Document:

Exhibit 10.1

 

THIRTEENTH MODIFICATION TO

LOAN AND SECURITY AGREEMENT

 

This Thirteenth
Modification to Loan and Security Agreement (this “Amendment”) is entered into as of July 6, 2017 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”),
THE LIFEWAY KEFIR SHOP LLC, an Illinois limited liability company formerly known as STARFRUIT, LLC (“LKS”),
and LIFEWAY WISCONSIN, INC., an Illinois corporation (“LWI” and together with Lifeway, FMI, Helios, and LKS
being sometimes collectively referred to as the “Borrowers”).

 

RECITALS

 

WHEREAS, the Bank and the
Borrowers (other than LWI which subsequently became a Borrower) 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 and by that certain Sixth Modification
to Loan and Security Agreement dated as of June 13, 2012, by that certain Seventh Modification to Loan and Security Agreement dated
as of May 14, 2013, by that certain Eighth Modification to Loan and Security Agreement dated as of September 4, 2013, by that certain
Ninth Modification to Loan and Security Agreement dated as of June 24, 2014, by that certain Tenth Modification to Loan and Security
Agreement dated as of August 28, 2014, by that certain Eleventh Modification to Loan and Security Agreement dated as of August
11, 2015 and by that certain Twelfth Modification to Loan and Security Agreement entered into as of September 12, 2016 with an
effective date of July 31, 2016 (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 amend the Loan Agreement to permit Lifeway to redeem a portion of its issued and outstanding
Capital Securities, 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	 

     

    

 

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.

 

(b)       Additional
Defined Term. A definition of “Permitted 2017 Redemption Transaction” is hereby added to Section 1.1
of the Loan Agreement as follows:

 

“Permitted 2017 Redemption
Transaction” shall mean the redemption by Lifeway of issued and outstanding Capital Securities of Lifeway provided that
(a) the aggregate dollar amount of Capital Securities so redeemed shall not exceed $6,500,000 and (b) such redemption transaction
shall have been consummated no later than July 31, 2017.

 

 

 

    	 	2	 

     

    

 

2       Amendments.

 

(a)       Section
9.6 of the Loan Agreement is amended and restated as follows:

 

9.6.       Distributions.
The Borrowers shall not and shall not permit any Subsidiary to, (a) make any distribution or dividend (other than stock dividends),
whether in cash or otherwise, to any of its equity holders, (b) other than the Permitted 2017 Redemption Transaction, purchase
or redeem any of its equity interests or any warrants, options or other rights in respect thereof, (c) pay any management fees
or similar fees to any of its equity holders or any Affiliate thereof, (d) pay or prepay interest on, principal of, premium, if
any, redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund or any other payment in respect of any Subordinated
Debt, or (e) set aside funds for any of the foregoing. Notwithstanding the foregoing, (i) any Subsidiary may pay dividends or make
other distributions to the Borrowers or to a domestic Wholly-Owned Subsidiary; and (ii) so long as no Event of Default or Unmatured
Event of Default exists or would result therefrom (including, but not limited to, any Event of Default or Unmatured Event of Default
under Section 10 hereof), the Borrowers may make regularly scheduled payments of interest in respect of Subordinated Debt
to the extent permitted under the subordination provisions thereof, (iii) the applicable Borrowers may make payments to the extent
permitted under the Subordination Agreement(s); and (iv) so long as no Event of Default or Unmatured Event of Default exists or
would result therefrom (including, but not limited to, any Event of Default or Unmatured Event of Default under Section 10
hereof), Lifeway may declare and pay cash distributions or dividends on its outstanding capital stock and purchase or redeem any
of its equity interests or any warrants, options or other rights in respect thereof.

 

(b)       Commencing
the fiscal quarter ending June 30, 2017, Section 10.2 of the Loan Agreement is amended and restated as follows:

 

