This document consists of 32 pages, of which this is page
            Number 1. The index to Exhibits is on Page 16.


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                 For the Fiscal Quarter Ended April 30, 1996, or

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

               For the Transition period from _____ to _________.

                         Commission file number: 0-27446

                               LANDEC CORPORATION
             (Exact name of registrant as specified in its charter)

         California                                          94-3025618
(State or other jurisdiction of                             (IRS Employer
 incorporation or organization)                          Identification Number)

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

               Registrant's telephone number, including area code:
                                 (415) 306-1650

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for at least the past 90 days.

                                    Yes X  No
                                       ---   ---
As of May 31,  1996,  10,674,858  shares of the  Registrant's  common stock were
outstanding.

                                      -1-


<PAGE>


                               LANDEC CORPORATION

                 FORM 10-Q For the Quarter Ended April 30, 1996

<TABLE>

                                      INDEX
<CAPTION>

                                                                                                              Page
<S>          <C>                                                                                               <C>
             Facing sheet                                                                                      1
             Index                                                                                             2

Part I.      Financial Statements

Item 1.      a)     Consolidated condensed balance sheets as of April 30, 1996 and October  31, 1995           3
             b)     Consolidated statements of operations for the three and six months ended April 30,
                    1996 and 1995                                                                              4

             c)     Consolidated statements of cash flows for the six months ended April 30, 1996 and 1995     5
             d)     Notes to consolidated financial statements                                                 6

Item 2.      Management's Discussion and Analysis of Financial Condition and Results of Operations             8


Part II.     Other Information                                                                                14
             Signature                                                                                        15
             Index to Exhibits                                                                                16
</TABLE>


                                      -2-


<PAGE>


                          PART I. FINANCIAL INFORMATION


Item 1.  Financial Statements

<TABLE>

                               LANDEC CORPORATION
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                   (Unaudited)
                      (In thousands, except share amounts)
<CAPTION>

                                                                            April 30,        October 31,
                                                                               1996             1995
                                                                         ----------------  ---------------
                                                  Assets
<S>                                                                        <C>               <C>
Current Assets:
     Cash and cash equivalents                                             $   20,181        $    3,585
     Short-term investments                                                    19,025             1,964
     Accounts receivable, net                                                      63                53
     Inventories                                                                  508               488
     Prepaid expenses and other current assets                                    237               115
                                                                         ----------------  ---------------
Total Current Assets                                                           40,014        $    6,205

Property and equipment, net                                                       987               993
Other assets                                                                      123               149
                                                                         ----------------  ---------------
                                                                           $   41,124        $    7,347
                                                                         ================  ===============

                     Liabilities and Stockholders' Equity (Net Capital Deficiency)

Current Liabilities:
     Convertible notes payable                                             $        -        $        -
     Accounts payable                                                             298               291
     Accrued compensation                                                         326               302
     Other accrued liabilities                                                    423               281
     Current portion of capital lease obligations                                 213               239
     Deferred revenue                                                             304               129
                                                                         ----------------  ---------------
Total Current Liabilities                                                       1,564             1,942

Non-current portion of capital lease obligations                                  448               558

Redeemable convertible preferred stock at accreted value                            -            31,276

Stockholder's Equity (Net Capital Deficiency):
     Preferred stock                                                                -                 -
     Common stock                                                              68,130               536
     Notes receivable from shareholders                                           (12)              (20)

     Deferred compensation                                                       (351)             (407)
     Accumulated deficit                                                      (28,655)          (26,538)
                                                                         ----------------  ---------------
Total Stockholders' Equity (Net Capital Deficiency)                            39,112           (26,429)
                                                                         ----------------  ---------------
                                                                         $     41,124        $    7,347
                                                                         ================  ===============
<FN>

                             See accompanying notes.
</FN>
</TABLE>


                                      -3-

<PAGE>

<TABLE>

                               LANDEC CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                      (In thousands, except per-share data)
<CAPTION>

                                                   Three Months Ended April 30,         Six Months Ended April 30,
                                                      1996             1995              1996              1995
                                                   ------------     -----------      ------------     ------------
<S>                                                <C>              <C>              <C>              <C>
Revenues:
     Product sales                                 $      281       $      198       $      412       $       441
     License fees                                         600              450              600               650
     Research and development revenues                    394              196              682               389
                                                   ------------     -----------      ------------     ------------
Total revenues                                          1,275              844            1,694             1,480
                                                   ------------     -----------      ------------     ------------
Operating costs and expenses:
     Cost of product sales                                295              327              539               652
     Research and development                             945              921            1,898             1,776
     Selling, general and administrative                  733              538            1,224             1,045
                                                   ------------     -----------      ------------     ------------
Total operating costs and expenses                      1,973            1,786            3,661             3,473
                                                   ------------     -----------      ------------     ------------
Operating loss                                           (698)            (942)          (1,967)           (1,993)

Interest income                                           439               63              506               133
Interest expense                                           (8)             (35)             (54)              (63)
                                                   ------------     -----------      ------------     ------------
Net loss                                           $     (267)      $     (914)      $   (1,515)      $    (1,923)
                                                   ============     ===========      ============     ============

Net loss per share                                 $    (0.03)      $    (0.77)     $     (0.32)      $     (1.63)
                                                   ============     ===========      ============     ============
Shares used in computation of net loss per share        8,874            1,182            4,713             1,181
                                                   ============     ===========      ============     ============
Supplemental net loss per share                    $    (0.03)      $    (0.13)     $     (0.17)      $     (0.27)
Shares used in computation of supplemental net
   loss per share                                  ============     ===========      ============     ============
                                                       10,016             7,095            8,709             7,060
                                                   ============     ===========      ============     ============
<FN>

                             See accompanying notes.
</FN>
</TABLE>


                                       4

<PAGE>

<TABLE>

                               LANDEC CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                 (In thousands)
<CAPTION>

                                                                              Six Months Ended April 30,
                                                                                 1996            1995
                                                                             ------------    -----------
<S>                                                                          <C>             <C>
Cash flows from operating activities:
Net loss                                                                     $   (1,515)     $ (1,923)
Adjustments to reconcile net loss to net cash used in operating activities:
     Depreciation and amortization                                                  195           195
     Loss on disposal of fixed assets                                                --            24
     Amortization of deferred compensation                                           56            --
     Changes in current assets and liabilities:
         Accounts receivable                                                        (10)           69
         Inventories                                                                (20)         (206)
         Prepaid expenses and other current assets                                 (122)           27
         Accounts payable                                                             7           (74)
         Accrued compensation                                                        24            (1)
         Other accrued liabilities                                                  142            86
         Deferred revenue                                                           175           131
                                                                             ------------    -----------
     Total adjustments                                                              196            32
                                                                             ------------    -----------
Net cash used in operating activities                                            (1,068)       (1,672)
                                                                             ------------    -----------

Cash flows from investing activities:
Purchases of property and equipment                                                (189)          (25)
Increase in other assets                                                             26           (12)
Purchases of available-for-sale securities                                      (20,108)       (3,960)
Maturities of available-for-sale securities                                       3,000         5,300
                                                                             ------------    -----------
Net cash (used for) provided by investing activities:                           (17,271)        1,303
                                                                             ------------    -----------
Cash flows from financing activities:
Proceeds from sale of common stock                                               35,062             3
Proceeds from repayment of notes receivable                                           9             2
Payments of capital lease obligations                                              (136)          (86)
Proceeds from capital lease financing of prior year capital expenditures             --           138
Proceeds from issuance of convertible notes payable                                  --           700
                                                                             ------------    -----------
Net cash provided by financing activities                                        34,935           757
                                                                             ------------    -----------
Net increase in cash and cash equivalents                                        16,596           388

Cash and cash equivalents at beginning of period                                  3,585         2,411
                                                                             ------------    -----------
Cash and cash equivalents at end of period                                   $   20,181       $ 2,799
                                                                             ============    ===========
<FN>

                             See accompanying notes.
</FN>
</TABLE>


                                       5

<PAGE>


                               LANDEC CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    Unaudited

1.   Basis of Presentation

         The accompanying  unaudited consolidated financial statements of Landec
Corporation  (the "Company" or "Landec")  have been prepared in accordance  with
generally accepted accounting  principles for interim financial  information and
with the  instructions  for Form 10-Q and Article 10 of  Regulation  S-X. In the
opinion of management, all adjustments necessary to present fairly the financial
position,  results of operations,  and cash flows at April 30, 1996, and for all
periods  presented,  have been made.  Although  the  Company  believes  that the
disclosures in these  financial  statements are adequate to make the information
presented not misleading,  certain  information  normally  included in financial
statements and related footnotes  prepared in accordance with generally accepted
accounting  principles have been condensed or omitted  pursuant to the rules and
regulations  of  the  Securities  and  Exchange  Commission.   The  accompanying
financial  data  should be reviewed in  conjunction  with the audited  financial
statements and notes thereto included in the Company's Registration Statement on
Form S-1 (Registration  Statement File. No. 33-80733) and related prospectus for
the Company's  initial public offering of its Common Stock,  which was completed
on February 15, 1996.

         The results of  operations  for the three and six month  periods  ended
April  30,  1996  are not  necessarily  indicative  of the  results  that may be
expected for the fiscal year ended October 31, 1996.

2.   Inventories

     Inventories are stated at the lower of cost (first-in, first-out method) or
market and consisted of the following:
                                                          April 30  October 31,
                                                            1996       1995
                                                            ----       ----
                                                              (in thousands)
     Raw materials . . . . . . . . . . . . . . . . . . .   $ 119     $ 123
     Work in process  . . . . . . . . . . . . . . . . . .    210       169
     Finished goods  . . . . . . . . . . . . . . . . . .     179       196
                                                             ---       ---
                                                           $ 508     $ 488
                                                             ===       ===

3.   Net Loss Per Share

         Except as noted below,  historic  net loss per share is computed  using
the weighted  average  number of common shares  outstanding.  Common  equivalent
shares are excluded from the computation as their effect is antidilutive, except
that,   pursuant  to  the  Securities  and  Exchange  Commission  ("SEC")  Staff
Accounting  Bulletins,  common  and common  equivalent  shares  (stock  options,
convertible notes payable and preferred stock) issued during the 12-month period
prior to the initial filing of the proposed offering at prices below the assumed
public  offering  price have been  included in the  calculation  as if they were
outstanding  for all periods  through October 31, 1995 (using the treasury stock
method for stock options and initial public offering price of $11.00 per share).

