Document:

ex10-2_17567.htm

EXHIBIT 10.2

 

	  	
ASSIGNMENT OF RENTS AND LEASES

	  
	  	  	  
	
Document Number

	
Title of Document

	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	  	
  Recording Area

	  	  	  
	  	  	  
	  	  	
  This document was prepared by, and after recording, return to:

	  	  	
  James M. Teper, Esq.

	  	  	
  Patzik, Frank & Samotny Ltd.

	  	  	
  150 South Wacker Drive

	  	  	
  Suite 1500

	  	  	
  Chicago, Illinois 60606

	  	  	  
	  	  	  
	  	  	
See Exhibit A

	  	  	
Parcel Identification Number (PIN)

	  	  	  
	  	  	  
	  	  	  
	LIFEWAY WISCONSIN, INC.
	  	  	  
	  	  	
(Assignor)

	  	  	  
	to
	  	  	  
	  	  	  
	THE PRIVATEBANK AND TRUST COMPANY
	  	  	  
	  	  	
(Assignee)

	  	  	  
	  	
Dated:

	
As of September 4, 2013

	  	
Address:

	
2101 Delafield Street, Waukesha, Wisconsin 53188

	  	
County:

	
Waukesha

	  	  	  
	  	  	  
	  	  	  

  

  

 

  

ASSIGNMENT OF RENTS AND LEASES

 

This ASSIGNMENT OF RENTS AND LEASES dated as of the 4th day of September, 2013 (the “Assignment”), is executed by LIFEWAY WISCONSIN, INC., an Illinois corporation (the “Assignor”), whose address is 6431 West Oakton Street, Morton Grove, Illinois 60053, to and for the benefit of THE PRIVATEBANK AND TRUST COMPANY, its successors and assigns (the “Assignee”), whose address is 120 South LaSalle Street, Chicago, Illinois 60603.

 

R E C I T A L S:

 

A.           The Assignee has agreed to loan to the Assignor, Fresh Made, Inc., a Pennsylvania corporation, Lifeway Foods, Inc., an Illinois corporation, Helios Nutrition Limited, a Minnesota corporation, Pride of Main Street Dairy, LLC, a Minnesota limited liability company, and Starfruit, LLC, an Illinois limited liability company (collectively, the “Borrowers”), in the maximum principal amount of Seventeen Million Six Hundred Thousand and No/100 Dollars ($17,600,000.00) (the “Loan”), as evidenced by (i) that certain Promissory Note in the original principal amount of $5,000,000.00, dated of even date herewith (as the same may be amended, modified, replaced or restated from time to time, “Note 1”), executed by the Borrowers and made payable to the order of the Assignee, (ii) that certain Term Note in the original principal amount of $7,600,000.00, dated as of February 6, 2009 (as the same may be amended, modified, replaced or restated from time to time, “Note 2”), executed by the Borrowers and made payable to the order of the Assignee, and (iii) that certain Revolving Note in the original principal amount of $5,000,000.00, dated as of February 6, 2009 (as the same may be amended, modified, replaced or restated from time to time, “Note 3”) executed by the Borrowers and payable to the order of the Assignee.  Note 1, Note 2 and Note 3 are hereinafter collectively referred to as the “Note”.

 

B.           A condition precedent to the Assignee’s making a new loan to the Borrowers, as evidenced by Note 1, is the execution and delivery by the Assignor of this Assignment.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto mutually agree as follows:

 

A G R E E M E N T S:

 

1. Definitions.  All capitalized terms which are not defined herein shall have the meanings ascribed thereto in that certain Mortgage, Security Agreement, Assignment of Rents and Leases And Fixture Filing dated as of even date herewith, executed by the Assignor to and for the benefit of the Assignee (the “Mortgage”).

 

2. Grant of Security Interest.  The Assignor hereby grants, transfers, sets over and assigns to the Assignee, all of the right, title and interest of the Assignor in and to (i) all of the rents, revenues, issues, profits, proceeds, receipts, income, accounts and other receivables arising out of or from the land legally described in Exhibit “A” attached hereto and made a part hereof and all buildings and other improvements located thereon (said land and improvements being hereinafter referred to collectively as the “Premises”), including, without limitation, lease termination fees, purchase option fees and other fees and expenses payable under any lease; (ii) all leases and subleases (each, a “Lease”, and collectively, the “Leases”), now or hereafter 

 

  

  

  

existing, of all or any part of the Premises together with all guaranties of any of such Leases and all security deposits delivered by tenants thereunder, whether in cash or letter of credit; (iii) all rights and claims for damage against tenants arising out of defaults under the Leases, including rights to termination fees and compensation with respect to rejected Leases pursuant to Section 365(a) of the Federal Bankruptcy Code or any replacement Section thereof; and (iv) all tenant improvements and fixtures located on the Premises.  This Assignment is an absolute transfer and assignment of the foregoing interests to the Assignee given to secure:

 

(a) the payment by the Borrowers when due of (i) the indebtedness evidenced by the Note and any and all renewals, extensions, replacements, amendments, modifications and refinancings thereof; (ii) any and all other indebtedness and obligations that may be due and owing to the Assignee by the Borrowers under or with respect to the Loan Documents (as defined in the Note); and (iii) all costs and expenses paid or incurred by the Assignee in enforcing its rights hereunder, including without limitation, court costs and reasonable attorneys’ fees; and

 

(b) the observance and performance by the Borrowers of the covenants, conditions, agreements, representations, warranties and other liabilities and obligations of the Borrowers or any other obligor to or benefiting the Assignee which are evidenced or secured by or otherwise provided in the Note, this Assignment or any of the other Loan Documents, together with all amendments and modifications thereof.