10.2       Fixed
Charge Coverage. As of the end of each of its fiscal quarters, the Borrowers and their Subsidiaries shall maintain a ratio
of (a) the total for the four fiscal quarters then ending of consolidated EBITDA minus, in respect of such four fiscal quarters,
the sum of (i) all income taxes paid in cash by the Borrowers and their Subsidiaries, (ii) all Capital Expenditures which are not
financed with Funded Debt (excluding (x) up to $2,400,000 of Capital Expenditures made during the fiscal quarter ended September
30, 2013 which were not financed with Funded Debt and were made in connection with the GGD Acquisition, (y) up to $1,750,000 of
Capital Expenditures made to GGD’s facility in Waukesha, Wisconsin during the two fiscal quarters ended June 30, 2014 which
were not financed with Funded Debt and (z) up to $1,000,000 of Capital Expenditures made to GGD’s facility in Waukesha, Wisconsin
during the two fiscal quarters ended December 31, 2014 which were not financed with Funded Debt), (iii) cash distributions or dividends
and (iv) amounts paid to repurchase or redeem stock or equity (excluding amounts paid to repurchase or redeem stock or equity in
connection with the Permitted 2017 Redemption Transaction), to (b) the sum for such four fiscal quarters of (i) Interest Charges
plus (ii) required payments of principal of Funded Debt (including the Term Loan and 2013 Term Loan, but excluding the (x)
Revolving Loans, (y) Seller Note and (z) Amani-Helios Note), of not less than 1.10 to 1.

 

3.       Representations
and Warranties of Borrowers.

 

(a)       The
Recitals in this Amendment are true and correct in all respects.

 

(b)       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.

 

(c)       No
Event of Default or Unmatured Event of Default has occurred and is continuing.

 

(d)       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.

 

(e)       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.

 

 

 

    	 	3	 

     

    

 

(f)       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.

 

(g)       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; and

 

(b)       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.

 

(b)       No
Waiver. Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate
as a waiver or forbearance of any right, power or remedy of either party 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 reasonable 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.

 

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.

 

 

 

    	 	4	 

     

    

 

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. THE PARTIES HEREBY EXPRESSLY AND
IRREVOCABLY SUBMIT 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 PARTIES FURTHER CONSENTS TO THE SERVICE
OF PROCESS IN THE MANNER SET FORTH IN THE LOAN AGREEMENT. EACH OF THE PARTIES 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.

 

16.       Release
of Claims. In consideration for entering into this agreement, 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.

 

 

 

    	 	5	 

     

    

 

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 follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	6	 

     

    

 

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/Christopher Trimbach
	 	          Authorized Officer

 

 

 

THE BORROWERS:

 

Lifeway
Foods, Inc.

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

Fresh
Made, Inc. 

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

Helios
Nutrition Limited

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

THE
LIFEWAY KEFIR SHOP LLC

 

By:     /s/Edward Smolyansky

Title:  Manager

 

LIFEWAY
WISCONSIN, INC.

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

 

 

 

    	 	7Exhibit 10.2

 

FOURTHEENTH MODIFICATION TO

LOAN AND SECURITY AGREEMENT

 

 

This Fourteenth
Modification to Loan and Security Agreement (this “Amendment”) is entered into as of July 20, 2017 (the “Effective
Date”) 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”), THE LIFEWAY KEFIR SHOP LLC, an Illinois limited liability company
formerly known as STARFRUIT, LLC (“LKS”), and LIFEWAY WISCONSIN, INC., an Illinois corporation (“LWI”
and together with Lifeway, FMI, Helios and LKS being sometimes collectively referred to as the “Borrowers”).

 

RECITALS

 

WHEREAS, the Bank, Pride
of Main Street Dairy, LLC, a Minnesota limited liability company (“Pride”), and the Borrowers (other than LWI
which subsequently became a Borrower) 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 and by that certain Sixth Modification to Loan and
Security Agreement dated as of June 13, 2012, by that certain Seventh Modification to Loan and Security Agreement dated as of May
14, 2013, by that certain Eighth Modification to Loan and Security Agreement dated as of September 4, 2013, by that certain Ninth
Modification to Loan and Security Agreement dated as of June 24, 2014, by that certain Tenth Modification to Loan and Security
Agreement dated as of August 28, 2014, by that certain Eleventh Modification to Loan and Security Agreement dated as of August
11, 2015, by that certain Twelfth Modification to Loan and Security Agreement entered into as of September 12, 2016 with an effective
date of July 31, 2016 and by that certain Thirteen Modification to Loan and Security Agreement dated as of June 30, 2017 (as modified,
the “Loan Agreement”), pursuant to which the Bank made available to the Borrowers a credit facility.

 

WHEREAS, an Event of Default
(the “Subject Default”) has occurred under Section 8.2 and Section 11.3 of the Loan Agreement
as a result of Borrowers causing Pride to be liquidated and dissolved;

 

WHEREAS,
the Bank and Borrowers desire to amend the Loan Agreement, among other things, to (a) extend the Revolving Loan Maturity Date and
(b) waive the Subject Default, 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.