         As described above, the antidilutive effect of certain stock options is
included in the  calculation of loss per share for the three month and six month
periods ended April 30, 1995,  but is excluded from the  calculation  after that
date.  Supplemental  per share data is  provided  to show the  calculation  on a
consistent  basis for the periods  presented.  It has been computed as described
above, but excludes the  antidilutive  effect of common  equivalent  shares from
stock  options  and  warrants  issued at prices  substantially  below the public
offering  price  during the 12-month  period prior to the initial  filing of the
public offering,  and also gives retroactive effect from the date of issuance to
the  conversion  of preferred  stock and  promissory  notes which  automatically
converted  to common  shares upon the closing of the  Company's  initial  public
offering.

                                       6

<PAGE>


4.   Shareholders' Equity

         On February 15, 1996 the Company  completed an initial public  offering
of  2,800,000  shares of common  stock at a price of $12.00 per  share.  The net
proceeds to the Company  from the initial  public  offering  were  approximately
$31.2 million, after deducting underwriting discounts and commissions.

         Upon   completion  of  the  initial   public   offering  all  6,674,415
outstanding  shares of redeemable  convertible  preferred  stock and $700,000 of
notes payable were automatically  converted into 6,674,415 and 176,432 shares of
common stock, respectively.

         In March 1996, the underwriters exercised their overallotment option to
purchase  420,000  shares of common  stock for  $12.00 per  share.  The  Company
received an  additional  $4.7  million in  offering  proceeds,  after  deducting
underwriting discounts and commissions.

5.   Reclassifications

         Certain  prior year  balances  have been  reclassified  to conform with
current year presentation.

                                       7

<PAGE>



I
tem 2.

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

         The  following  discussion  should  be read  in  conjunction  with  the
unaudited  consolidated  financial statements and notes thereto included in Part
I--Item 1 of this Form 10Q and the audited consolidated financial statements and
notes thereto and  Management's  Discussion and Analysis of Financial  Condition
and Results of Operations  for the year ended October 31, 1995  contained in the
Company's  Registration  Statement  on  Form  S-1  (Registration  Statement  No.
33-80733) and related  prospectus for the Company's  initial public  offering of
its Common Stock, which was completed on February 15, 1996.

         Except for the historical  information  contained  herein,  the matters
discussed in this report are  forward-looking  statements  that involve  certain
risks and  uncertainties  that could cause actual  results to differ  materially
from those in the forward-looking statements.  Potential risks and uncertainties
include,  without limitation,  those mentioned in this report and, in particular
the factors  described  below under  "Additional  Factors That May Affect Future
Results," and those  mentioned in the Company's  prospectus  dated  February 15,
1996, under "Risk Factors."

Overview

         Since its  inception in October  1986,  the Company has been  primarily
engaged in the research and development of its Intelimer  technology and related
products.  The Company  launched its first product line,  QuickCast  splints and
casts, in April 1994. The Company  launched its second product line,  breathable
membranes for the fresh-cut  produce  packaging  market,  in September  1995. To
date,  the Company has  recognized  $1,349,000  in total  QuickCast  product and
breathable  membrane  sales.  The balance of revenues to date have resulted from
license fees, collaborative  arrangements and Small Business Innovative Research
("SBIR")  government  grants.  The  Company  has  been  unprofitable  since  its
inception  and  expects  to  incur  additional  losses,  primarily  due  to  the
continuation  of  its  research  and  development  activities  and  expenditures
necessary to further develop its manufacturing and marketing capabilities.  From
inception  through  April  30,  1996,  the  Company's  accumulated  deficit  was
$28,655,000.

Results of Operations

         Total  revenues were  $1,275,000  for the second quarter of fiscal year
1996 compared to $844,000 for the second  quarter of fiscal year 1995.  Revenues
from product  sales  increased to $281,000 in the second  quarter of fiscal year
1996 from  $198,000 in the second  quarter of fiscal year 1995 due  primarily to
the commencement of sales of breathable membrane products in late 1995. Revenues
from  license fees  increased to $600,000 for the second  quarter of fiscal year
1996 from  $450,000  in the second  quarter of fiscal year 1995.  Revenues  from
research and development funding increased to $394,000 for the second quarter of
fiscal year 1996 from $196,000 for the second  quarter of fiscal year 1995.  The
increase in license fees and research and development  revenue was due primarily
to  increased   fees  and  funding  under  an  expanded   agreement  with  Nitta
Corporation.  For the first six months of fiscal year 1996 total  revenues  were
$1,694,000  compared to $1,480,000 during the same period in 1995.  Revenue from
product sales for the first six months in fiscal year 1996 decreased to $412,000
from  $441,000  during  the same  period in 1995 due to a  decrease  in sales of
QuickCast  products  which  more  than  offset  the  increase  in  sales  of the
breathable membrane products. Revenue from license fees for the first six months
in fiscal year 1996  decreased to $600,000 from $650,000  during the same period
in 1995. Revenue from research and development  funding for the first six months
in fiscal year 1996  increased to $682,000 from $389,000  during the same period
in 1995 due to an increase in research and development  contracts in fiscal year
1996.  In March  of 1996,  the  Company  agreed  to  amend  their  research  and
development  collaboration  with BFGoodrich in the industrial latent curing area
by  removing  the  exclusivity  restrictions.  This  change  could  result  in a
short-term  reduction in research and development revenues that may be offset by
other contract revenue.

         Cost of product sales consists of material, labor and overhead. Cost of
product  sales was $295,000 for the second  quarter of fiscal year 1996 compared
to $327,000 for the second  quarter of fiscal year 1995, a decrease of 10%. Cost
of product  sales as a  percentage  of product  sales  decreased  to 105% in the
second  quarter of fiscal  year 1996 from 165% in the  second  quarter of fiscal
year 1995.  Cost of product  sales for the first six months of fiscal  year 1996
was $539,000  compared to $652,000 during the same period in 1995, a decrease of
17%. Cost of 

                                       8

<PAGE>

product sales as a percentage  of product sales  decreased to 131% for the first
six months of fiscal year 1996 from 148%  during the same period in 1995.  These
decreases in the cost of product  sales was  primarily the result of the ramp-up
and increased  volume of the  breathable  membrane  product  sales.  The Company
experienced negative gross margins for its products sales due to the early stage
of  commercialization  of the Company's  products and related  product  start-up
costs.  The Company  anticipates  that if revenues from product sales increases,
gross margins will improve as the fixed portion of cost of product sales will be
allocated  over higher  sales.  Improvements  in gross  margins due to increased
products sales, if any, may be offset in the future if the Company increases the
fixed   portion  of  cost  of  product   sales.   Due  to  the  early  stage  of
commercialization,  however, the Company is unable to predict with any certainty
future gross margins.

         Research and development  expenses were $945,000 for the second quarter
of fiscal year 1996  compared to $921,000 for the second  quarter of fiscal year
1995,  an increase of 3%. For the first six months of fiscal year 1996  research
and development  expenses were $1,898,000 compared to $1,776,000 during the same
period in 1995, an increase of 7%. Research and development  expenses  increased
primarily as a result of increased  development  costs in the  Company's  latent
curing  products.  In future  periods,  the Company  expects  that  spending for
research and development will continue to increase in absolute dollars, although
it may vary as a percentage of total revenues.

         Selling,  general and  administrative  expenses  were  $733,000 for the
second  quarter of fiscal year 1996 compared to $538,000 for the second  quarter
of fiscal year 1995, an increase of 36%. For the first six months of fiscal year
1996 selling,  general and administrative  expenses were $1,224,000  compared to
$1,045,000 during the same period in 1995, an increase of 17%. Selling,  general
and administrative  expenses increased  primarily as a result of increased sales
and marketing expenses and the additional  administrative  costs associated with
supporting  a public  company.  Selling,  general  and  administrative  expenses
consist primarily of sales and marketing expenses  associated with the Company's
product sales, business development expenses, staff and administrative expenses.
Sales and  marketing  expenses  increased to $378,000 for the second  quarter of
fiscal year 1996 from $222,000 for the second  quarter of fiscal year 1995.  For
the first six months of fiscal year 1996 sales and marketing  expenses increased
to $583,000 compared to $436,000 during the same period in 1995. The increase in
sales and marketing expenses was attributable to the costs to support the market
introduction of the breathable  membrane  products  launched in late fiscal year
1995  and the cost of  launching  two new  national  U.S.  distributors  for the
QuickCast  products  in the second  quarter of fiscal  year  1996.  The  Company
expects that  selling,  general and  administrative  spending  will  increase in
future periods, although it may vary as a percentage of total revenues.

         Net interest income for the second quarter and for the first six months
of fiscal year 1996 was  $431,000  and  $452,000,  respectively,  as compared to
$28,000 and $70,000 for the  comparable  periods in 1995.  Net  interest  income
increased due to interest income from the initial public offering proceeds.

Liquidity and Capital Resources

         As of April  30,  1996  the  Company  had  $39,206,000  of  cash,  cash
equivalents  and  short-term  investments.  On  February  15,  1996 the  Company
completed an initial  public  offering of 2,800,000  shares of common stock at a
price of $12.00  per  share.  The net  proceeds  (after  deducting  underwriting
discounts) to the Company from the initial  public  offering were  approximately
$31.2 million. In March 1996, the Company received an additional $4.7 million in
net  proceeds  resulting  from the exercise of the  underwriters'  overallotment
option.