 

3. Representations and Warranties of the Assignor.  The Assignor represents and warrants to the Assignee that:

 

(a) this Assignment, as executed by the Assignor, constitutes the legal and binding obligation of the Assignor enforceable in accordance with its terms and provisions;

 

(b) the Assignor is the lessor under all Leases;

 

(c) there is no other existing assignment of the Assignor’s entire or any part of its interest in or to any of the Leases, or any of the rents, issues, income or profits assigned hereunder, nor has the Assignor entered into any agreement to subordinate any of the Leases or the Assignor’s right to receive any of the rents, issues, income or profits assigned hereunder;

 

(d) the Assignor has not executed any instrument or performed any act which may prevent the Assignee from operating under any of the terms and provisions hereof or which would limit the Assignee in such operation; and

 

(e) there are no defaults by the landlord and, to the Assignee’s knowledge, there are no material defaults by tenants under any Leases.

 

4. Covenants of the Assignor.  The Assignor covenants and agrees that so long as this Assignment shall be in effect:

 

  

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(a) the Assignor shall not lease any portion of the Premises unless the Assignor obtains the Assignee’s prior written consent to all aspects of such lease;

 

(b) the Assignor shall observe and perform all of the covenants, terms, conditions and agreements contained in the Leases to be observed or performed by the lessor thereunder, and the Assignor shall not do or suffer to be done anything to impair the security thereof.  The Assignor shall not (i) release the liability of any tenant under any Lease, (ii) consent to any tenant’s withholding of rent or making monetary advances and off-setting the same against future rentals, (iii) consent to any tenant’s claim of a total or partial eviction, (iv) consent to a tenant termination or cancellation of any Lease, except as specifically provided therein, or (v) enter into any oral leases with respect to all or any portion of the Premises;

 

(c) the Assignor shall not collect any of the rents, issues, income or profits assigned hereunder more than thirty (30) days in advance of the time when the same shall become due, except for security or similar deposits;

 

(d) the Assignor shall not make any other assignment of its entire or any part of its interest in or to any or all Leases, or any or all rents, issues, income or profits assigned hereunder, except as specifically permitted by the Loan Documents;

 

(e) the Assignor shall not modify the terms and provisions of any Lease, nor shall the Assignor give any consent (including, but not limited to, any consent to any assignment of, or subletting under, any Lease, except as expressly permitted thereby) or approval, required or permitted by such terms and provisions or cancel or terminate any Lease, without the Assignee’s prior written consent; provided, however, that the Assignor may cancel or terminate any Lease as a result of a material default by the tenant thereunder and failure of such tenant to cure the default within the applicable time periods set forth in the Lease;

 

(f) the Assignor shall not accept a surrender of any Lease or convey or transfer, or suffer or permit a conveyance or transfer, of the premises demised under any Lease or of any interest in any Lease so as to effect, directly or indirectly, proximately or remotely, a merger of the estates and rights of, or a termination or diminution of the obligations of, any tenant thereunder; any termination fees payable under a Lease for the early termination or surrender thereof shall be paid jointly to the Assignor and the Assignee;

 

(g) the Assignor shall not alter, modify or change the terms of any guaranty of any Lease, or cancel or terminate any such guaranty or do or permit to be done anything which would terminate any such guaranty as a matter of law;

 

(h) the Assignor shall not waive or excuse the obligation to pay rent under any Lease;

 

(i) the Assignor shall, at its sole cost and expense, appear in and defend any and all actions and proceedings arising under, relating to or in any manner connected with any Lease or the obligations, duties or liabilities of the lessor or any tenant or guarantor thereunder, and shall pay all costs and expenses of the Assignee, including court costs and reasonable attorneys’ fees, in any such action or proceeding in which the Assignee may appear;

 

  

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(j) the Assignor shall give prompt notice to the Assignee of any notice of any default by the lessor under any Lease received from any tenant or guarantor thereunder;

 

(k) the Assignor shall enforce the observance and performance of each covenant, term, condition and agreement contained in each Lease to be observed and performed by the tenants and guarantors thereunder and shall immediately notify the Assignee of any material breach by the tenant or guarantor under any such Lease;

 

(l) the Assignor shall not permit any of the Leases to become subordinate to any lien or liens other than liens securing the indebtedness secured hereby or liens for general real estate taxes not delinquent;

 

(m) the Assignor shall not execute hereafter any Lease unless there shall be included therein a provision providing that the tenant thereunder acknowledges that such Lease has been assigned pursuant to this Assignment and agrees not to look to the Assignee as mortgagee, mortgagee in possession or successor in title to the Premises for accountability for any security deposit required by lessor under such Lease unless such sums have actually been received in cash by the Assignee as security for tenant’s performance under such Lease; and

 

(n) If any tenant under any Lease is or becomes the subject of any proceeding under the Federal Bankruptcy Code, as amended from time to time, or any other federal, state or local statute which provides for the possible termination or rejection of the Leases assigned hereby, the Assignor covenants and agrees that if any such Lease is so terminated or rejected, no settlement for damages shall be made without the prior written consent of the Assignee, and any check in payment of damages for termination or rejection of any such Lease will be made payable both to the Assignor and the Assignee.  The Assignor hereby assigns any such payment to the Assignee and further covenants and agrees that upon the request of the Assignee, it will duly endorse to the order of the Assignee any such check, the proceeds of which shall be applied in accordance with the provisions of Section 8 below.

 

5. Rights Prior to Default.  Unless or until an Event of Default (as defined in Section 6) shall occur, the Assignor shall have the right to collect, at the time (but in no event more than thirty (30) days in advance) provided for the payment thereof, all rents, issues, income and profits assigned hereunder, and to retain, use and enjoy the same.  Upon the occurrence of an Event of Default, the Assignor’s right to collect such rents, issues, income and profits shall immediately terminate without further notice thereof to the Assignor.  The Assignee shall have the right to notify the tenants under the Leases of the existence of this Assignment at any time.

 

6. Events of Default.  An “Event of Default” shall occur under this Assignment upon the occurrence of (a) a breach by the Assignor of any of the covenants, agreements, representations, warranties or other provisions hereof which is not cured or waived within the applicable grace or cure period, if any, set forth in the Mortgage, or (b) any other Event of Default described in the Note, the Mortgage or any of the other Loan Documents.

