EXHIBIT 10.4
 
EIGHTH MODIFICATION TO
LOAN AND SECURITY AGREEMENT
 
This Eighth Modification to Loan and Security Agreement (this “Amendment”) is
entered into as of September 4, 2013, by and among THE PRIVATEBANK AND TRUST
COMPANY (the “Bank”), LIFEWAY FOODS, INC., an Illinois corporation (“Lifeway”),
FRESH MADE, INC., a Pennsylvania corporation (“FMI”), HELIOS NUTRITION LIMITED,
a Minnesota corporation (“Helios”), PRIDE OF MAIN STREET DAIRY, LLC, a Minnesota
limited liability company (“Pride”), and STARFRUIT, LLC, an Illinois limited
liability company (“Starfruit”), and LIFEWAY WISCONSIN, INC., an Illinois
corporation (“LWI” and together with Lifeway, FMI, Helios, Pride and Starfruit
being sometimes collectively referred to as the “Borrowers”).
 
RECITALS
 
WHEREAS, the Bank and the Borrowers (other than LWI) previously entered into a
Loan and Security Agreement dated February 6, 2009, as amended by that certain
First Modification to Loan and Security Agreement dated as of August 13, 2009,
by that certain Second Modification to Loan and Security Agreement dated
November 12, 2009, by that certain Third Modification to Loan and Security
Agreement dated February 6, 2010, by that certain Fourth Modification to Loan
and Security Agreement dated as of April 20, 2011, by that certain Fifth
Modification to Loan and Security Agreement dated as of June 20, 2011, by that
certain Sixth Modification to Loan and Security Agreement dated as of June 13,
2012 and by that certain Seventh Modification to Loan and Security Agreement
dated as of May 14, 2013 (as modified, the “Loan Agreement”), pursuant to which
the Bank made available to the Borrowers a credit facility.
 
WHEREAS, the Borrowers desire, and the Bank is willing, to extend the 2013 Term
Loan (as hereinafter defined) to Borrowers, all upon and subject to the terms
and conditions set forth in this Amendment; and WHEREAS, this Amendment shall
constitute a Loan Document and these Recitals shall be construed as part of this
Amendment.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which hereby are acknowledged, the parties hereto hereby agree as follows:
 
1.   Definitions.
 
(a) Undefined Terms. Unless the context otherwise provides or requires,
capitalized terms used herein which are not defined herein shall have the
meanings ascribed to them in the Loan Agreement; provided, however, that all
references in the Loan Agreement to (a) “Obligations” shall, in addition to the
definition set forth in the Loan Agreement include, but not be limited to, the
duties and obligations of the Borrowers under this Amendment, and (b) “Loan
Documents” shall, in addition to the definition set forth in the Loan Agreement
include, but not be limited to, this Amendment and the documents and instruments
to be delivered pursuant to this Amendment.
 
 
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(b) Additional Defined Terms. When used herein and in the Loan Agreement, the
following additional tern’s are added to Section 1 (Definitions) of the Loan
Agreement and shall have the following meanings:
 
“2013 Term Loan” shall mean the Term Loan in the amount of $5,000,000 made by
the Bank to Borrowers on or about the date hereof and secured by a mortgage or
deed of trust on the Waukesha Property.
 
“2013 Term Loan Note” shall mean the Promissory Note executed by the Borrowers
in connection with the 2013 Term Loan.
 
“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.
 
“Excluded Hedging Obligation” means, with respect to any Hedging Guarantor, any
Hedging Obligation if, and to the extent that, all or a portion of the guarantee
by such Hedging Guarantor of, or the grant by such Hedging Guarantor of a
security interest to secure, such Hedging Obligation (or any guarantee thereof)
is or becomes illegal under the Commodity Exchange Act or any rule, regulation
or order of the Commodity Futures Trading Commission (or the application or
official interpretation of any thereof) (a) by virtue of such Hedging
Guarantor’s failure for any reason to constitute an “eligible contract
participant” as defined in the Commodity Exchange Act and the regulations
thereunder at the time the Guarantee or the grant of such security interest
becomes or would become effective with respect to such Hedging Obligation or (b)
in the case of a Hedging Obligation subject to a clearing requirement pursuant
to Section 2(h) of the Commodity Exchange Act (or any successor provision
thereto), because such Hedging Guarantor is a “financial entity,” as defined in
Section 2(h)(7)(C)(i) the Commodity Exchange Act (or any successor provision
thereto), at the time the guarantee of such Hedging Guarantor becomes or would
become effective with respect to such related Hedging Obligation. If a Hedging
Obligation arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Hedging Obligation that is
attributable to swaps for which such guarantee or security interest is or
becomes illegal.
 