         During the six months  ended April 30, 1996 and 1995,  Landec used cash
in operations of $1,068,000 and $1,672,000,  respectively. This decrease in cash
used in operations was due primarily to the increase in interest income from the
initial public offering proceeds.  The Company believes that existing cash, cash
equivalents and short-term investments,  including the proceeds from the initial
public  offering,  will be  sufficient  to finance its  operational  and capital
requirements  through  at  least  fiscal  1997.  The  Company's  future  capital
requirements, however, depend on numerous factors, including the progress of its
research  and  development   programs;   the  development  of  commercial  scale
manufacturing capabilities; the development of marketing, sales and distribution
capabilities;  the  ability of the Company to  maintain  existing  collaborative
arrangements and establish and maintain new collaborative arrangements; payments
received  under  research  and  development  agreements;  the costs  involved in
preparing,  filing,  prosecuting,  defending and enforcing intellectual property
rights;  complying with regulatory  requirements;  competing  technological  and
market developments;  the effectiveness of product commercialization  activities
and arrangements;  and other factors. If the Company's currently available funds

                                       9

<PAGE>

together with the internally  generated cash flow, are not sufficient to satisfy
its financing  needs,  the Company would be required to seek additional  funding
through other  arrangements  with  collaborative  partners,  bank borrowings and
public or private sales of its securities. The Company has no credit facility or
other  committed  sources of capital.  There can be no assurance that additional
funds, if required, will be available to the Company on favorable terms.

Additional Factors That May Affect Future Results

         The Company  desires to take advantage of the "Safe Harbor"  provisions
of the  Private  Securities  Litigation  Reform Act of 1995.  Specifically,  the
Company wishes to alert readers that the following important factors, as well as
other factors,  could in the future affect,  and in the past have affected,  the
Company's  actual  results  and could  cause the  Company's  results  for future
quarters  to differ  materially  from  those  expressed  in any  forward-looking
statements made by or on behalf of the Company.

         History of Operating  Losses and Accumulated  Deficit.  The Company has
incurred net losses in each year since its  inception,  including  net losses of
approximately  $914,000  and $267,000  during the second  quarter of fiscal year
1995 and 1996,  respectively,  and the Company's accumulated deficit as of April
30, 1996 totaled $28,655,000. The Company expects to incur additional losses for
the foreseeable future. The amount of future net losses and time required by the
Company to reach profitability are highly uncertain.

         Early  Commercialization;  Dependence on New Products and Technologies;
Uncertainty of Market Acceptance. While the Company recently commenced marketing
certain of its products,  it is in the early stage of product  commercialization
and many of its potential products are in development. The Company believes that
its  future  success  will  depend in large part on its  ability to develop  and
market new products in its target markets and in new markets. In particular, the
Company  expects  that  its  ability  to  compete   effectively   with  existing
industrial,  food  packaging,  medical and  agricultural  companies  will depend
substantially  on successfully  developing,  commercializing,  achieving  market
acceptance  of and reducing the cost of producing  the  Company's  products.  In
addition,  commercial  applications of the Company's  temperature switch polymer
technology are  relatively new and evolving.  There can be no assurance that the
Company will be able to  successfully  develop,  commercialize,  achieve  market
acceptance of or reduce the cost of producing the  Company's  products,  or that
the Company's competitors will not develop competing  technologies that are less
expensive  or  otherwise  superior  to those  of the  Company.  There  can be no
assurance  that the Company will be able to develop and  introduce  new products
and technologies in a timely manner or that new products and  technologies  will
gain  market  acceptance.  The failure to develop  and market  successfully  new
products  could  have a  material  adverse  effect  on the  Company's  business,
operating results and financial condition.

         The  success of the  Company  in  generating  significant  sales of its
products  will depend in part on the ability of the Company and its  partners to
achieve market acceptance of the Company's  products and technology.  The extent
to which, and rate at which,  market  acceptance and penetration are achieved by
the  Company's  current  and future  products  is a function  of many  variables
including, but not limited to, price, safety, efficacy, reliability,  conversion
costs and marketing and sales efforts,  as well as general  economic  conditions
affecting  purchasing  patterns.  There can be no assurance that markets for the
Company's  products will develop or that the Company's  products and  technology
will be accepted and adopted.  The failure of the Company's  products to achieve
market  acceptance  could  have a  material  adverse  effect  on  the  Company's
business, operating results and financial condition.

         Dependence on Collaborative  Partners.  The Company's  strategy for the
development,  clinical and field testing,  manufacturing,  commercialization and
marketing of certain of its current and future products  includes  entering into
various  collaborations with corporate partners,  licensees and others. To date,
the Company has entered  into  collaborative  arrangements  with The  BFGoodrich
Company  ("BFGoodrich") and Hitachi Chemical Co., Ltd.  ("Hitachi  Chemical") in
connection with its latent curing catalyst systems,  Fresh Express  Incorporated
("Fresh  Express") in connection with its breathable  membrane  products,  Nitta
Corporation  ("Nitta")  and Hitachi  Chemical in  connection  with its  adhesive
products and Smith & Nephew  Medical  Limited  ("Smith & Nephew") in  connection
with  its  QuickCast  orthopedic  products.  The  Company  is  dependent  on its
corporate  partners to develop,  test,  manufacture and/or market certain of its
products.   Although   the  Company   believes   that  its   partners  in  these
collaborations  have an  economic  motivation  to  succeed in  performing  their
contractual  responsibilities,  the

                                       10

<PAGE>

amount and timing of resources to be devoted to these  activities are not within
the control of the Company.  A significant  portion of Landec's revenues to date
have been derived from commercial  research and development  collaborations  and
license  agreements.  In the  second  quarter of fiscal  year 1996,  development
funding from these collaborative arrangements comprised approximately 78% of the
Company's  total  revenues.  Development  funding and license  fees from product
sales to  BFGoodrich,  Hitachi  Chemical,  Nitta and Smith & Nephew  represented
approximately  69% of the  Company's  revenues for the second  quarter of fiscal
year 1996.  Moreover,  research  and  development  revenue and license fees from
Nitta  accounted for a significant  portion of the Company's  total revenues for
the second  quarter of fiscal  year 1996.  There can be no  assurance  that such
partners  will perform  their  obligations  as expected or that the Company will
derive any additional revenue from such arrangements.  There can be no assurance
that the Company's  partners will pay any  additional  option or license fees to
the  Company  or that  they will  develop  and  market  any  products  under the
agreements.  Moreover, certain of the collaborative agreements provide that they
may be terminated at the discretion of the corporate partner, and certain of the
collaborative agreements provide for termination under certain circumstances.

In March of 1996,  the Company  agreed to amend their  research and  development
collaboration  with BFGoodrich in the industrial  latent curing area by removing
the exclusivity restrictions. This amendment will allow Landec to explore direct
distribution  and other licensing and product  development  opportunities  while
continuing the  collaboration  with  BFGoodrich on a non-exclusive  basis.  This
change  could  result in a  short-term  reduction  in research  and  development
revenues.

There  can be no  assurance  that the  partners  will  not  pursue  existing  or
alternative technologies in preference to the Company's technology. Furthermore,
there can be no assurance that the Company will be able to negotiate  additional
collaborative arrangements in the future on acceptable terms, if at all, or that
such  collaborative  arrangements  will be  successful.  To the extent  that the
Company  chooses not to or is unable to establish  such  arrangements,  it would
experience  increased capital  requirements to undertake research,  development,
manufacture,  marketing  or sale of its  current  and  future  products  in such
markets.   There  can  be  no  assurance  that  the  Company  will  be  able  to
independently  develop,  manufacture,  market,  or sell its  current  and future
products in the absence of such collaborative agreements.

         Competition and  Technological  Change.  The Company operates in highly
competitive and rapidly  evolving  fields,  and new developments are expected to
continue at a rapid pace.  Competition  from large  industrial,  food packaging,
medical and agricultural  companies is expected to be intense. In addition,  the
nature of the Company's  collaborative  arrangements may result in its corporate
partners  becoming  competitors of the Company.  Many of these  competitors have
substantially  greater  financial and technical  resources  and  production  and
marketing  capabilities  than the Company,  and may have  substantially  greater
experience  in  conducting  clinical  and  field  trials,  obtaining  regulatory
approvals and manufacturing and marketing commercial  products.  There can be no
assurance  that these  competitors  will not succeed in  developing  alternative
technologies  and  products  that  are  more  effective,  easier  to use or less
expensive  than those which have been or are being  developed  by the Company or
that  would  render  the  Company's   technology   and  products   obsolete  and
non-competitive.

         Limited  Manufacturing  Experience;  Dependence on Third  Parties.  The
Company's  success is  dependent  in part upon its  ability to  manufacture  its
products in commercial quantities in compliance with regulatory requirements and
at acceptable costs.  There can be no assurance that the Company will be able to
achieve this. The Company has experienced negative gross margins for its product
sales to date.  The  Company  intends  to build or acquire  large-scale  polymer
manufacturing   and   formulations    facilities   by   1998.    Production   in
commercial-scale  quantities may involve  technical  challenges for the Company.
Establishing  its  own  manufacturing  capabilities  would  require  significant
scale-up  expenses and additions to facilities  and  personnel.  The Company may
also  consider  seeking  collaborative  arrangements  with  other  companies  to
manufacture  certain of its  products.  If the Company is  dependent  upon third
parties for the manufacture of its products,  then the Company's  profit margins
and its ability to develop and deliver  such  products on a timely  basis may be
adversely affected.  Moreover,  there can be no assurance that such parties will
adequately perform and any failures by third parties may delay the submission of
products  for  regulatory  approval,  impair  the  Company's  ability to deliver
products  on a timely  basis,  or  otherwise  impair the  Company's  competitive
position.  The occurrence of any of these factors could have a material  adverse
effect on the Company's business, operating results and financial condition. The
manufacture of the Company's products will be subject to periodic  inspection by
regulatory authorities.  There can be no assurance that the Company will be able
to obtain necessary  regulatory approvals on a timely basis or at all. Delays in
receipt 

                                       11

<PAGE>

of or failure to receive such approvals or loss of previously received approvals
would  have a  material  adverse  effect on the  Company's  business,  financial
condition and results of operations.