 

  

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7. Rights and Remedies Upon Default.  At any time upon or following the occurrence of any Event of Default, the Assignee, at its option, may exercise any one or more of the following rights and remedies without any obligation to do so, without in any way waiving such Event of Default, without further notice or demand on the Assignor, without regard to the adequacy of the security for the obligations secured hereby, without releasing the Assignor or any guarantor of the Note from any obligation, and with or without bringing any action or proceeding to foreclose the Mortgage or any other lien or security interest granted by the Loan Documents:

 

(a) Declare the unpaid balance of the principal sum of the Note, together with all accrued and unpaid interest thereon, immediately due and payable;

 

(b) Enter upon and take possession of the Premises, either in person or by agent or by a receiver appointed by a court, and have, hold, manage, lease and operate the same on such terms and for such period of time as the Assignee may deem necessary or proper, with full power to make from time to time all alterations, renovations, repairs or replacements thereto or thereof as may seem proper to the Assignee, to make, enforce, modify and accept the surrender of Leases, to obtain and evict tenants, to fix or modify rents, and to do any other act which the Assignee deems necessary or proper;

 

(c) Either with or without taking possession of the Premises, demand, sue for, settle, compromise, collect, and give acquittances for all rents, issues, income and profits of and from the Premises and pursue all remedies for enforcement of the Leases and all the lessor’s rights therein and thereunder.  This Assignment shall constitute an authorization and direction to the tenants under the Leases to pay all rents and other amounts payable under the Leases to the Assignee, without proof of default hereunder, upon receipt from the Assignee of written notice to thereafter pay all such rents and other amounts to the Assignee and to comply with any notice or demand by the Assignee for observance or performance of any of the covenants, terms, conditions and agreements contained in the Leases to be observed or performed by the tenants thereunder, and the Assignor shall facilitate in all reasonable ways the Assignee’s collection of such rents, issues, income and profits, and upon request will execute written notices to the tenants under the Leases to thereafter pay all such rents and other amounts to the Assignee; and

 

(d) Make any payment or do any act required herein of the Assignor in such manner and to such extent as the Assignee may deem necessary, and any amount so paid by the Assignee shall become immediately due and payable by the Assignor with interest thereon until paid at the Default Rate and shall be secured by this Assignment.

 

8. Application of Proceeds.  All sums collected and received by the Assignee out of the rents, issues, income and profits of the Premises following the occurrence of any one or more Events of Default shall be applied in such order as the Assignee shall elect in its sole and absolute discretion, subject to the terms of the Mortgage.

 

  

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9. Limitation of the Assignee’s Liability.  The Assignee shall not be liable for any loss sustained by the Assignor resulting from the Assignee’s failure to let the Premises or from any other act or omission of the Assignee in managing, operating or maintaining the Premises following the occurrence of an Event of Default.  The Assignee shall not be obligated to observe, perform or discharge, nor does the Assignee hereby undertake to observe, perform or discharge any covenant, term, condition or agreement contained in any Lease to be observed or performed by the lessor thereunder, or any obligation, duty or liability of the Assignor under or by reason of this Assignment.  The Assignor shall and does hereby agree to indemnify, defend (using counsel reasonably satisfactory to the Assignee) and hold the Assignee harmless from and against any and all liability, loss or damage which the Assignee may incur under any Lease or under or by reason of this Assignment and of and from any and all claims and demands whatsoever which may be asserted against the Assignee by reason of any alleged obligation or undertaking on its part to observe or perform any of the covenants, terms, conditions and agreements contained in any Lease; provided, however, in no event shall the Assignor be liable for any liability, loss or damage which the Assignor incurs as a result of the Assignee’s gross negligence or willful misconduct.  Should the Assignee incur any such liability, loss or damage under any Lease or under or by reason of this Assignment, or in the defense of any such claim or demand, the amount thereof, including costs, expenses and reasonable attorneys’ fees, shall become immediately due and payable by the Assignor with interest thereon at the Default Rate and shall be secured by this Assignment.  This Assignment shall not operate to place responsibility upon the Assignee for the care, control, management or repair of the Premises or for the carrying out of any of the covenants, terms, conditions and agreements contained in any Lease, nor shall it operate to make the Assignee responsible or liable for any waste committed upon the Premises by any tenant, occupant or other party, or for any dangerous or defective condition of the Premises, or for any negligence in the management, upkeep, repair or control of the Premises resulting in loss or injury or death to any tenant, occupant, licensee, employee or stranger.  Nothing set forth herein or in the Mortgage, and no exercise by the Assignee of any of the rights set forth herein or in the Mortgage shall constitute or be construed as constituting the Assignee a “mortgagee in possession” of the Premises, in the absence of the taking of actual possession of the Premises by the Assignee pursuant to the provisions hereof or of the Mortgage.

 

10. No Waiver.  Nothing contained in this Assignment and no act done or omitted to be done by the Assignee pursuant to the rights and powers granted to it hereunder shall be deemed to be a waiver by the Assignee of its rights and remedies under any of the Loan Documents.  This Assignment is made and accepted without prejudice to any of the rights and remedies of the Assignee under the terms and provisions of such instruments, and the Assignee may exercise any of its rights and remedies under the terms and provisions of such instruments either prior to, simultaneously with, or subsequent to any action taken by it hereunder.  The Assignee may take or release any other security for the performance of the obligations secured hereby, may release any party primarily or secondarily liable therefor, and may apply any other security held by it for the satisfaction of the obligations secured hereby without prejudice to any of its rights and powers hereunder.

 

11. Further Assurances.  The Assignor shall execute or cause to be executed such additional instruments (including, but not limited to, general or specific assignments of such Leases as the Assignee may designate) and shall do or cause to be done such further acts, as the Assignee may request, in order to permit the Assignee to perfect, protect, preserve and maintain the assignment made to the Assignee by this Assignment.