“Hedging Guarantor” means any Borrower or any other Obligor who guarantees the
Hedging Obligations of any other Borrower or Subsidiary to the Bank or any of
its Affiliates. For the avoidance of doubt, any Borrower or other Obligor that
is a direct obligor of the Hedging Obligations shall not be deemed a Hedging
Guarantor in respect of such Hedging Obligations to the extent such Borrower is
such a direct obligor of such Hedging Obligations.
 
“Waukesha Property” shall mean that property owned by LWI located at 2101
Delafield Street, Waukesha, Wisconsin 53188.
 
(c) Amended and Restated Defined Terms. When used herein and in the Loan
Agreement, the following terms shall have the following amended and restated
meanings:
 
 
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“Hedging Obligation” shall mean every obligation of any Borrower or other
Obligor whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Hedging
Agreements, (b) any and all cancellations, buy-backs, reversals, terminations or
assignments of any Fledging Agreements and (c) any agreement, contract or
transaction that constitutes a “swap” within the meaning of section l a(47) of
the Commodity Exchange Act; provided, however, that the definition of “Hedging
Obligation” shall not create any guarantee by any Hedging Guarantor of (or grant
of security interest by any Hedging Guarantor to support, as applicable) any
Excluded Hedging Obligations of such Hedging Guarantor for purposes of
determining any obligations of any Hedging Guarantor.
 
“Loans” shall mean, collectively, all Revolving Loans, the Term Loan and 2013
Term Loan made by the Bank to the Borrowers and all Letter of Credit
Obligations, under and pursuant to this Agreement.
 
“Note” and “Notes” shall mean, respectively, each of and collectively, the
Revolving Note in the Form of Exhibit A, the Term Note in the form of Exhibit B
and the 2013 Term Loan Note.
 
“Obligations” shall mean the Loans, the Notes, all interest accrued thereon
(including interest which would be payable as post-petition in connection with
any bankruptcy or similar proceeding, whether or not permitted as a claim
thereunder), any fees due the Bank hereunder, any expenses incurred by the Bank
hereunder, including without limitation, all liabilities and obligations under
this Agreement, under any other Loan Document, any reimbursement obligations of
any of the Borrowers in respect of Letters of Credit and surety bonds, all
Hedging Obligations of any of the Borrowers which are owed to the Bank or any
Affiliate of the Bank, and all Bank Product Obligations of any of the Borrowers,
and any and all other liabilities and obligations owed by any of the Borrowers
to the Bank from time to time, howsoever created, arising or evidenced, whether
direct or indirect, joint or several, absolute or contingent, now or hereafter
existing, or due or to become due, together with any and all renewals,
extensions, restatements or replacements of any of the foregoing.
Notwithstanding the foregoing, the definition of “Obligations” shall not create
any guarantee by any Hedging Guarantor of (or grant of security interest by any
Hedging Guarantor to support, as applicable) any Excluded Hedging Obligations of
such Hedging Guarantor for purposes of determining any obligations of any
Hedging Guarantor.
 
“Qualified ECP Guarantor” means, in respect of any Hedging Obligation, each
Borrower or other Obligor that has total assets exceeding $10,000,000 at the
time the relevant guarantee or grant of the relevant security interest becomes
or would become effective with respect to such Hedging Obligation or such other
Person as constitutes an “eligible contract participant” under the Commodity
Exchange Act or any regulations promulgated thereunder and can cause another
Person to qualify as an “eligible contract participant” at such time by entering
into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
 
 
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2.   Amendment to Loans, Notes and Schedules.
 
(a) The Borrowers covenant and agree (i) to apply the net proceeds of the 2013
Term Loan to reduce the outstanding principal balance of the Revolving Loans
(and Borrowers may retain any net proceeds remaining after so reducing the
principal balance of the Revolving Loan) and (ii) that each of the Loans is
cross-defaulted and cross-collateralized with each other Loan.
 
