the quarterly review meetings as described in Section 3.2) and that Landec will use its reasonable efforts to meet such requests provided; however, that Landec shall retain sole discretion over the use of Landec' s resources. (d) The completion or termination of the Work Plan shall not cause a termination of this Agreement. 3.2 Review Meetings and Customer Visits. At least once per calendar quarter during the R&D Period, at mutually agreeable times and locations, representatives of the parties' research and development teams and business development staff shall meet either in person or by videoconference to discuss the progress under the Work Plan. For in-person customer or toll producer visits or review meetings requested by APD at a non-Landec facility and a non-APD facility (other than a limited number of customer visits agreed to in the Work Plan), APD shall pay all reasonable and previously authorized travel, meal and lodging expenses of Landec personnel to attend each meeting that is conducted in person if APD so requests the attendance of that person, and the Parties shall otherwise bear their own costs associated with the Work Plan, participating in such meetings or customer visits agreed to in the Work Plan.4. Supply Agreement. Within sixty (60) days of the Effective Date, the parties shall sign an agreement (the " Supply Agreement" ) for APD to supply Landec with its polymer requirements for ************, provided that APD is able to supply such products to Landec, either from third party tollers or APD' s in-house production, that meet the volume requirements and quality specifications provided by Landec. APD shall apply a *** percent (***%) markup over Total Manufacturing Cost (as defined in the Supply Agreement, the " TMC" ) to arrive at the final sales price to Landec. The Direct Profits arising from the difference between the sales price to Landec and the TMC will be shared with Landec in the same percentages as for Direct Profits arising from Product sales under Section 6.2 of this Agreement. If APD achieves TMC reductions resulting from any or all of increased production scale, decreased raw material costs, process yield improvements, and overhead cost reductions then the sales price to Landec will be reduced effective in the calendar quarter following the onset of such cost reductions. APD shall be obligated to either: (i) match competitive offers to Landec for such *** products, provided the quotations are from suppliers capable of sustained production in similar quantities and quality as provided to Landec by APD for such products at that time, or (ii) if APD is unwilling or unable to do so, APD hereby releases Landec from its obligation to purchase its requirement of *** products from APD. Unless otherwise agreed by the Parties, the Supply Agreement shall not be terminated by any termination of this Agreement and shall not be affected by any exercise of the Buy-Out Option. Any failure to enter into a Supply Agreement or termination of the Supply Agreement shall not terminate this Agreement.5. Reserved Field Commercialization. There may be up to two (2) Reserved Fields at any time during the Term. Each Reserved Field shall have a period of three (3) Years to be * Certain information on this page has been omitted and filed seperately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

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Commercialized. If such Reserved Field is Commercialized during such three (3) Year period, it shall convert to an Exclusive Field and the Parties may mutually agree to add a replacement Reserved Field. If a Reserved Field is not Commercialized during such three (3) Year period, then: (i) it automatically reverts back to Landec; (ii) it ceases to be a " Reserved Field" as defined herein; and (iii) the Parties may mutually agree to add a replacement Reserved Field. For every new Reserved Field that is added, such Reserved Field shall have three (3) years to become Commercialized or it will revert to Landec with no further APD rights in such field as provided above.6. Fees; Payment; Taxes. 6.1 Scheduled Payments. (a) Payments upon Agreement Signing. In consideration for the Intelimer Instruction to be given hereunder, APD shall make a non-refundable reimbursement to Landec of one hundred thousand U.S. dollars ($100,000.00) upon the signing of this Agreement. In partial consideration for the license to the Licensed Technology granted hereunder, APD shall pay net to Landec by wire transfer a non-refundable fee of eight hundred thousand U.S. dollars ($800,000.00) upon the signing of this Agreement. For the avoidance of doubt, the total non-refundable fee due upon the signing of this Agreement shall be nine hundred thousand U.S. dollars ($900,000.00). (b) Quarterly Payments. In partial consideration for the license to the Licensed Technology granted hereunder, prior to the start of each calendar quarter beginning with the first calendar quarter in Year 2 and continuing through the last calendar quarter in Year 3, APD shall pay net to Landec by wire transfer a non-refundable fee of two hundred thousand U.S. dollars ($200,000.00). For the avoidance of doubt, the total non-refundable quarterly payments payable hereunder shall be one million six hundred thousand U.S. dollars ($1,600,000.00) and the total non-refundable amounts due under this Section 6.1 shall be two million five hundred thousand U.S. dollars ($2,500,000.00). Notwithstanding the foregoing, no quarterly payments shall become due or payable hereunder for the post termination period in the event this Agreement is terminated under Section 10.2. 6.2 Profit-Sharing. Commencing on the first anniversary of the Effective Date and continuing through the tenth anniversary of the Effective Date, subject to Sections 10.2 and 11.4 and provided that Landec is not in material breach of this Agreement, APD shall pay net to Landec, forty percent (40%) of Direct Profits from the APD Fields together with forty percent (40%) of Direct Profits from *** products delivered to Landec under the Supply Agreement. From the tenth anniversary of the Effective Date through the end of the Term, APD shall pay net to Landec, ten percent (10%) of Direct Profits from the APD Fields together with ten percent (10%) of Direct Profits from *** products delivered to Landec under the Supply Agreement. Notwithstanding the forgoing and subject to Sections 10.2 and 11.4, APD shall make the following minimum payments (the " Minimum Payments" ) to Landec beginning in Year 2 and continuing through Year 5: * Certain information on this page has been omitted and filed seperately with the Commission. Confidential treatment has been requested with respect to the omitted portions.

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Year 2: $500,000
Year 3: $1,000,000
Year 4: $1,000,000 (Note: Subject to Section 6.4)
Year 5: $1,000,000 (Note: Subject to Section 6.4) In the event that the Direct Profits payable to Landec in any given Year (the " Direct Profit Payment" ) is less than the Minimum Payment due for that Year, APD shall pay Landec the difference between the Direct Profit Payment and such Minimum Payment prior to the end of such Year. In the event that APD fails to make payments under this Section 6.2 meeting the Minimum Payment due in any given Year, Landec may convert the license in the Exclusive Fields to a non-exclusive license and revok ...