 

  

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12. Security Deposits.  The Assignor acknowledges that the Assignee has not received for its own account any security deposited by any tenant pursuant to the terms of the Leases and that the Assignee assumes no responsibility or liability for any security so deposited.

 

13. Severability.  If any provision of this Assignment is deemed to be invalid by reason of the operation of law, or by reason of the interpretation placed thereon by any administrative agency or any court, the Assignee and the Assignor shall negotiate an equitable adjustment in the provisions of the same in order to effect, to the maximum extent permitted by law, the purpose of this Assignment and the validity and enforceability of the remaining provisions, or portions or applications thereof, shall not be affected thereby and shall remain in full force and effect.

 

14. Successors and Assigns.  This Assignment is binding upon the Assignor and its legal representatives, successors and assigns, and the rights, powers and remedies of the Assignee under this Assignment shall inure to the benefit of the Assignee and its successors and assigns.

 

15. Written Modifications.  This Assignment shall not be amended, modified or supplemented without the written agreement of the Assignor and the Assignee at the time of such amendment, modification or supplement.

 

16. Duration.  This Assignment shall become null and void at such time as the Borrowers shall have paid the principal sum of the Note, together with all interest thereon, and shall have fully paid and performed all of the other obligations secured hereby and by the other Loan Documents.

 

17. Governing Law.  This Assignment shall be governed by and construed in accordance with the laws of the State of Illinois, except to the extent of procedural and substantive matters relating only to the creation, perfection, validity, foreclosure and enforcement of rights, liens, security interests and remedies against the Premises, which matters shall be governed by the laws of the State of Wisconsin.

 

18. Notices.  All notices, demands, requests and other correspondence which are required or permitted to be given hereunder shall be deemed sufficiently given when delivered or mailed in the manner and to the addresses of the Assignor and the Assignee, as the case may be, as specified in the Mortgage.

 

19. WAIVER OF TRIAL BY JURY.  THE ASSIGNOR AND THE ASSIGNEE (BY ACCEPTANCE HEREOF), HAVING BEEN REPRESENTED BY COUNSEL, EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (A) UNDER THIS ASSIGNMENT OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS ASSIGNMENT OR (B) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS ASSIGNMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  THE ASSIGNOR AGREES THAT IT WILL NOT ASSERT ANY CLAIM AGAINST THE ASSIGNEE OR ANY OTHER PERSON INDEMNIFIED UNDER THIS ASSIGNMENT ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

 

  

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IN WITNESS WHEREOF, the Assignor has executed and delivered this Assignment of Rents and Leases as of the day and year first above written.

 

 

 

 

LIFEWAY WISCONSIN, INC.,

an Illinois corporation

 

By:  /s/ Edward Smolyansky                       

Name: Edward Smolyansky                

Title:   President                                  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

STATE OF ILLINOIS                        )

)  SS.

COUNTY OF _______                    )

 

The undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Edward Smolyansky , the President , of LIFEWAY WISCONSIN, INC., an Illinois corporation, who is personally known to me to be the same person whose name is subscribed to the foregoing instrument as such     HE  , appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein set forth.

 

GIVEN under my hand and notarial seal this 6th day of September, 2013.

 

 

	 	/s/ S. McDonald
	 	Notary Public
	 	 
	 	My Commission Expires:  11/12/13

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

EXHIBIT “A”

 

LEGAL DESCRIPTION OF REAL ESTATE

 

Parcel 2 and part of vacated Aviation Drive, Certified Survey Map Number 7492, part of the Northeast Quarter of the Northwest Quarter and part of the Northwest Quarter of the Northwest Quarter, Section 34, Township 7 North, Range 19 East, City of Waukesha, Waukesha County, Wisconsin being more particularly described as follows:

 

Beginning at the Southwest corner of said Parcel 2, Certified Survey Map Number 7492; thence North 06 degrees 29’ 00” East, 141.38 feet; thence South 88 degrees 51’ 00” West, 843.65 feet; thence North 12 degrees 07’ 07” West, 13.75 feet; thence 710.62 feet along the arc of a curve to the left having a radius of 883.53 feet and a long chord subtended bearing North 33 degrees 53’ 49” West, 691.62 feet; thence

 

North 31 degrees 14’ 43” East, 108.30 feet; thence North 90 degrees 00’ 00” East, 1,251.27 feet; thence South 06 degrees 29’ 00” West, 617.27 feet; thence South 89 degrees 33’ 54” East, 658.88 feet; thence 180.28 feet along the arc of a curve to the left with a radius of 350.00 feet and a long chord subtended bearing South 16 degrees 50’ 52” East, 178.29 feet; thence South 88 degrees 51’ 00” West, 732.31 feet to the point of beginning.

 

Subject to an easement for public road purposes over the Northerly 33.00 feet thereof.  The above-described property is intended to include each of the following

 

Parcel I and Parcel II.

 

PARCEL I:

 

All that part of the Northwest 1/4 of Section 34, Township 7 North, Range 19 East, in the City of Waukesha, Waukesha County, Wisconsin.

 

Commencing at the North 1/4 Section corner of said Section 34; thence West along the North line of said Section, 1045.87 feet to the point of beginning of lands herein described; thence South 6 degrees 29 minutes West along an old fence line, 667.45 feet; thence South 88 degrees 29 minutes West along an existing fence line, 894.39 feet to the centerline of Country Trunk Highway “T”; thence North 11 degrees 00 minutes West along said centerline, 5.07 feet to a point of curve; thence along the arc of a curve of 833.53 feet radius, the chord of which bears North 43 degrees 55 minutes 45 seconds West, 912.32 feet to a point on the West line of said Section 34; thence North 0 degrees 15 minutes West along said West section line, 19.10 feet to the North line of said Section; thence East along said North line of said Section, 1603.53 feet to the point of beginning.

 

EXCEPTING property conveyed to the City of Waukesha for highway purposes by Warranty Deed recorded July 20, 1976, in Reel 189, Image 599, as Document No. 959759.