 

(b)       Amended
and Restated Defined Term. When used herein and in the Loan Agreement, the following term shall have the following amended
and restated meaning:

 

“Revolving Loan Maturity Date”
shall mean July 31, 2018, unless extended by the Bank pursuant to any modification, extension or renewal note executed by the Borrowers
and accepted by the Bank in its sole and absolute discretion in substitution for the Revolving Note.”

 

 

 

    	 	1	 

     

    

 

2       Amendments.

 

(a)       The
Revolving Loan is hereby extended to the Revolving Loan Maturity Date. The Revolving Note is hereby amended by deleting all references
to February 6, 2010 (subsequently amended to July 31, 2017) and replacing such references with July 31, 2018.

 

(b)       Except
as specifically set forth herein, the Revolving Note (as hereby amended by this Fourteenth Modification), the Term Note, 2013 Term
Loan Note and the Loan Documents previously delivered by the Borrowers shall remain in full force and effect and are hereby ratified
and confirmed in all respects. The indebtedness evidenced by the Revolving Note (as hereby amended by this Twelfth Modification),
Term Note and 2013 Term Loan Note is continuing indebtedness of the Borrowers and nothing herein shall be deemed to constitute
a payment, settlement or novation of the Revolving Note, Term Note or 2013 Term Loan Note, or to release or otherwise adversely
affect any lien or security interest securing such indebtedness or any rights of the Bank against any party primarily or secondarily
liable for such indebtedness.

 

3.       Representations
and Warranties of Borrowers.

 

(a)       The
Recitals in this Amendment are true and correct in all respects.

 

(b)       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.

 

(c)       Other
than the Subject Default, no Event of Default or Unmatured Event of Default has occurred and is continuing.

 

(d)       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.

 

(e)       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.

 

(f)       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.

 

(g)       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)       Evidence
of Dissolution of Pride. Borrowers shall have delivered to the Bank evidence of the dissolution and liquidation of Pride in
form and substance acceptable to the Bank.

 

(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 (June 26, 2013 in the case of LWI and August 19, 2016, in the case of LKS), 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

 

 

 

    	 	2	 

     

    

 

(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.       Waiver
of Subject Default and Consent.

 

From and after the Effective
Date, the Bank hereby waives (a) the occurrence of the Subject Default, (b) its right to pursue its remedies on account of the
Subject Default, and (c) its right to charge interest at the Default Rate on account of the Subject Default. Such waiver (a) shall
not be deemed to extend to any other Event of Default which has arisen or may hereafter arise, (b) shall not be deemed to effect
any amendment of the Loan Agreement or any of the other Loan Documents, all of which shall remain in full force and effect in accordance
with their respective terms except as expressly amended hereby and (c) shall not be deemed to establish a custom or course of dealing
between Borrower and the Bank. As a condition to the Bank’s waiver set forth in this Section 5, Borrowers covenant and agree
to deliver to the Bank, within ten (10) Business Days from the Effective Date, evidence of the liquidation and dissolution of Pride.
For the avoidance of doubt, Pride shall no longer be a Borrower under the Loan Agreement or any of the other Loan Documents.

 

6.       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.

 

(b)       No
Waiver. Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate
as a waiver or forbearance of any right, power or remedy of either party 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.

 

7.       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.

 

8.       Fees
and Expenses. As provided in the Loan Agreement, the Borrowers agree to pay on demand all reasonable fees, costs and expenses
incurred by the Bank in connection with the preparation, execution and delivery of this Amendment.

 

9.       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.

 

10.      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.

 

11.      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.

 

12.      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.

 

13.      Headings.
The paragraph headings used in this Amendment are for convenience only and shall not affect the interpretation of any of the provisions
hereof.

 

 

 

    	 	3	 

     

    

 

14.      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.

 

15.      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. THE PARTIES HEREBY EXPRESSLY AND
IRREVOCABLY SUBMIT 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 PARTIES FURTHER CONSENTS TO THE SERVICE
OF PROCESS IN THE MANNER SET FORTH IN THE LOAN AGREEMENT. EACH OF THE PARTIES 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.

 

16.      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.

 

17.      Release
of Claims. In consideration for entering into this agreement, 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 follows]

 

 

 

    	 	4	 

     

    

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/Christopher Trimbach
	 	          Authorized Officer

 

 

 

THE BORROWERS:

 

Lifeway
Foods, Inc.

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

Fresh
Made, Inc. 

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

Helios
Nutrition Limited

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

THE
LIFEWAY KEFIR SHOP LLC

 

By:     /s/Edward Smolyansky

Title:  Manager

 

LIFEWAY
WISCONSIN, INC.

 

By:     /s/Edward Smolyansky

Title:  Chief Operating Officer

 

 

 

    	 	5

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