(b) Section 9.1(a) of the Loan Agreement is amended and restated as follows:
 
(a)     the Obligations under this Agreement, the other Loan Documents and the
2013 Term Loan;
 
(c) A new Section 13.9 is added to the Loan Agreement as follows:
 
13.9 Qualified ECP Guarantor Undertaking. Each Qualified ECP Guarantor hereby
jointly and severally absolutely, unconditionally and irrevocably undertakes to
provide such funds or other support as may be needed from time to time by each
other Obligor to honor all of its guarantee obligations under this Section 13 in
respect of Hedging Obligations (provided, however, that each Qualified ECP
Guarantor shall only be liable under this Section 13.9 for the maximum amount of
such liability that can be hereby incurred without rendering its obligations
under this Section 13.9 voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer, and not for any greater amount). The
obligations of each Qualified ECP Guarantor under this Section 13.9 shall remain
in full force and effect until the commitment of the Bank to make the Loans has
been irrevocably terminated, the Obligations have been repaid in full and each
Borrower’s obligations under this Agreement have been discharged. Each Qualified
ECP Guarantor intends that this Section 13.9 shall be deemed to constitute a
“keepwell, support, or other agreement” for the benefit of each other Credit
Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange
Act.
 
(d) Schedules 6.1 (Excluded Collateral), 7.1 (Borrower Organization
Identification Numbers), 7.6 (Capital Securities), 7.9 (Litigation and
Contingent Liabilities), 7.12 (Environmental Matters), 7.22 (Deposit Accounts),
7.23 (Location of All. Collateral), 7.27 (Real Property), 8.23 (Excluded Bank
Accounts), 9.1 (Debt), 9.2 (Permitted Liens), and 9.3 (Investments) to the Loan
Agreement are hereby deleted in their entirety and replaced with Schedules 6.1,
7.1, 7.6, 7.9, 7.12, 7.22, 7.23, 7.27, 8.23, 9.1, 9.2 and 9.3 attached hereto.
 
 
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3.   Representations and Warranties of Borrowers.
 
(a) The Recitals in this Amendment are true and correct in all respects. All
representations and warranties of each Borrower in the Loan Agreement and in the
other Loan Documents to which each Borrower is a party are incorporated herein
in full by this reference and are true and correct in all material respects as
of the date hereof, except to the extent that any such representation or
warranty expressly relates to an earlier date.
 
(b) After, giving effect to this Amendment, no Event of Default or Unmatured
Event of Default has occurred and is continuing.
 
(c) Each Borrower has the power, and has been duly authorized by all requisite
action, to execute and deliver this Amendment. This Amendment has been duly
executed by each Borrower.
 
(d) This Amendment is the legal, valid and binding obligation of each Borrower,
enforceable against each Borrower and each of the other Borrowers in accordance
with their respective terms, except as such enforceability may be limited by any
applicable bankruptcy, insolvency, reorganization, moratorium, or similar law
affecting creditors’ rights generally.
 
(e) The execution, delivery and performance of this Amendment do not and will
not (i) violate any law, rule, regulation or court order to which any of the
Borrowers is subject; (ii) conflict with or result in a breach of the
certificate of formation or incorporation, bylaws, limited liability company
agreement or other organizational documents of any of the Borrowers or any other
agreement or instrument to which it is party or by which the properties of any
of the Borrowers is bound; or (iii) result in the creation or imposition of any
Lien on any property of any of the Borrowers, whether now owned or hereafter
acquired, other than Liens in favor of the Bank.
 
(f) No consent or authorization of, filing with or other act by or in respect of
any Person is required in connection with the execution, delivery or performance
by each of the Borrowers, or the validity or enforceability, of this Amendment,
or the consummation of the transactions contemplated hereby.
 
4.   Conditions Precedent to Effectiveness. This Amendment shall be effective on
the date when each of the following conditions shall have been satisfied in the
sole discretion of the Bank:
 
(a) Amendment. Each of the Borrowers and the Bank shall have delivered to the
Bank executed counterparts of this Amendment.
 
(b) 2013 Term Loan. The Bank has funded the 2013 Term Loan and the Borrowers
have executed and delivered all documents required by the Bank in connection
therewith.
 