 

THE ABOVE PARCEL I, BEING AND INTENDED TO BE THE SAME PROPERTY CONVEYED BY WARRANTY DEED RECORDED NOVEMBER 22, 1954, AS DOCUMENT NUMBER 407173, VOLUME 651, PAGE 144 IN THE REGISTER OF DEEDS OF WAUKESHA COUNTY, WISCONSIN.

 

  

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Tax Key No. WAKC 998.996 PARCEL II:

 

Parcel 2 of Certified Survey Map No. 7492, recorded September 30, 1994, in Volume 64 of Certified Survey Maps, Pages 9, 10 and 11, as Document No. 1997344, being a part of the Northwest 1/4 of Section 34, Township 7 North, Range 19 East, in the City of Waukesha, Waukesha County, Wisconsin.

 

ALSO:

 

All that part of Parcel 1 of Certified Survey Map No. 7492, recorded September 30, 1994, in Volume 64 of Certified Survey Maps, Pages 9, 10 and 11, as Document No. 1997344, being a part of the Northwest 1/4 of Section 34, Township 7 North, Range 19 East, in the City of Waukesha, Waukesha County, Wisconsin, bounded and described as follows: Commencing at the Northeast corner of Parcel 2 of said Certified Survey Map No. 7492; thence proceeding South 89 degrees 33 minutes 54 seconds East, 0.53 feet to a point on the Westerly right of way of Aviation Drive; thence Southerly 180.28 feet along said Westerly right of way and the arc of a curve of the left, with a radius of 350.00 feet, chord of said curve bears South 16 degrees 50 minutes 59 seconds East, 178.29 feet; thence South 88 degrees 51 minutes 00 seconds West, 55.37 feet to a point; thence North 01 degrees 03 minutes 10 seconds East, 171.78 feet to the point of beginning.

 

THE ABOVE PARCEL II, BEING AND INTENDED TO BE THE SAME PROPERTY CONVEYED BY WARRANTY DEED RECORDED APRIL 5, 1999, AS DOCUMENT NUMBER 2444277, REEL NO. 2876, IMAGE 1017 IN THE REGISTER OF DEEDS OF WAUKESHA COUNTY, WISCONSIN.

 

Tax Key No. WAKC 998.059

 

 

 

 

 

 

 

 

 

 

 

A-2ex10-3_17567.htm

EXHIBIT 10.3

 

ENVIRONMENTAL INDEMNITY AGREEMENT

 

This ENVIRONMENTAL INDEMNITY AGREEMENT dated as of the 4th day of September, 2013 (the “Agreement”), is executed by LIFEWAY FOODS, INC., an Illinois corporation, FRESH MADE, INC., a Pennsylvania corporation, HELIOS NUTRITION LIMITED, a Minnesota corporation, PRIDE OF MAIN STREET DAIRY, LLC, a Minnesota limited liability company, STARFRUIT, LLC, an Illinois limited liability company, and LIFEWAY WISCONSIN, INC., an Illinois corporation (collectively, the “Borrower”); each Borrower is individually being referred to herein as an “Indemnitor” and collectively as the “Indemnitors”) to and for the benefit of THE PRIVATEBANK AND TRUST COMPANY, together with its successors and assigns (the “Lender”).

 

 

R E C I T A L S:

 

A.           The Lender has extended to the Borrower a loan in the principal amount of Five Million and No/100 Dollars ($5,000,000.00) (the “Loan”).

 

B.           The Loan is evidenced by that certain Promissory Note in the original principal amount of $5,000,000.00, dated of even date herewith (“Note”), executed by the Borrower and made payable to the order of the Lender. The Note is secured by that certain Mortgage, Security Agreement, Assignment of Rents and Leases and Fixture Filing dated as of even date herewith (the “Mortgage”), executed by Lifeway Wisconsin, Inc., an Illinois corporation to and for the benefit of the Lender, encumbering real property located in Waukesha County, Wisconsin, together with the other collateral as described in the Mortgage (the real property and other collateral being collectively referred to as the “Secured Real Property”). The Secured Real Property is hereinafter collectively referred to as the “Property”, and are described on Exhibit “A” attached hereto and made apart hereof. Capitalized terms used and not specifically defined herein shall bear the same meaning as in the Mortgage.

 

C.           As a condition to making the Loan, the Lender has required that the. Indemnitors indemnify the Lender with respect to environmental conditions and operations at the Property as set forth below.

 

NOW, THEREFORE, to induce the Lender to extend the Loan to the Borrower and in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Indemnitors hereby covenant and agree for the benefit of the Lender and the other Indemnified Parties (as defined below), as follows:

 

 

  

  

  

 

A G R E E M E N T S:

 

1.           ENVIRONMENTAL MATTERS.

 

1.1 Definitions. For purposes of this Agreement the following terms have the following meanings:

 

“Business Day” shall mean any day other than a Saturday, Sunday or a legal holiday on which banks are authorized or required to be closed for the conduct of commercial banking business in Chicago, Illinois.

 

“Environmental Laws” shall mean any and all federal, state and local laws (whether under common law, statute, rule, regulation or otherwise), requirements under permits or other authorizations issued with respect thereto, and other orders, decrees, judgments, directives or other requirements of any governmental authority relating to or imposing liability or standards of conduct (including disclosure or notification) concerning protection of human health or the environment or Hazardous Substances or any activity involving Hazardous Substances, all as previously and in the future to be amended.