         Dependence on Single Source  Suppliers.  Many of the raw materials used
in manufacturing  certain of the Company's products are currently purchased from
a  single  source,  including  certain  monomers  used to  synthesize  Intelimer
polymers and substrate materials for the Company's breathable membrane products.
Upon  manufacturing  scale-up,  the  Company may enter into  alternative  supply
arrangements.  Although  to date  the  Company  has not  experienced  difficulty
acquiring  materials for the  manufacture  of its products,  no assurance can be
given that  interruptions  in supplies  will not occur in the  future,  that the
Company will be able to obtain substitute  vendors,  or that the Company will be
able to  procure  comparable  materials  at similar  prices  and terms  within a
reasonable  time. Any such  interruption of supply could have a material adverse
effect on the Company's  ability to manufacture its products and,  consequently,
could materially and adversely affect the Company's business,  operating results
and financial condition.

         Patents and Proprietary  Rights. The Company's success depends in large
part on its ability to obtain  patents,  maintain  trade secret  protection  and
operate without infringing on the proprietary rights of third parties. There can
be no assurance that any pending patent applications will be approved,  that the
Company will develop additional  proprietary products that are patentable,  that
any patents  issued to the Company  will  provide the Company  with  competitive
advantages or will not be challenged by any third parties or that the patents of
others will not  prevent the  commercialization  of products  incorporating  the
Company's technology.  The Company has received,  and may in the future receive,
from third parties, including some of its competitors,  notices claiming that it
is infringing third party patents or other proprietary rights. For example,  the
Company  recently  received  a letter  alleging  that the  Company's  breathable
membrane   product   infringes   patents  of  another  party.  The  Company  has
investigated this matter and believes that its breathable  membrane product does
not infringe the  specified  patents of such party.  The Company has received an
opinion of patent counsel that the breathable membrane product does not infringe
any  valid  claims  of  such  patents.  If the  Company  were  determined  to be
infringing any third-party patent, the Company could be required to pay damages,
alter its products or processes, obtain licenses or cease certain activities. If
the Company is required to obtain any licenses,  there can be no assurance  that
the Company will be able to do so on  commercially  favorable  terms, if at all.
Litigation,  which could result in substantial  costs to and diversion of effort
by the Company,  may also be necessary to enforce any patents issued or licensed
to the Company or to determine the scope and validity of third-party proprietary
rights. Any such litigation or interference  proceeding,  regardless of outcome,
could be  expensive  and  time  consuming  and  could  subject  the  Company  to
significant liabilities to third parties, require disputed rights to be licensed
from third  parties or require the Company to cease using such  technology  and,
consequently,  could have a material  adverse effect on the Company's  business,
operating results and financial condition.

         Government  Regulation.  The  Company's  products  and  operations  are
subject to  substantial  regulation in the United States and foreign  countries.
Although  Landec  believes  that it will be able to comply  with all  applicable
regulations  regarding  the  manufacture  and sale of its  products  and polymer
materials,  such  regulations are always subject to change and depend heavily on
administrative  interpretations  and the country in which the products are sold.
There can be no assurance that future changes in regulations or  interpretations
relating  to  such  matters  as  safe   working   conditions,   laboratory   and
manufacturing  practices,  environmental  controls, and disposal of hazardous or
potentially  hazardous  substances  will  not  adversely  effect  the  Company's
business.  There can be no  assurance  that the Company  will not be required to
incur  significant costs to comply with such laws and regulations in the future,
or that such laws or regulations  will not have a material adverse effect on the
Company's business, operating results and financial condition. Failure to comply
with the applicable  regulatory  requirements can, among other things, result in
fines,  injunctions,  civil  penalties,  suspensions or withdrawal of regulatory
approvals,   product  recalls,   product   seizures,   including   cessation  of
manufacturing and sales, operating restrictions and criminal prosecution.

         Limited  Sales or  Marketing  Experience.  The Company has only limited
experience  marketing  and selling its  products.  While the Company  intends to
distribute  certain of its  products  through its  corporate  partners and other
distributors,  the Company  intends to sell  certain  other  products  through a
direct sales force.  Establishing  sufficient marketing and sales capability may
require significant  resources.  There can be no assurance that the Company will
be able to recruit and retain skilled sales management,  direct  salespersons or
distributors,  or that the  Company's  sales  efforts  will be  successful.  The
Company is currently in the process of changing its  distribution 

                                       12

<PAGE>

approach  with respect to the  QuickCast  product  line in the United  States to
include  several  national  distributors.  To the extent that the Company enters
into distribution arrangements for the sale of its products, the Company will be
dependent on the efforts of third  parties.  There can be no assurance that such
efforts will be successful.

         International Operations and Sales. In the second quarter of the fiscal
year 1995 and 1996,  approximately  66% of the  Company's  total  revenues  were
derived from product sales to and  collaborative  agreements with  international
customers,  and the Company expects that international revenues will continue to
account for a significant  portion of its total revenues.  A number of risks are
inherent in international  transactions.  International sales and operations may
be limited or disrupted by the regulatory approval process, government controls,
export  license  requirements,  political  instability,  price  controls,  trade
restrictions,  changes in tariffs  or  difficulties  in  staffing  and  managing
international  operations.  Foreign  regulatory  agencies  have or may establish
product standards  different from those in the United States,  and any inability
to obtain foreign  regulatory  approvals on a timely basis could have an adverse
effect on the Company's  international  business and its financial condition and
results of operations.  While the Company's foreign sales are priced in dollars,
fluctuations in currency  exchange rates may reduce the demand for the Company's
products by increasing  the price of the  Company's  products in the currency of
the  countries to which the products  are sold.  There can be no assurance  that
regulatory,  geopolitical  and  other  factors  will not  adversely  impact  the
Company's  operations in the future or require the Company to modify its current
business practices.

         Quarterly  Fluctuations in Operating Results.  The Company's results of
operations  have  varied  significantly  from  quarter  to  quarter.   Quarterly
operating  results will depend upon several  factors,  including  the timing and
amount of expenses  associated  with  expanding  the Company's  operations,  the
timing of collaborative agreements with, and performance of, potential partners,
the  timing of  regulatory  approvals  and new  product  introductions,  the mix
between  pilot  production  of new  products  and  full-scale  manufacturing  of
existing  products and the mix between  domestic and export sales.  In addition,
the Company cannot  predict rates of licensing fees and royalties  received from
its  partners  or  ordering  rates  by its  distributors,  some of  which  place
infrequent stocking orders, while others order at regular intervals. 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 become or remain consistently  profitable in the
future.

         Product Liability Exposure and Availability of Insurance.  The testing,
manufacturing,  marketing,  and  sale of the  products  being  developed  by the
Company involve an inherent risk of allegations of product  liability.  While no
product liability claims have been made against the Company to date, if any such
claims  were made and  adverse  judgments  obtained,  they could have a material
adverse  effect on the Company's  business,  financial  condition and results of
operations.  Although the Company has taken and intends to continue to take what
it  believes  are  appropriate  precautions  to  minimize  exposure  to  product
liability  claims,  there can be no  assurance  that it will  avoid  significant
liability.  The Company currently  maintains product liability  insurance in the
amount of $1.0 million per claim with an annual aggregate limit of $2.0 million.
There can be no assurance  that such coverage is adequate or will continue to be
available at an acceptable cost, if at all. A product  liability claim,  product
recall or other  claim with  respect to  uninsured  liabilities  or in excess of
insured  liabilities  could  have a  material  adverse  effect on the  Company's
business, operating results and financial condition.

         No Prior Public  Market;  Possible  Volatility of Stock Price.  Factors
such as  announcements  of  technological  innovations,  the  attainment  of (or
failure  to  attain)  milestones  in  the  commercialization  of  the  Company's
technology,  new  products,  new  patents  or changes in  existing  patents,  or
development of new,  collaborative  arrangements by the Company, its competitors
or other parties, as well as government regulations,  investor perception of the
Company,  fluctuations  in the Company's  operating  results and general  market
conditions  in the industry may cause the market price of the  Company's  Common
Stock to fluctuate  significantly.  In addition, the stock market in general has
recently  experienced  extreme  price  and  volume   fluctuations,   which  have
particularly  affected the market prices of technology  companies and which have
been  unrelated to the  operating  performance  of such  companies.  These broad
fluctuations  may  adversely  effect the market  price of the  Company's  Common
Stock.

                                       13

<PAGE>



 
                          PART II. OTHER INFORMATION




Item 1.  Legal Proceedings

         None.


Item 2.  Changes in Securities

         None.


Item 3.  Defaults in Senior Securities

         None.


Item 4.  Submission of Matters to a Vote of Security Holders

         None.


Item 5.  Other Information

         None.


Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits.

                  10.12+  Agreement   dated   February   26,  1996  between  the
                          Registrant and Nitta Corporation.

                  10.13   Letter dated March 29, 1996  regarding  the  Agreement
                          dated as of July 29, 1995 between the  Registrant  and
                          BFGoodrich Company.

                  11.1    Computation of loss per share (see Note 1 to Financial
                          Information in Part I of this Form 10-Q).

         (b)      Reports on Form 8-K.

                  None.



+CONFIDENTIAL TREATMENT REQUESTED.


                                       14


<PAGE>


                                   SIGNATURES


         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, thereunto duly authorized.

                             LANDEC CORPORATION


                             By:/s/                 JOY T. FRY
                                -----------------------------------------------
                                                    Joy T. Fry
                                    Vice President, Finance and Administration
                                            and Chief Financial Officer
                                  (Duly Authorized and Principal Financial and
                                   Accounting Officer)


Date:    June 7, 1996

                                       15


<PAGE>


<TABLE>
                               LANDEC CORPORATION


                                INDEX TO EXHIBITS
<CAPTION>

Exhibit                                                                                   Sequentially Numbered
Number                                                Exhibit                                      Page

<C>                         <C>                                                                     <C>
10.12+                      Agreement  dated  February 26, 1996 between the  Registrant             17
                            and Nitta Corporation.
10.13                       Letter dated March 29, 1996 regarding the Agreement dated               31
                            as of July 29, 1995 between the Registrant and BFGoodrich Company.
11.1                        Statement Regarding Computation of Net Loss Per Share                   32
27                          Financial Data Schedule                                                 33
</TABLE>




+CONFIDENTIAL TREATMENT REQUESTED.