(c) Secretary and Manager Certificates. With respect to each Borrower, (i) good
standing certificates in its state of incorporation (or formation) and in each
other state requested by the Bank; and (ii) certification that the certificates
delivered by such Borrower on or about April 20, 2011, remain in full force and
effect (it being understood that the Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any changes
therein), all certified by its secretary or an assistant secretary or manager
(or similar officer) as being in full force and effect without modification; and
 
 
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(d) Other Documents. The Borrowers shall have delivered to the Bank such other
agreements, certificates, instruments and other documents as the Bank may
reasonably request to accomplish the purposes of this Amendment.
 
5.   Reference to and Effect on Loan Documents.
 
(a) Ratification. Except as specifically provided in this Amendment, the Loan
Agreement and the other Loan Documents shall remain in full force and effect and
each Borrower hereby ratifies and confirms each such Loan Document. Without
limiting the generality of the foregoing, the Borrowers are and remain jointly
and severally liable for the Obligations under the Loan Agreement and Notes as
if the Borrowers were signatories thereto.
 
(b) No Waiver. The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver or forbearance of any right, power or remedy of the Bank
under the Loan Agreement or any of the other Loan Documents, or, except as
expressly provided in herein, constitute a consent, waiver or modification with
respect to any provision of the Loan Agreement or any of the other Loan
Documents. Upon the effectiveness of this Amendment each reference in (a) the
Loan Agreement to “this Agreement,” “hereunder,” “hereof,” or words of similar
import and (b) any other Loan Document to “the Agreement” shall, in each case
and except as otherwise specifically stated therein, mean and be a reference to
the Loan Agreement as amended and modified hereby.
 
6.   Entire Agreement. This Amendment, including all annexes, exhibits,
schedules and other documents incorporated by reference herein or delivered in
connection herewith, constitutes the entire agreement of the parties with
respect to the subject matter hereof and supersedes all other understandings,
oral or written, with respect to the subject matter hereof.
 
7.   Fees and Expenses. As provided in the Loan Agreement, the Borrowers agree
to pay on demand all fees, costs and expenses incurred by the Bank in connection
with the preparation, execution and delivery of this Amendment.
 
8.   Severability. Wherever possible, each provision of this Amendment shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Amendment shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Amendment.
 
9.   Conflict of Terms. Except as otherwise provided in this Amendment, if any
provision contained in this Amendment is in conflict with, or inconsistent with,
any provision in any of the other Loan Documents, the provision contained in
this Amendment shall govern and control.
 
 
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10.    Successors and Assigns. This Amendment shall inure to the benefit of and
be binding upon the successors and permitted assigns of the Bank and shall be
binding upon the successors and assigns of each Borrower.
 
11.    Counterparts. This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall be one and the same instrument. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart. Delivery of
an executed signature page of this Amendment by facsimile transmission or
electronic transmission (such as fax or e-mail) shall be as effective as
delivery of a manually executed counterpart thereof.
 
12.    Headings. The paragraph headings used in this Amendment are for
convenience only and shall not affect the interpretation of any of the
provisions hereof.
 
13.       Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS SET FORTH IN THE CREDIT AGREEMENT, OR, IF
NO JURISDICTION IS SET FORTH THEREIN, BY THE INTERNAL LAWS (AS OPPOSED TO
CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS.
 
14.         Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AMENDMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN
DISTRICT OF ILLINOIS; PROVIDED THAT NOTHING IN THIS AMENDMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE BANK FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN
ANY OTHER JURISDICTION. EACH OF THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. EACH OF THE BORROWERS FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. EACH OF
THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
 
15.   Waiver of Jury Trial. THE BANK AND EACH OF THE BORROWERS, AFTER CONSULTING
OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AMENDMENT,
ANY NOTE, ANY OTHER LOAN DOCUMENT, ANY OF THE OTHER OBLIGATIONS, THE COLLATERAL,
OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, OR ANY
COURSE OF CONDUCT OR COURSE OF DEALING IN WHICH THE BANK AND ANY OF THE
BORROWERS ARE ADVERSE PARTIES, AND EACH AGREE THAT ANY SUCH ACTION OR PROCEEDING
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE BANK ENTERING INTO THIS AMENDMENT.
 