 

“Hazardous Substance” shall mean, but is not limited to, any substance, chemical, material or waste (a) the presence of which causes a nuisance or trespass of any kind; (b) which is regulated by any federal, state or local governmental authority because of its toxic, flammable, corrosive, reactive, carcinogenic, mutagenic, infectious, radioactive, or other hazardous property or because of its effect on the environment, natural resources or human health and safety, including, but not limited to, petroleum and petroleum products, asbestos-containing materials, polychlorinated biphenyls, lead and lead-based paint, radon, radioactive materials, flammables and explosives; or (c) which is designated, classified, or regulated as being a hazardous or toxic substance, material, pollutant, waste (or a similar such designation) under any federal, state or local law, regulation or ordinance, including under any Environmental Law such as the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §11001 et seq.), the Hazardous Substances Transportation Act (49 U.S.C. §1801 et seq.), or the Clean Air Act (42 U.S.C. §7401 et seq.).

 

“Indemnified Parties” shall mean and includes the Lender, its parent, subsidiaries, and affiliated companies, assignees of any of the Lender’s interest in the Loan or the Loan Documents, any servicer or originator of the Loan, and the officers, directors, employees, agents and contractors of any of the foregoing parties.

 

“Indemnitors” shall mean each Borrower, jointly and severally.

 

“Loan Documents” shall mean the Note, the Mortgage, this Agreement and any other document given by any Indemnitor to evidence or secure the Loan, as amended from time to time.

 

  

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“Release” shall mean any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances.

 

“Reports” shall mean the environmental studies and reports identified on Exhibit “B” attached hereto and made a part hereof.

 

1.2 Environmental Representations and Warranties. Except as otherwise fully disclosed by the Indemnitors to the Indemnified Parties in writing detailing any exceptions to the following environmental representations and warranties or fully disclosed to the Indemnified Parties in the Reports, the Indemnitors hereby represent and warrant to the Indemnified Parties that, as of the date hereof, to the best of Indemnitors’ knowledge:

 

(a) neither the Property nor any operations of the Borrower are in violation of any Environmental Laws or any permit or other authorization issued pursuant thereto;

 

(b) no Hazardous Substances are, or to the Indemnitors’ knowledge and belief, have been handled, generated, stored, processed or otherwise managed on or at the Property except for those substances used by the Borrower or tenants under leases at the Property in the ordinary course of their businesses and in compliance with all Environmental Laws;

 

(c) there are not, to the Indemnitors’ knowledge, any past or present Releases of Hazardous Substances in, on, under or from the Property;

 

(d) the Property is not subject to any private or governmental lien or judicial or administrative notice or action relating to Hazardous Substances;

 

(e) there are no existing or closed underground storage tanks or other underground storage receptacles for Hazardous Substances on the Property;

 

(f) the Borrower has received no notice of, and to the Borrower’s knowledge, there exists no investigation, action, proceeding or claim by any agency, authority or unit of government or by any third party which could result in any liability, penalty, sanction or judgment under any Environmental Laws with respect to any condition, use or operation of the Property or any of the Borrower’s operations, nor does the Borrower know of any basis for such a claim;

 

(g) there has been no claim by any party that any use, operation or condition of the Property or any of the Borrower’s operations has caused any nuisance or any other liability or adverse condition on any other property nor does the Borrower know of any basis for such a claim; and

 

(h) there are no agreements, consent orders, decrees, judgments, license or permit conditions or other orders or directives of any federal, state or local court, governmental agency or authority or agreements, whether settlement agreements or otherwise, with any third parties relating to the ownership, use, operation, sale, transfer or conveyance of the Property that require any change in the present condition of the Property or any work, repairs, construction, containment, clean up, investigations, studies, removal or other remedial action or capital expenditures with respect to the Property.

 

  

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1.3 Environmental Covenants. The Borrower covenants and agrees that the Borrower: (a) shall keep or cause the Property to be kept free from Hazardous Substances (except those substances used by the Borrower or tenants under leases at the Property in the ordinary course of their businesses and in compliance with all Environmental Laws); (b) shall not install or use any underground storage tanks, shall not itself engage in and shall expressly prohibit all tenants of space in the Improvements from engaging in the use, generation, handling, storage, production, processing or management of Hazardous Substances, except in the ordinary course of their businesses and in compliance with all Environmental Laws; (c) shall not itself cause or allow and shall expressly prohibit the Release of Hazardous Substances at, on, under, or from the Property; shall itself comply and shall expressly require all tenants and any other persons who may come upon the Property to comply with all Environmental Laws; (d) shall keep the Property free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of the Borrower or any other person or entity (“Environmental Liens”); (e) shall comply and cause all occupants of the Property to comply with the recommendations of any qualified environmental engineer or other expert that apply or pertain to the Property; and (f) without limiting the generality of the foregoing, during the term of this Agreement, shall not use any construction materials which contain asbestos nor install in the Improvements on the Property or permit to be installed in the Improvements on the Property any materials which contain asbestos.

 

1.4 Notice and Access. The Indemnitors shall promptly notify the Indemnified Parties in writing if any of the Indemnitors knows, suspects or believes there is or are (a) any Hazardous Substances, other than those used by the Borrower or tenants under leases at the Property in the ordinary course of their businesses and in compliance with all Environmental Laws, present on the Property; (b) any Release of Hazardous Substances in, on, under, from or migrating towards the Property; (c) any non-compliance with Environmental Laws related in any way to the Property; (d) any actual or potential Environmental Liens; (e) any investigation or action or claim, whether threatened or pending, by any governmental agency or third party pertaining to the Release of Hazardous Substances in, on, under, from, or migrating towards the Property; and/or (f) any installation of wells, piping, or other equipment at the Property to investigate, remediate or otherwise address any Release of Hazardous Substances at, on, in or in the vicinity of the Property. The Indemnitors shall promptly, at the Indemnitors’ sole cost and expense, take all reasonable actions with respect to any Hazardous Substances or other environmental condition at, on or under the Property or other affected property, including all investigative, monitoring, removal, containment and remedial actions in accordance with all applicable Environmental Laws, including the payment, at no expense to the Indemnified Parties, of all clean-up, administrative and enforcement costs of applicable governmental agencies which may be asserted against the Property in all instances as necessary to (i) comply with all applicable Environmental Laws; (ii) protect human health or the environment; (iii) allow continued use, occupation, or operation of the Property; and/or (iv) maintain the fair market value of the Property (collectively, the “Completion of the Clean-up”). In the event the Indemnitors fail to do so, the Indemnified Parties may, but shall not be obligated or have any duty to, cause the Completion of the Clean-up of the Property. The Indemnitors hereby grant to the Indemnified Parties and their agents and employees access to the Property as provided in Section 1.6 below, and a license to remove any items deemed by the Indemnified Parties to be Hazardous Substances and to do all things the Indemnified Parties shall deem necessary to cause the Completion of the Clean-up of the Property.