                                       16







                                    AGREEMENT


THIS  AGREEMENT  is made  and  entered  into  this  Twenty-sixth  (26th)  day of
February,  1996 by and between LANDEC CORPORATION,  a corporation of California,
having its  principal  place of  business  at 3603  Haven  Avenue,  Menlo  Park,
California 94025, U.S.A. (hereinafter called "LANDEC") and NITTA CORPORATION,  a
corporation of Japan,  having its principal place of business at 8-12.  Hommachi
1-chome. Chuo-ku. Osaka. 541. Japan (hereinafter called "NITTA"),

                                   WITNESSETH:

         WHEREAS, LANDEC is engaged in development, manufacture, use and sale of
Adhesives and owns and controls patents and know-how therefor; and

         WHEREAS,  NITTA is  engaged  in  development,  manufacture  and sale of
chemicals  including  adhesives  and other  industrial  products  and  possesses
experience in connection therewith; and

         WHEREAS,  NITTA  desires to  manufacture  and sell  products made using
LANDEC's  know-how  and/or  patents  and  LANDEC is willing to grant a right and
license thereto to NITTA.

         NOW,  THEREFORE,  in consideration of the mutual covenants and premises
contained herein, both parties have agreed as follows:

1        ARTICLE 1  DEFINITIONS

         1.1 The  following  terms as used herein  shall have the  meanings  set
forth below:

                  1.1.1 "Adhesives" shall mean temperature  sensitive
  adhesives
containing  side-chain  crystallizable  polymer,  which shall  include  LANDEC's
proprietary adhesives such as XXXXXXXXX  XXXXXXXXXXXXX Adhesives as explained in
detail in Appendix 1 hereof.

                  1.1.2   "Patents"   shall  mean  those   patents   and  patent
applications   listed  in  Appendix  2  and  patents  issuing  from  the  patent
applications  listed in Appendix 2 and any patents  covering new improvements to
the Licensed  Technology and within the claims of the patents listed in Appendix
2, provided such improvement is invented by LANDEC while NITTA is funding R&D at
LANDEC or paying royalties to LANDEC pursuant to Article 4.

                  1.1.3  "Know-How"  shall  mean any and all  technology,  trade
secrets,  non-patented  improvements and other confidential information relating
to processes, compositions,  fabrications,  manufacturing,  scale-up and uses of
the Adhesives  which LANDEC owns or controls and has the right to freely dispose
of while NITTA is funding R&D at LANDEC or paying  royalties to LANDEC  pursuant
to Article 4.

                  1.1.4   "Licensed   Technology"   shall  mean  Patents  and/or
Know-How.

                  1.1.5   "Subject   Adhesives"   shall   mean   the   Adhesives
incorporating, made with or using all or part of Licensed Technology.

                  1.1.6  "Territory"  shall  mean Asian  countries  as listed in
Appendix 3.

                                       1

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

                  1.1.7  "Field"  shall  mean  medical  applications  of Subject
Adhesives in the following product categories which are defined in Appendix 4:

                 * XXXXXXXXXXXXXXXXXXXXXXXX           * XXXXXXXXXXXXX    
                 * XXXXXXXXXXXXXXXXXXXXX              * XXXXXXXXXXXXXXXXX
                 * XXXXXXXXXXXXXX                     * XXXXXXXXXXXXXXXX 
                 * XXXXXXXXXXXXXX                     * XXXXXXXXXXXXXXXXX
                 * XXXXXXXXXXXXX                      * XXXXXXXXXXXXXXXX 
                 * XXXXXXXXXXXXXXXXXXXX               * XXXXXXXXXXXXXXX  
                 * XXXXXXXXXXXXXXXXXXXX              
           

Other  product  categories  will be added by mutual  consent.  The parties  will
discuss  inclusion  or  exclusion  of  any  product  regarding  which  there  is
uncertainty as to its being in the Field.

                  1.1.8    "Products" shall mean:

                           (i) Subject  Adhesives  themselves  which are sold by
NITTA  in  unincorporated  form or  consumed  by NITTA  in  manufacturing  NITTA
products  such that the  properties  and benefits of Subject  Adhesives  are not
evident to customer;

                           (ii)  Tapes,   films,  coated  substrates  and  other
products  incorporating  Subject  Adhesives such that the Subject  Adhesives add
value to the  product and the user  directly  receives  the  benefits of Subject
Adhesives; and

                           (iii)  Tapes,  films,  coated  substrates  and  other
products  incorporating  Subject  Adhesives  which are sold in conjunction  with
components or parts which components or parts have  significant  intrinsic value
to the customer.

                           (iv)  Adhesive  coated  intermediates  (semi-finished
goods,  coated  substrates in sheets or rolls)  incorporating  Subject Adhesives
which are sold to  customers  who will  convert  such  intermediates  into final
products.

                  1.1.9 "NITTA's  Subsidiaries"  shall mean the  corporations of
which  NITTA  or the  NITTA  family  owns  fifty  percent  (50%)  or more of the
outstanding stock.

                  1.1.10 "Net Sales" shall mean the gross  invoice  price of the
Products less i) credits for products  returned,  quantity and other  discounts,
and ii) charges for packaging,  shipping,  insurance,  and sales taxes which are
separately identified and invoiced and paid by the customer.

                  1.1.11 "Fair Market Value" shall mean the net invoice price of
the Products  which NITTA would receive from an  unaffiliated  third party in an
arm's  length  sale of the  Products  of the  same  type  and  grade in the same
quantity and at the same time and place of use or sale.

                  1.1.12  "Effective  Date"  shall  mean the date and year  upon
which this Agreement is executed.

                  1.1.13  "Commercial  Launch"  shall  mean  the  date  when the
accumulated Net Sales and Fair Market Value shall reach XXXXXXXXXXX Japanese Yen
((Y)XXXXXXXXX).

                  1.1.14 Development Program shall have the meaning put forth in
Article 3.

                                       2

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>


2        ARTICLE 2  GRANT OF LICENSES

         2.1 In accordance with the provisions provided herein, LANDEC grants to
NITTA an exclusive  license  under the Licensed  Technology  within the Field to
make and have made Subject Adhesives in the Territory.

         2.2 LANDEC also grants to NITTA an exclusive license under the Licensed
Technology within the Field to use and sell Subject Adhesives in the Territory.

         2.3  NITTA  shall  have  the  right  to grant  sublicenses  to  NITTA's
Subsidiaries with prior written notice to LANDEC and on the condition that NITTA
agrees to guarantee such NITTA Subsidiaries' fulfillment of the obligation under
this Agreement.

         2.4 NITTA  shall  not nor shall  NITTA  allow its  distributors  or its
customers to resell or transfer the Subject  Adhesives  themselves  knowingly in
unincorporated  form outside the  Territory,  or in forms such that the user who
resides outside the Territory is able to directly utilize the Subject  Adhesives
benefits and properties.

         2.5 NITTA will have the right to use subcontractors to perform adhesive
coating  and  other  conversion  processes  on  NITTA's  behalf  as long as such
subcontractors agree to comply with the Confidentiality  provisions set forth in
Article 10 of this Agreement.

3        THE DEVELOPMENT PROGRAM

         3.1  LANDEC  and  NITTA  anticipate  the need  for  LANDEC  to  provide
assistance and support to NITTA's research and development regarding the Subject
Adhesives.  Within fourteen (14) days after the Effective Date, the Parties will
mutually agree on a written Development Program. The "Development Program" shall
mean work  performed  jointly or  independently  by LANDEC and NITTA pursuant to
Article 3. Such work  shall be funded by NITTA as set forth in  Article  3.2 and
shall encompass the following:

                  i) Research and development  regarding  Subject  Adhesives for
applications  in the Field as well as for  industrial  applications  of  Subject
Adhesive which were licensed to NITTA in a prior  agreement dated March 14, 1995
for which development support has been provided by LANDEC since January 1, 1996;

                  ii) Polymer  synthesis,  adhesive  formulation  and coating of
substrates by LANDEC; and

                  iii) Testing,  polymer scale-up and manufacture of Products by
NITTA.

LANDEC agrees to provide  NITTA with  reasonable  quantities of research  sample
polymers and pilot scale coated  samples at no additional  charge as part of the
Development  Program. The amount of such samples shall be mutually agreed in the
Development Program.

         3.2 NITTA  shall  provide  LANDEC  with  funding  for the amount of the
Development  Program at the rate of XXXXXXXXXXXXX  dollars ($XXXXX) per year for
the first XXXXX years after the Effective  Date  reflecting  XXXX  man-years per
year  at  LANDEC's  annual  cost-per-scientist  of  XXXXXXXXXXXXXXXXXX   dollars
($XXXXX).  Such funding  shall be made in two  installments  of  XXXXXXXXXXXXXXX
dollars ($XXXXX) each. The first such installment shall be paid to LANDEC within
fourteen (14) days of the Effective  Date and shall be retroactive to January 1,
1996. The second installment shall be paid on January 1, 1997.


                                       3

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

4        ARTICLE 4  COMPENSATION

        4.1 In consideration of the rights and licenses granted  hereunder,  and
in addition to the funding set forth in Article 3.2, NITTA shall pay to LANDEC a
non-refundable sum of XXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXX U.S. Dollars (U.S.
$XXXXXX) (not to be less than U.S.  $XXXXXX net after  deduction of the Japanese
withholding taxes) as an initial fee under this Agreement.