 
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16. Release of Claims. In consideration of the execution and delivery of this
Amendment by the Bank, the sufficiency of which is acknowledged, and excepting
only the contractual obligations respecting future performance by the Bank
arising under the Loan Agreement and the Loan Documents, each of the Borrowers
hereby irrevocably releases and forever discharges the Bank and each of its
affiliates, subsidiaries, successors, assigns, directors, officers, employees,
agents, representatives and attorneys (each, a “Released Person”) of and from
all damages, losses, claims, demands, liabilities, obligations, actions and
causes of action whatsoever which such Borrowers may now have or claim to have
on and as of the date hereof against any Released Person, whether presently
known or unknown, liquidated or unliquidated, suspected or unsuspected,
contingent or non-contingent, and of every nature and extent whatsoever
(collectively, “Claims”). Each Borrower jointly and severally represents and
warrants to the Bank that it has not granted or purported to grant to any other
Person any interest whatsoever in any Claim, as security or otherwise. The
Borrowers shall jointly and severally indemnify, defend and hold harmless each
Released Person from and against any and all Claims and any loss, cost,
liability, damage or expense (including reasonable attorneys’ fees and expenses)
incurred by any Released Person in investigating, preparing for, defending
against, providing evidence or producing documents in connection with or taking
other action in respect of any commenced or threatened Claim.
 
EACH BORROWER AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR
MISUNDERSTOOD DEFENSES, CLAIMS, CONTRACTS, LIABILITIES, INDEBTEDNESS AND
OBLIGATIONS WHICH ARE RELEASED, WAIVED AND DISCHARGED BY THIS AMENDMENT. EACH
BORROWER HEREBY WAIVES AND RELINQUISHES ALL RIGHTS AND BENEFITS WHICH IT MIGHT
OTHERWISE HAVE UNDER ANY CIVIL CODE OR ANY SIMILAR LAW, TO THE EXTENT SUCH LAW
MAY BE APPLICABLE, WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR
MISUNDERSTOOD DEFENSES, CLAIMS, CONTRACTS, LIABILITIES, INDEBTEDNESS AND
OBLIGATIONS. TO THE EXTENT THAT SUCH LAWS MAY BE APPLICABLE, EACH BORROWER
WAIVES AND RELEASES ANY RIGHT OR DEFENSE WHICH IT MIGHT OTHERWISE HAVE UNDER ANY
OTHER LAW OR ANY APPLICABLE JURISDICTION WHICH MIGHT LIMIT OR RESTRICT THE
EFFECTIVENESS OR SCOPE OF ANY OF THEIR WAIVERS OR RELEASES HEREUNDER.
 
[Signature page(s) follow]
 

 
 
 
 
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the date first written above.
 
THE BANK:
 
THE PRIVATEBANK AND TRUST COMPANY
 
By:  /s/  Douglas W. Buchler                             
       Authorized Officer
THE BORROWERS:
 
LIFEWAY FOODS, INC.
 
By:  /s/ Julie Smolyansky                                  
Title:  President
 
FRESH MADE, INC.
 
By:  /s/ Edward Smolyansky                             
Title:  President
 
HELIOS NUTRITION LIMITED
 
By:  /s/ Edward Smolyansky                              
Title:  CFO and Secretary
 
PRIDE OF MAIN STREET DAIRY, LLC
 
By:  /s/ Edward Smolyansky                             
Title:  Manager
 
STARFRUIT, LLC
 
By:  /s/ Edward Smolyansky                             
Title:  Manager
 
LIFEWAY WISCONSIN, INC.
 
By:  /s/ Edward Smolyansky                             
Title:  President
 
 
 

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SCHEDULE 6.1

 
Excluded Collateral
 
Real property owned by Freshmade and located at 810-820 Bleigh Avenue,
Philadelphia, Pennsylvania.
 