 

  

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1.5 Indemnification. The Indemnitors covenant and agree, at the Indemnitors’ sole cost and expense, to indemnify, defend (at trial and appellate levels, and with attorneys, consultants and experts acceptable to the Indemnified Parties), and hold the Indemnified Parties harmless from and against any and all liens, damages (including, without limitation, consequential damages), losses, liabilities, obligations, settlement payments, penalties, claims, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including reasonable attorneys’, consultants’ and experts’ fees and disbursements actually incurred in investigating, defending, settling or prosecuting any claim, litigation or proceeding) which may at any time be imposed upon, incurred by or asserted against the Indemnified Parties or the Property, and arising directly or indirectly from or out of:

 

(a) the past, present or future presence, Release or threat of Release of any Hazardous Substances on, in, under or affecting all or any portion of the Property or any surrounding areas, regardless of whether or not caused by or within the control of any Indemnitor;

 

(b) the past, present or future violation of any Environmental Laws, relating to or affecting the Property or the Borrower’s operations, whether or not caused by or within the control of any Indemnitor;

 

(c) the failure by the Indemnitors to comply fully with the terms and conditions of this Section 1;

 

(d) any misrepresentation or inaccuracy in or the breach of any representation or warranty contained in this Section 1; or

 

(e) the enforcement of this Section 1, including any liabilities that arise as a result of the actions taken or caused to be taken by the Indemnified Parties under this Section 1, the cost of assessment, containment and/or removal of any and all Hazardous Substances from all or any portion of the Property or any surrounding areas, the cost of any actions taken in response to the presence, Release or threat of Release of any Hazardous Substances on, in, under or affecting any portion of the Property or any surrounding areas to prevent or minimize such Release or threat of Release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and costs incurred to comply with the Environmental Laws in connection with all or any portion of the Property or any surrounding areas. The Indemnified Parties’ rights under this Section 1 shall survive payment in full of the Borrower’s obligations under the Loan Documents and shall be in addition to all other rights of the Indemnified Parties under the Mortgage, the Note and the other Loan Documents. The foregoing notwithstanding, the Indemnitors’ obligations under this Section 1 with regard to any Post Transfer Indemnification Responsibilities (as hereinafter defined) shall be limited to such obligations directly or indirectly arising out of or resulting from any Hazardous Substances that were present or released in, on, or around any part of the Property, or in the soil, groundwater or soil vapor on or under the Property at any time before or while the Borrower held title to or was in possession or control of the Property (the “Indemnitors’ Continuing Responsibility”); provided, however, that any Post Transfer Indemnification Responsibilities incurred or suffered by the Indemnified Parties shall be presumed, unless shown by a preponderance of the evidence to the contrary, to be the Indemnitors’ Continuing Responsibility. “Post Transfer Indemnification Responsibilities” shall mean any obligations hereunder to indemnify, defend, and hold the Indemnified Parties harmless arising after the Indemnified Parties cease to hold a security interest in the Property or acquire title to the Property as a result of foreclosure, deed in lieu of foreclosure, or other transfer of the Property.

 

  

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Notwithstanding anything contained herein to the contrary, the Indemnitors shall not have any obligations hereunder to any Indemnified Party with respect to the matters determined by a court of competent jurisdiction by final and nonappealable judgment to have been caused by or resulting from the willful misconduct or gross negligence of such Indemnified Party.

 

1.6 Site Visits, Observation and Testing. The Indemnified Parties and their agents and representatives shall have the right at any reasonable time to enter and visit the Property for the purposes of observing the Property, taking and removing soil or groundwater samples, and conducting tests on any part of the Property. The Indemnified Parties have no duty, however, to visit or observe the Property or to conduct tests, and no site visit, observation or testing by any Indemnified Party shall impose any liability on any Indemnified Party. In no event shall any site visit, observation or testing by any Indemnified Party be a representation that Hazardous Substances are or are not present in, on or under the Property, or that there has been or shall be compliance with any law, regulation or ordinance pertaining to Hazardous Substances or any other applicable governmental law. Neither the Borrower nor any other party is entitled to rely on any site visit, observation or testing by any Indemnified Party. The Indemnified Parties owe no duty of care to protect the Indemnitors or any other party against, or to inform the Indemnitors or any other party of, any Hazardous Substances or any other adverse condition affecting the Property. The Indemnified Parties may in their discretion disclose to the Indemnitors or any other party any report or findings made as a result of, or in connection with, any site visit, observation or testing by the Indemnified Parties. The Indemnitors understand and agree that the Indemnified Parties make no representation or warranty to the Indemnitors or any other party regarding the truth, accuracy or completeness of any such report or findings that may be disclosed. The Indemnitors also understand that, depending on the results of any site visit, observation or testing by any Indemnified Party which are disclosed to the Indemnitors, the Indemnitors may have a legal obligation to notify one or more environmental agencies of the results and that such reporting requirements are site-specific and are to be evaluated by the Indemnitors without advice or assistance from the Indemnified Parties. Any Indemnified Party shall give the Borrower reasonable notice before entering the Property. Such Indemnified Party shall make reasonable efforts to avoid interfering with the Borrower’s use of the Property in exercising any rights provided in this Section 1.