         4.2 NITTA  shall  also pay to LANDEC a running  royalty  at the rate of
XXXX percent  (XX%) of Net Sales of Products  when sold to third  parties  other
than NITTA's  Subsidiaries and NITTA, or of Fair Market Value when used by NITTA
or sold to NITTA's  Subsidiaries  or NITTA.  Such  royalty on Products  shall be
payable   until   XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX   or  XXXXXXXX   years  from
Commercial Launch of such Product, whichever is longer.

         4.3  For  the  sale  of  any  Product  in a  given  calendar  year  the
manufacture, use or sale of which does not come within the scope of any licensed
Patent in the  country in which  such  Product  is  manufactured,  used or sold,
LANDEC  agrees to discuss with NITTA a  XXXXXXXXXXXXXX  in such country based on
the XXXXXXXXXXXXXXXXXXXXX as measured by XXXXXXXXXXXXXXXXXX.

5        ARTICLE 5  PAYMENTS AND REPORTS

         5.1 Payment of initial fee in accordance with Article 4.1 shall be made
within XXXXXXXXXXXXX days after the Effective Date of this Agreement.

         5.2 Payments of running  royalty shall be made  quarterly  within XXXXX
days after the end of each  calendar  quarter each year for the Products sold or
used during the applicable  calendar  quarter.  The last running royalty payment
hereunder  shall be made within XXXXXXX days from the  termination  date hereof,
and the Products made during the term of this Agreement but remaining  unsold or
unused at its  termination  shall be deemed to have been sold on the last day of
the  term of  this  Agreement  and the  running  royalty  shall  be paid on such
Products in accordance with this Article 5.

         5.3 All the payments to be made to LANDEC  hereunder shall be net after
deducting  withholding  taxes to be imposed by the tax authority of Japan at the
rate  specified  by the  government  authority,  and  NITTA  shall  send  LANDEC
appropriate  tax  certificates  issued  by the tax  authority  of  Japan on such
withholding taxes.

         5.4 The  payments  due under  Articles  3, 4 and this  Article 5 hereof
shall be made to LANDEC by  telegraphic  transfer  in U.S.  Dollars  to the bank
account  designated  by LANDEC.  The running  royalties  due under  Articles 5.3
hereof shall be initially  calculated  in the currency  used in the sales of the
Products or the currency of the country  where the  Products are used,  and then
converted  into U.S.  dollars  at the  prevailing  rate of  exchange  as used by
Sakura,  Sanwa or Tokai Banks on the day on which the  respective  payments  are
made.

         5.5 NITTA shall pay to LANDEC  interest  calculated  at the rate of one
and one-half percent (1.5%) per month for the days of delay from the due date on
any payment not received by LANDEC on the due date.

         5.6 Within sixty (60) days from the last day of each  calendar  quarter
respectively  of each year,  NITTA  shall  prepare  and send to LANDEC a written
statement  showing in detail the  production,  sale and use of Products  and the
royalty amounts to be paid for the applicable calendar quarter.

6        ARTICLE 6  INSPECTION OF ACCOUNTS

                                       4

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

         6.1 NITTA shall keep true and accurate records and books of account, in
accordance with generally  accepted  accounting  principles,  containing all the
data  reasonably  required  for the full  computation  and  verification  of the
running  royalty  payable under Article 5 in connection  with any Product hereof
for three (3) years after the sale or use of such  Product.  NITTA shall  permit
LANDEC or a certified  public  accountant  designated  by LANDEC and approved by
NITTA (but whose  approval  shall not  unreasonably  withheld)  upon  reasonable
notice to inspect  any or all parts of such  records and books of account and to
make copies  thereof at normal  business hours during the term of this Agreement
and within three (3) years after the termination thereof.  LANDEC shall bear the
expenses  associated  with  such  inspection,  except  in  the  case  that  such
inspection  reveals  underpayment  of royalties by greater than 5% in which case
NITTA shall reimburse LANDEC for the expenses associated with the inspection.

7        ARTICLE 7  GRANT-BACK

         7.1 NITTA  grants  to LANDEC a  XXXXXXXXXXXXXXXXX  license  to  utilize
NITTA's  XXXXXXXXXXXXXXXXXXXX  (i)  XXXXXXXXXXXXXXXXXXXXX  and (ii)  XXXXXXXXXXX
XXXXXXXXXXXXXX.

         7.2 NITTA  grants to LANDEC an  XXXXXXXXX  license  with the  XXXXXXXXX
XXXXXXXX to utilize NITTA's patented and non-patented (know-how) improvements to
Licensed  Technology  XXXXXXXXXXXX.  The royalty will be XXXX  percent  (XX%) of
LANDEC's net sales of products using such patented improvements.

8        ARTICLE 8  MEETINGS

         8.1  NITTA and  LANDEC  will  meet at least  twice per year to  discuss
technical  and  commercial  progress and  information  exchange  relating to the
Licensed  Technology in the initial  period of two (2) years after the Effective
Date during the term of this Agreement at the expense of each  respective  party
and may meet at any time both of the parties  should so desire and agree  during
the remaining term of this Agreement.

9        ARTICLE 9  SUPPLY OF SUBJECT ADHESIVES

         9.1  If  NITTA  decides  in  the  future  not  to  manufacture  Subject
Adhesives,  NITTA will give LANDEC the first opportunity to be NITTA's supplier.
If LANDEC is supplying  Subject  Adhesives to NITTA,  the parties will negotiate
the method of payment such that a single  method of paying  royalties and supply
payments is used.

10       ARTICLE 10  SECRECY OBSERVANCE

         10.1 Except as  expressly  set forth in 2.3 and 7.2, any Know-How to be
exchanged  hereunder  between LANDEC and NITTA shall be only for the recipient's
use for the  purpose  of this  Agreement,  and the  recipient  shall  keep  such
information in strict confidence during the term of this Agreement and for three
(3)  years  thereafter  and shall not  disclose  the same to any third  parties,
provided, however, such obligations shall not apply if the recipient can provide
documented proof that:

                  10.1.1 Such  information  already is known to the recipient at
the time of the disclosure by the disclosing party to the recipient.

                  10.1.2  Such  information  had  already  been made  public and
entered the public domain at the time of disclosure by the  disclosing  party to
the recipient; or has become public and entered the public domain since the time
of  disclosure  by the  disclosing  party to the  recipient  without  any  cause
attributable to the recipient;

                                       5

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

                  10.1.3  Such  information  has been  lawfully  obtained by the
recipient since the time of disclosure by the disclosing  party to the recipient
from a third party under no obligation of secrecy to the disclosing party;

                  10.1.4 Such  information  has been  independently  acquired or
developed by the recipient without reference to any information disclosed by the
disclosing  party hereunder since the time of disclosure by the disclosing party
to the recipient; or

                  10.1.5 Such  information  has been disclosed by the disclosing
party to any third party without any obligation of secrecy.

11       ARTICLE 11  BANKRUPTCY

         11.1 The parties  acknowledge  that the license rights granted to NITTA
in Licensed  Technology are protected by Section 365 (n) of the U.S.  Bankruptcy
Code. In the event that any bankruptcy court rejects this Agreement,  NITTA will
have the right to exercise all rights  provided by Section 365 (n) including the
right to require the trustee to deliver to NITTA all tangible embodiments of all
Licensed Technology pertaining to the Subject Adhesives.

12       ARTICLE 12  TERMINATION

         12.1 This Agreement  shall become  effective as of the Effective  Date.
NITTA shall have the right to  terminate  this  Agreement  with 90 days  written
notice to LANDEC.

         12.2 In case when this  Agreement  should  expire  in  accordance  with
Article 4.2,  NITTA then shall have a fully paid up  perpetual  right to utilize
Licensed Technology as to such Product.

         12.3  NITTA  shall  make  a  reasonable  effort  to  commercialize  the
Products. If NITTA has not launched a Product containing or utilizing any of the
Subject  Adhesives in all countries  within the Territory  within five (5) years
after the  Effective  Date of this  Agreement,  the  Parties  shall  negotiate a
modification to the Territories such that NITTA's license hereunder with respect
to  countries  in which no product  has been  launched  or royalty has been paid
shall become non-exclusive or revoked.

         12.4 Either party may terminate this Agreement by written notice of its
intention to terminate  on a date  therein  specified  not less than thirty (30)
days after the date of giving such notice, if the other party shall:

                  12.4.1  be in  default  in  the  performance  of  any  of  the
provisions  of this  Agreement  on its part to be  performed  and shall  fail to
remedy or correct such default within thirty (30) days after the receipt of such
notice from the other party specifying the event of default; or

                  12.4.2 become insolvent or go into liquidation or receivership
or be admitted to the benefits of any procedure for the settlement of debt or be
declared bankrupt or be dissolved.

No such termination shall affect any right accrued at the time of termination or
discharge the  defaulting  party from any  liability  then existing to the other
party,  provided,  however,  that  (i) if  NITTA  is the  party  whose  default,
insolvency,  liquidation or receivership  has caused such termination then NITTA
shall not have any right or license to use specifically identified trade secrets
and  the  Licensed  Technology  (with  the  exception  of  Know-How)  after  the
termination  of this  Agreement,  or (ii) if LANDEC is the party whose  default,
insolvency,  liquidation or receivership has caused such termination then LANDEC
shall not have any right or license to use NITTA's specifically identified trade
secrets and patented improvements to the 

                                       6

<PAGE>

Licensed  Technology  (with the  exception  of  know-how)  pursuant to Article 7
hereof after the termination of this Agreement.

         12.5  Notwithstanding  the other  provisions  of this  Article  12, the
provisions  of Articles 3, 4, 5, 6.1, 7 (only to the extent  that  patented  and
non-patented  improvements  have  already  been  granted to LANDEC and for which
LANDEC is paying a royalty to NITTA), 10, 12.2, 12.5, 13.1, 17.1, 18.1, 19.1 and
21 shall survive the termination or expiration of this Agreement.