The following Morgan Stanley accounts and amounts held therein:
 
Lifeway Foods, Inc.                                           Account No.
433-083275
 
The following Barclays accounts and the amounts held therein:
 
Lifeway Foods, Inc.                                           Account No.
832-94962
Lifeway Foods, Inc.                                           Account No.
832-94983
Lifeway Foods, Inc.                                           Account No.
832-94984
 
The following UBS accounts and amounts held therein:
 
Lifeway Foods, Inc.                                           Account No. NI163
5F3
Lifeway Foods, Inc.                                           Account No.
NI1636F3
Lifeway Foods, Inc.                                           Account No.
NI1637F3
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 7.1
 
Borrower Organization Identification Numbers
 
 
Borrower
Jurisdiction
Organization Identification Number
     
Lifeway Foods, Inc.
Illinois
5425-124-6
Fresh Made, Inc.
Pennsylvania
822425 9
Helios Nutrition Limited
Minnesota
P-79
Pride of Main Street Dairy, LLC
Minnesota
183 91-LLC
Starfruit, LLC
Illinois
02155133
Lifeway Wisconsin, Inc.
Illinois
69019633

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 7.6
 
Capital Securities
 
Borrower
# of Authorized Shares
# of Issued Shares
Lifeway Foods, Inc.
22,500,000
16,867,890*
Fresh Made, Inc.
10,000
10,000
Helios Nutrition Limited
15,000,000
809,888
Lifeway Wisconsin, Inc.
10,000
1,000

 
*Weighted average number of shares outstanding as of the 9 month period ending
September 30, 2008.
 
 
 
 
Borrower
# of Membership Interests
 
Pride of Main Street Dairy, LLC
3,433,400
 
Starfruit, LLC
100
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 7.9
 
Litigation and Contingent Liabilities
 
1.           Keatley, et al. v. Lifeway Foods, Inc., class action pending in the
U.S. District Court for the Northern District of Illinois, alleging false
marketing.
 
2.           Phelan v. Lifeway Foods, Inc., class action pending with the
Superior Court of the State of California, County of San Francisco, alleging
false and misleading advertising as to health benefits.
 
3.           AptarGroup, Inc. v. Lifeway Foods, Inc., pending in the U.S.
District Court for the Northern District of Illinois, alleging patent
infringement.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 7.12
 
Environmental Matters
 
1. Phase I Environmental Site Assessment of 6431 West Oakton Street, Morton
Grove, Illinois, prepared by The English Company, dated as of October 20, 2008,
and known as Project No. 2718-544.
 
2. Limited Subsurface Investigation of 6431 West Oakton Street, Morton Grove,
Illinois, prepared by The English Company, dated as of December 30, 2008, and
known as Project No. 2751-554.
 
3. Phase I Environmental Site Assessment of 6101 Gross Point Road, Niles,
Illinois,
 
prepared by Advanced Environmental Corporation, dated as of July 6, 2005, and
known as Project No. 05.21080092.
 
4. Phase I Environmental Site Assessment of 7625 North Austin Avenue, Skokie,
Illinois, prepared by The English Company, dated as of October 20, 2008, and
known as Project No. 2717-544.
 
5. Phase I Environmental Site Assessment and Limited Environmental Compliance
Review of 810-820 Bleigh Avenue, Philadelphia, Pennsylvania, prepared by Environ
International Corporation, dated as of November, 2008, and known as Project No.
02-21727A.
 
6. Geophysical Investigation Report of 810-820 Bleigh Avenue, Philadelphia,
Pennsylvania, prepared by Enviroprobe Service, Inc., dated as of December 12,
2008.
 
7. Letter from Environ International Corporation, dated as of January 6, 2009,
and addressed to Ted Esborn, Esq. of McDonald Hopkins, with respect to 810-820
Bleigh Avenue, Philadelphia, Pennsylvania.
 
8. Letter from Environ International Corporation, dated as of December 8, 2008,
and addressed to Ted Esborn, Esq. of McDonald Hopkins, with respect to 810-820
Bleigh Avenue, Philadelphia, Pennsylvania.
 
9. Letter from Environ International Corporation dated as of December 15, 2008,
and addressed to Ted Esborn, Esq. of McDonald Hopkins, with respect to 810-820
Bleigh Avenue, Philadelphia, Pennsylvania.
 
10. Phase I Environmental Site Assessment of 214 Main Street South, Sauk Centre,
Minnesota, prepared by Widseth Smith Nolting, dated as of April, 2000, and known
as WSN No. 260B676.
 
11. Phase I Environmental Site Assessment of 2101 Delafield Street, Waukesha,
Wisconsin, prepared by Vieau Associates Inc. dated as of March 26, 2013.
 
12. Limited Subsurface Investigation Report of 2101 Delafield Street, Waukesha,
Wisconsin, dated July 16, 2013, prepared by EBI Consulting.
 
 
 

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SCHEDULE 7.22
 

 
Deposit Accounts
 
Lifeway Foods, Inc.
The PrivateBank, 70 West Madison, Chicago, IL
2275025
Business Checking
Fresh Made, Inc.
The PrivateBank, 70 West Madison, Chicago, IL
2197617
Business Checking
Pride of Main Street Dairy
The PrivateBank, 70 West Madison, Chicago, IL
2271136
Business Checking
 
Minnesota National Bank, 235 Main St, Sauk Centre MN 56378
2186585
Business Checking
Helios Nutrition
None
   
Starfruit LLC
Chase, Chicago IL
827403254
863559795
863559829
863559787
863559449
964691307
Business Checking (Master)
Business Checking (Block 37)
Business Checking (Division)
Business Checking (Halsted)
Business Checking (Merchandise Mart)
Business Checking (Truck)
Lifeway Wisconsin, Inc.
The PrivateBank, 70 West Madison, Chicago, IL
2346517
 

 
 
 
 
 
 
 
 
 
 

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SCHEDULE 7.23
 
Location of All Collateral
 
Lifeway Foods, Inc.
6431 W. Oakton St, Morton Grove, IL 60053 Cook
6101 W. Gross Point Rd, Niles, IL
7625 N. Austin Ave, Skokie, IL 60077 Cook
214 Main Street S, Sauk Centre, MN 56378
Fresh Made, Inc.
810 Bleigh St, Philadelphia, PA 19111
Pride of Main Street Dairy
214 Main Street S, Sauk Centre, MN 56378
Helios Nutrition
214 Main Street S, Sauk Centre, MN 56378
Starfruit LLC
1745 W. Division St, Chicago, IL 60612
2142 N. Halsted, Chicago, IL 60614
108 N. State, Chicago, IL 60602
222 Merchandise Mart Plaza, Chicago, IL 60654
Lifeway Wisconsin, Inc.
2101 Delafield Street, Waukesha, WI 53188

 
 
 
 
 
 
 
 
 

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SCHEDULE 7.27
 
Real Property
 
Lifeway Foods, Inc.
6431 W. Oakton St, Morton Grove, IL 60053 Cook
6101 W. Gross Point Rd, Niles, IL
7625 N. Austin Ave, Skokie, IL
Owned
Lifeway Foods Inc.
Fresh Made, Inc.
810 Bleigh St.
Philadelphia, PA 19111
Owned
Freshmade Inc.
Pride of Main Street Dairy
214 Main Street S, Sauk Centre, MN 56378
Owned
Pride of Main Street Dairy
Helios Nutrition
None
   
Starfruit LLC
1745 W. Division St. Chicago, IL 60612
Leased
John Leydon - Ruby Room
Starfruit LLC
2142 North Halsted, Chicago, IL 60614
Leased
Michael Williamson
Starfruit LLC
108 N. State
Chicago, IL 60602
Leased
CB Richard Ellis
Starfruit LLC
222 Merchandise Mart Plaza
Chicago, IL 60654
Leased
Merchandise Mart.
Lifeway Wisconsin, Inc.
2101 Delafield Street Waukesha, WI 53188
Owned
Lifeway Wisconsin, Inc.

 
 
 
 
 

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SCHEDULE 8.23
 
Excluded Bank Accounts
 
 
Pride of Main Street Dairy
Minnesota National Bank, 235 Main St, Sauk Centre, MN 56378
2186585
Business Checking
Starfruit LLC
Chase, Chicago IL
 
Business Checking
   
827403254
(Master)
           
863559795
Business Checking
     
(Block 37)
   
863559829
Business Checking
     
(Division)
   
863559787
Business Checking
     
(Halsted)
   
863559449
Business Checking
     
(Merchandise Mart)
   
964691307
Business Checking (Truck)

 
 
 
 
 
 
 

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SCHEDULE 9.1
 
Debt
 
None other than the Amani-Helios Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 9.2
 
Permitted Liens
 
None.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE 9.3
 
Investments
 
All the Morgan Stanley, Barclays and UBS accounts identified on Schedule 6.1.