13       ARTICLE 13  WARRANTY

         13.1 LANDEC HEREBY  REPRESENTS AND WARRANTS THAT (WITH THE EXCEPTION OF
INFORMATION  LISTED IN APPENDIX 5) AS OF THE EFFECTIVE  DATE IT IS NOT CURRENTLY
AWARE OF ANY THIRD  PARTY  PATENT OR PATENTS  WHICH  WOULD BE  INFRINGED  BY THE
MANUFACTURE,  USE OR SALE OF  SUBJECT  ADHESIVES.  EXCEPT  AS SET  FORTH  IN THE
PRECEDING  SENTENCE,  LANDEC  MAKES  NO  REPRESENTATION  OR  WARRANTY  THAT  THE
MANUFACTURE,  USE OR SALE OF ANY SUBJECT ADHESIVES OR PRODUCTS BY NITTA DOES NOT
INFRINGE ANY PATENT OR  INTELLECTUAL  PROPERTY  RIGHT HELD BY THE THIRD PARTIES,
AND LANDEC  SPECIFICALLY  DISCLAIMS ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR  PURPOSE.  NITTA shall  indemnify and hold LANDEC harmless from
any claim, liability, expense or damages arising from NITTA's manufacture,  use,
sale or other disposition of the Products.

14       INFRINGEMENT OF PATENTS

        14.1  Notification  of  Infringement.  Each party shall advise the other
promptly upon its becoming aware of any third party infringement of a Patent.

         14.2  Action by  Landec.  Landec  agrees,  within  reasonable  business
judgment and at its own discretion,  to promptly take such action as is required
to  restrain  such  infringement.  NITTA  shall  cooperate  fully with LANDEC at
NITTA's expense in LANDEC's  attempt to restrain such  infringers.  NITTA may be
represented  by counsel of its own  selection  at its own expense at any suit or
proceeding  brought by LANDEC to restrain such  infringement  provided that such
representation  of NITTA  shall be subject to LANDEC's  overall  control of such
suit or proceeding. LANDEC shall bear the expense of its prosecution of any such
suit or suits and shall obtain all benefits of the recoveries  from such suit or
suits, whether by judgment, award, decree or settlement.

         14.3  Action by NITTA.  If within  sixty (60) days of NITTA's  advising
LANDEC of a third party  infringement of a licensed patent in any Field in which
NITTA then has a license  to  operate  under  this  Agreement,  Landec  fails to
institute an infringement  suit that NITTA feels is reasonably  required,  NITTA
shall have the right, at its own discretion, within thirty (30) days thereafter,
to institute an action for  infringement.  It is agreed that in such event NITTA
can institute  any such suit in the names of both parties to this  Agreement and
that NITTA shall bear the expense of any such suit or suits and shall obtain all
of the benefits of the recoveries from such suit or suits,  whether by judgment,
award,  decree or  settlement.  Should  NITTA bring any such suit,  LANDEC shall
cooperate  in all  reasonable  ways  with  NITTA  in any  such  suit or suits at
LANDEC's  expense.  LANDEC may be represented by counsel of its own selection at
its own expense.

         14.4 Mutual  Action.  Notwithstanding  Articles  14.1 and 14.2,  if the
parties  agree to mutually  share  expenses and to pursue an  infringement  suit
together, they shall (a) share in any and all benefits in the recovery from such
suit,  whether by judgment,  award,  decree or settlement,  and (b) agree on the
lead plaintiff, selection of counsel and other litigation strategy matters.

                                       7

<PAGE>

15       INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS

In the event that (i) NITTA's use as set forth in this  Agreement of any item or
information  transferred or licensed under this  Agreement  (including,  without
limitation,  the Patents or Licensed Technology) is held by a court of competent
jurisdiction to infringe any patent or other intellectual property rights of any
other party, and (ii) such infringement  prevents NITTA from selling Products as
contemplated  hereunder,   then  after  a  final,   non-appealable  judgment  or
settlement has been reached and only to the extent that NITTA is required to pay
royalties to a third party,  NITTA shall offset against future  royalties  under
this  Agreement  derived  from the  country or  jurisdiction  of such Action any
future royalties that NITTA is obligated to pay to any third party.  NITTA shall
be  responsible  for,  and shall not  offset  damages  awarded by a court or any
license fees negotiated with the other party.

Notwithstanding any credits or offsets to the contrary,  NITTA will pay at least
XXXXX percent (XX%) of the royalties  which would otherwise be payable to LANDEC
under this Agreement.

NITTA  shall be  entitled  to credit  the amount of its  documented,  reasonable
out-of-pocket  litigation  costs  paid by  NITTA  to  third  parties,  including
attorneys'  fees,  as a result of any such action  hereunder  against  royalties
derived from the country or jurisdiction of such action due to LANDEC under this
Agreement. NITTA agrees that royalties payable to LANDEC hereunder which are not
a subject of such  action,  such as, for example,  Net Sales  derived from other
countries  shall be paid directly to LANDEC without any credits and shall not be
delayed or otherwise affected by such suit or action.

If as a result of any action, NITTA is the recipient of an award,  settlement or
license fee, or royalty, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.

16       ARTICLE 16  ASSIGNMENT

         16.1 This Agreement or any rights or  obligations  hereunder may not be
assigned or transferred by either of the parties  without prior written  consent
of the other party,  provided,  however,  such consent shall not be unreasonably
withheld.  This  Agreement will bind and inure to the benefit of the parties and
their respective successors and permitted assigns.

17       ARTICLE 17  NOTICES

         17.1 Any notice made or required hereunder shall be deemed sufficiently
given if made by registered mail (or its equivalent), or by telefax or telex and
confirmed by registered  mail,  properly  addressed and sent to the recipient at
its  designated  address.  All notices  shall be deemed to have been sent on the
registered  date and to have been  received  on the tenth  (10th)  business  day
thereafter or when actually received,  whichever is sooner. For purposes hereof,
the  designated  addresses of the parties shall be the addresses set forth below
or at such other  address as such party shall have last  designated by a writing
delivered to and received by the party giving  notice.  If to NITTA:  Mr. Takuji
Watanabe,  General  Manager  of  R&D,  NITTA  Corp.,  172  Ikezawa-cho,   Yamato
Kohriyama-shi, Japan. If to LANDEC: Mr. Steven James, Vice President of Business
and Market  Development,  LANDEC  Corporation,  3603 Haven  Avenue,  Menlo Park,
California 94025-1010, U.S.A.

18       ARTICLE 18  FORCE MAJEURE

         18.1 Neither of the parties  shall be liable for failure of  performing
its obligation  hereunder (except for payment of money) due to riot, act of God,
war,   fire,   flood,   invasion,   earthquake,    epidemic,   interruption   of
transportation,  embargo, explosion,  strike, lockout or other labor troubles or
any other  causes  similar to the  foregoing  which are  beyond  the  reasonable
control  of the party  and the  performance  of  obligation  hereunder  shall be
suspended during, but no longer than, the existence of such cause.

                                       8

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

19       ARTICLE 19  GOVERNING LAW

         19.1 This  Agreement  will be governed by and  construed in  accordance
with the laws of the State of California  applicable to agreements entered into,
and to be performed entirely, within California between California residents and
without reference to conflict of laws principles.

20       ARTICLE 20  SETTLEMENT OF DISPUTES

         20.1 Prior to the initiation of any litigation or other proceeding, the
parties  will  negotiate  in good  faith to resolve  any  dispute  between  them
regarding the Agreement.  If such negotiations do not resolve the dispute to the
satisfaction  of both parties,  then the President of LANDEC and the appropriate
Executive  Vice  President  of NITTA shall use their best efforts to resolve the
dispute prior to the initiation of any other proceeding.  If they are unable to,
the dispute shall be finally settled by binding arbitration in Honolulu,  Hawaii
under the Rules of Arbitration of the International Chamber of Commerce Court of
Arbitration,  by one mutually acceptable arbitrator appointed in accordance with
said Rules.  Judgment on the award  rendered by the arbitrator may be entered in
any  court  having  jurisdiction  thereof.  The  arbitral  proceedings  and  all
pleadings and written  evidence  shall be in the English  language.  Any written
evidence  originally  in a language  other than  English  shall be  submitted in
English translation accompanied by the original or true copy thereof.

21       ARTICLE 21  MISCELLANEOUS

         21.1 The  waiver,  express  or  implied,  by either  party of any right
hereunder  or any  failure to perform  this  Agreement  or breach  hereof by the
party,  shall  not  constitute  or be  deemed  as a waiver  of any  other  right
hereunder or of any other failure to perform this  Agreement or breach hereof by
such other party, whether of a similar or dissimilar nature hereto.

         21.2 If any article of this Agreement  should be held  unenforceable or
in conflict  with the laws of any  jurisdiction,  the validity of the  remaining
parts or articles shall continue to be valid,  and both parties shall  negotiate
in  good  faith  to  replace  such  unenforceable  or  conflicting   part(s)  or
articles(s) with a valid part(s) or article(s).

         21.3 This  Agreement  contains the entire  agreement and  understanding
between the parties and merges and supersedes all prior discussions and writings
with respect to the subject matter hereof.

         21.4 No modification or alteration of this Agreement shall be effective
unless they are made in writing and signed by duly authorized representatives of
both parties.

IN WITNESS  WHEREOF,  the parties  have caused this  Agreement to be executed in
duplicate by the duly authorized representatives of each party as of the day and
year first above written.



LANDEC CORPORATION                   NITTA CORPORATION

- - ---------------------------------    ------------------------------------
By:      Mr. Gary T. Steele          By:      Mr. Tetsushi Saito
Title:   President and CEO           Title:   Executive Vice President


                                       9


<PAGE>

                                   APPENDIX 1

Adhesives shall mean temperature  responsive  compositions  comprising a polymer
derived        from        one       or       more        monomers        having
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX,  and which side-chain units
are  crystallizable,  or an adhesive  assemblage  containing  such a temperature
responsive polymer composition as an essential ingredient,  compound or element.
Adhesives  shall also mean  Adhesives  which  have one or more of the  following
properties:

XXXXX  --  shall  mean  adhesives  which  below  a  preset  temperature  exhibit
substantially  less tack,  XXXXXXXXX peel force and wear time than  conventional
adhesives and which exhibit  tack,  XXXXXXXXXX  peel force (which when cooled is
not  reduced  by more  than  XX%)  and wear  time  substantially  equivalent  to
conventional adhesives at or above the preset temperature.

XXXXXXXX  -- shall  mean  adhesives  which  below a preset  temperature  exhibit
substantially  less tack,  XXXXXXXXXX peel force and wear time than conventional
adhesives  and which  exhibit  tack,  XXXXXXXX  peel force (which when cooled is
reduced by more than XX%) and wear time substantially equivalent to conventional
adhesives at or above the preset temperature.

XXXXXXXX  -- shall  mean  adhesives  which  below a preset  temperature  exhibit
equivalent or greater tack,  XXXXXXXXXX  peel force (which when warmed above the
preset  temperature is reduced by more than XX%) and wear time than conventional
adhesives.  XXXXXXXX comprises a XXXXXXXXXXXXXXXXX  XXXXXXXXXXXX such as XXXXXX,
and from XXXXXXXXXX of a XX molecular weight side-chain  crystallizable  polymer
as described above.

                                       10


XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>

                                   APPENDIX 2

<TABLE>

                             LANDEC Licensed Patents

<CAPTION>

- - ------------------------------------ --------------------------------------------- ----------------------------------------
<S>                                  <C>                                           <C>
U.S.A.                               XXXXX                                         XXXXX
- - ------------------------------------ --------------------------------------------- ----------------------------------------
USP 5,156,911                        XXXXXXXXXXXXXXXXX                             XXXXXXXXXXXXXXXXXX
Skin-Activated Temperature           XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX                XXXXXXXXXXXXXXXXXXXXXXXXXXX
Sensitive Adhesive Assemblies        XXXXXXXXXX                                    XXXXXXXXXXXXXXXXXXXXXXXXXX
Issued on 10/20/92                   XXXXXXXXXXXXXXXXXXXXXXX                       XXXXXXXXXXXXXXXXXX
Filed on 5/11/89                     XXXX
                                     XXXXXXXXXXXXXXXXXXXXX
- - ------------------------------------ --------------------------------------------- ----------------------------------------
USP 5,387,450                        No Corresponding XXXXXXXX Patent Application  No Corresponding XXXXXX 
Temperature-Activated Adhesive                                                     Patent Application
Assemblies
Issued on 2/7/95
Filed on 2/27/92
- - ------------------------------------ --------------------------------------------- ----------------------------------------
USP 5,412,035                        XXXXXXXXXXXXXXXXX                             No Corresponding XXXXXX
Pressure-Sensitive Adhesives         XXXXXXXXXXXXXXXXXXXXXXX                       Patent Application
Issued on 5/2/95                     XXXXXXXXXXXXXXXXXXXXXXX
Filed on 8/12/92                     XXXXXXXXXXXXXXXXXXXXXXX
                                     XXXXXXXXXXXXXXXXX
                                     XXXXXXXXXXXXXXXXXXXXXXX

- - ------------------------------------ --------------------------------------------- ----------------------------------------
USP (Pending)                        XXXXXXXXXXXXXX                                No Corresponding XXXXXX 
XXXXXXXXXXXXXXXX                     XXXXXXXXXXXXXXXXXXX                           Patent Application
XXXXXXXXX                            XXXXXXXXXXXXXXXXXXXXXX
                                     XXXXXXXXXXXX
- - ------------------------------------ --------------------------------------------- ----------------------------------------
</TABLE>


                                       11


XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>


                                   APPENDIX 3

                             List of Asian Countries


     1.   XXXXXXXXX

     2.   XXXXX

     3.   XXXXXXXXX

     4.   XXXXX

     5.   XXXXXXXXXXXXXXXXXXXX

     6.   XXXXXXXX

     7.   XXXXXXXXXXXXXXXXXXXXXXXXX

     8.   XXXXXXXXXXX

     9.   XXXXXXXXX

     10.  XXXXXX

     11.  XXXXXXXX

     12.  XXXXXXX




The names listed above are for convenience only. The term, Asia, as used in this
Agreement,  relates to the territories  encompassed by the above countries as of
the date of this Agreement.

                                       12


XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>


                                   APPENDIX 4

<TABLE>

                                   Definitions

<CAPTION>

<S>                                                            <C>   
XXXXXXXXXXXXXXXXXXXXXX.........................................XXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXX.................................................XXXXXXXXXXXXXXXXXXXXXXXXXX 
                                                               XXXX

XXXXXXXXXXXXXX.................................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXX..................................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXX...................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXX

XXXXXXXXXXXXX..................................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXX....................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXX............................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
                                                               XXXXXXX

XXXXXXXXXXXXXXXXXXXX...........................................XXXXXXXXXXXXXXXXXXXXXXXXXXXXX 
                                                               XXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXX..................................XXXXXXXXXXXXXXXXXXXXXXXXXX
</TABLE>




                                       13

XXX = CONFIDENTIAL TREATMENT REQUESTED


<PAGE>


                                   APPENDIX 5

                        Exceptions to Article 13 Warranty


1.        XXXXXXXXXXXXXXXX  patent application  XXXXXXXX (which has been opposed
          in XXXX by LANDEC with assistance from NITTA).

2.        XXXXXXXXXXXXXXXXXXXXXX patent application XXXXXXXX and XXXXXXXX.



                                       14


XXX = CONFIDENTIAL TREATMENT REQUESTED




BFGoodrich
Specialty Chemicals

BFGoodrich Specialty Chemicals
9911 Brecksville Road                                     Thomas M. Holleran
Cleveland, Ohio 44141-3247                                Vice President
800-331-1144                                              and General Manager
216-447-7579                                              Industrial Specialties
Division
FAX 216-447-5760

March 29, 1995




Mr. David Taft
Landec Corporation
3603 Haven Avenue
Menlo Park, CA 94025-1010

Dear David:

The purpose of this letter is to confirm recent  discussions  that BFGoodrich is
exercising its option to become a non-exclusive  licensee according to the terms
of our agreement, dated July 29, 1995.

Our decision to become a non-exclusive licensee is not a decision to abandon the
project,  and we look  forward  to  Landec's  continued  cooperation  as we seek
opportunities for BFGoodrich to enjoy a return from this investment.

I will  address the  questions  raised in your March 19,  1996 letter  regarding
mutual expectations in a non-exclusive relationship under separate cover.

Sincerely,



Thomas M. Holleran
Vice President & General Manager


TMH/mas






                                  Exhibit 11.1



                               LANDEC CORPORATION

<TABLE>

              STATEMENT REGARDING COMPUTATION OF NET LOSS PER SHARE
                      (In thousands, except per share data)


<CAPTION>

                                                        Three Months Ended April 30,    Six Months Ended April 30,
                                                            1996            1995           1996            1995
                                                        -------------   -------------  --------------  -------------

<S>                                                       <C>             <C>            <C>             <C>       
  Net Loss                                                $    (267)      $    (914)     $  (1,515)      $  (1,923)
                                                        =============   =============  ==============  =============


  Shares used in calculating net loss per share:
       Weighted   average  shares  of  common  stock
         outstanding                                          8,874             542          4,713             541
       SEC Staff Accounting Bulletin Topic 4D                     -             640              -             640
                                                        -------------   -------------  --------------  -------------
   Total  shares  used in  calculating  net  loss per         8,874           1,182          4,713           1,181
     share                                              =============   =============  ==============  =============
  Net loss per share                                      $   (0.03)       $  (0.77)      $  (0.32)      $   (1.63)
                                                        =============   =============  ==============  =============

  Shares used in calculating supplemental net loss 
     per share:
       Weighted   average  shares  of  common  stock
         outstanding                                          8,874             542          4,713             541
       Weighted   average   shares  of  the  assumed
         conversion    of   preferred    stock   and
         promissory notes from the date of issuance           1,142           6,553          3,996           6,519
                                                        -------------   -------------  --------------  -------------
  Total shares used in calculating  supplemental net
     loss per share                                          10,016           7,095          8,709           7,060
                                                        =============   =============  ==============  =============
  Supplemental net loss per share                         $   (0.03)      $  (0.13)      $   (0.17)      $  (0.27)
                                                        =============   =============  ==============  =============
</TABLE>






<TABLE> <S> <C>


<ARTICLE>                          5
<MULTIPLIER>                       1,000
       
<S>                                <C>
<PERIOD-TYPE>                      6-MOS
<FISCAL-YEAR-END>                  OCT-31-1996
<PERIOD-START>                     FEB-01-1996
<PERIOD-END>                       APR-30-1996
<CASH>                                  20,181
<SECURITIES>                            19,025
<RECEIVABLES>                              136
<ALLOWANCES>                               (73)
<INVENTORY>                                508
<CURRENT-ASSETS>                        40,014
<PP&E>                                   3,071
<DEPRECIATION>                           2,084
<TOTAL-ASSETS>                          41,124
<CURRENT-LIABILITIES>                    1,564
<BONDS>                                      0
<COMMON>                                68,130
<PREFERRED-MANDATORY>                        0
<PREFERRED>                                  0
<OTHER-SE>                             (29,018)
<TOTAL-LIABILITY-AND-EQUITY>            41,124
<SALES>                                    412
<TOTAL-REVENUES>                         1,694
<CGS>                                      539
<TOTAL-COSTS>                            2,437
<OTHER-EXPENSES>                             0
<LOSS-PROVISION>                             0
<INTEREST-EXPENSE>                          54
<INCOME-PRETAX>                         (1,515)
<INCOME-TAX>                                 0
<INCOME-CONTINUING>                     (1,515)
<DISCONTINUED>                               0
<EXTRAORDINARY>                              0
<CHANGES>                                    0
<NET-INCOME>                            (1,515)
<EPS-PRIMARY>                            (0.32)
<EPS-DILUTED>                            (0.32)
        


</TABLE>