 

2.   REINSTATEMENT OF OBLIGATIONS. If at any time all or any part of any payment made by the Borrower or received by the Indemnified Parties from the Borrower under or with respect to this Agreement is or must be rescinded or returned for any reason whatsoever, including the insolvency, bankruptcy or reorganization of any Indemnitor under any Debtor Relief Law (as defined below), then the obligations of the Indemnitors hereunder shall, to the extent of the payment rescinded or returned, be deemed to have continued in existence, notwithstanding such previous payment made by the Indemnitors, or receipt of payment by an Indemnified Party, and the obligations of the Indemnitors hereunder shall continue to be effective or be reinstated, as the case may be, as to such payment, all as though such previous payment by the Indemnitors had never been made.

 

  

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3.   WAIVERS. To the extent permitted by law, each of the Indemnitors, for itself and its successors, hereby waives and agrees not to assert or take advantage of:

 

(a) any right to require the Indemnified Parties to proceed against any other person or to proceed against or exhaust any security held by the Indemnified Parties at any time or to pursue any other remedy in the Indemnified Parties’ power or under any other agreement before proceeding against the Indemnitors hereunder;

 

(b) the defense of the statute of limitations in any action hereunder;

 

(c) any defense that may arise by reason of the incapacity, lack of authority, death or disability of any other person or persons or the failure of the Indemnified Parties to file or enforce a claim against the estate (in administration, bankruptcy or any other proceedings) of any other person or person;

 

(d) demand, presentment for payment, notice of nonpayment, protest, notice of protest and all other notices of any kind, or the lack of any thereof, including, without limiting the generality of the foregoing, notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any action or non-action on the part of the Indemnified Parties, any endorser or creditor of any of the Indemnitor or any other person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held by the Indemnified Parties;

 

(e) any right or claim of right to cause a marshalling of the assets of the Indemnitors;

 

(f) any principle or provision of law, statutory or otherwise, which is or might be in conflict with the terms and provisions of this Agreement;

 

(g) any duty on the part of the Indemnified Parties to disclose to the Indemnitors any facts the Indemnified Parties may now or hereafter know about the Property, regardless of whether the Indemnified Parties have reason to believe that any such facts materially increase the risk beyond that which the Indemnitors intend to assume or have reason to believe that such facts are unknown to the Indemnitors or have a reasonable opportunity to communicate such facts to the Indemnitors, it being understood and agreed that the Indemnitors are fully responsible for being and keeping informed of the condition of the Property and of any and all circumstances bearing on the risk that liability may be incurred hereunder;

 

(h) any lack of notice of disposition or of manner of disposition of any collateral for the Loan;

 

(i) any invalidity, irregularity or unenforceability, in whole or in part, of any one or more of the Loan Documents;

 

  

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(j) any lack of commercial reasonableness in dealing with the collateral for the Loan;

 

(k) any deficiencies in the collateral for the Loan or any deficiency in the ability of the Indemnified Parties to collect or to obtain performance from any person or entities now or hereafter liable for the payment and performance of any obligation hereby guaranteed;

 

(l) any assertion or claim that the automatic stay provided by 11 U.S.C. §362 (arising upon the voluntary or involuntary bankruptcy proceeding of the Indemnitors) or any other stay provided under any other debtor relief law (whether statutory, common law, case law or otherwise) of any jurisdiction whatsoever, now or hereafter in effect, which may be or become applicable, shall operate or be interpreted to stay, interdict, condition, reduce or inhibit the ability of the Indemnified Parties to enforce any of their rights, whether now or hereafter required, which the Indemnified Parties may have against the Indemnitors or the collateral for the Loan; and

 

(m) any modifications of the Loan Documents or any obligation of the Indemnitors relating to the Loan by operation of law or by action of any court, whether pursuant to the Bankruptcy Reform Act of 1978, as amended or recodified (the “Bankruptcy Code”), or under any other present or future state or federal law regarding bankruptcy, reorganization or other relief to debtors (collectively, the “Debtor Relief Law”), or otherwise.

 

4.   GENERAL PROVISIONS.

 

4.1 Full Recourse. All of the terms and provisions of this Agreement are full recourse obligations of the Indemnitors and not restricted by any limitation on personal liability.

 

4.2 Secured Obligations. The Indemnitors hereby acknowledge that the obligations of the Indemnitors under this Agreement are secured by the lien of the Mortgage and the security interests and other collateral described in the Mortgage and the other Loan Documents.

 

4.3 Survival. This Agreement shall be deemed to be continuing in nature and shall remain in full force and effect and shall survive the payment of the indebtedness evidenced and secured by the Loan Documents and the exercise of any remedy by the Indemnified Parties under the Mortgage or any of the other Loan Documents, including any foreclosure or deed in lieu thereof, even if, as a part of such remedy, the Loan is paid or satisfied in full.

 

4.4 No Recourse Against the Indemnified Parties. The Indemnitors shall not have any right of recourse against the Indemnified Parties by reason of any action the Indemnified Parties may take or omit to take under the provisions of this Agreement or under the provisions of any of the Loan Documents.

 

4.5 Reservation of Rights. Nothing contained in this Agreement shall prevent or in any way diminish or interfere with any rights or remedies, including the right to contribution, which the Indemnified Parties may have against the Indemnitors or any other party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (codified at Title 42 U.S.C. §9601 et seq.), as it may be amended from time to time, or any other applicable federal, state or local laws, all such rights being hereby expressly reserved.

 

  

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4.6 Rights Cumulative; Payments. The Indemnified Parties’ rights under this Agreement shall be in addition to all rights of the Indemnified Parties under the Note, the Mortgage and the other Loan Documents. Further, payments made by the Indemnitors under this Agreement shall not reduce in any respect the Borrower’s obligations and liabilities under the Note, the Mortgage and the other Loan Documents.

 

4.7 No Limitation on Liability. Each of the Indemnitors hereby consents and agrees that the Indemnified Parties may at any time and from time to time without further consent from the Indemnitors do, permit or cause any of the following events, and the liability of the Indemnitors under this Agreement shall be unconditional and absolute and shall in no way be impaired or limited by the occurrence of any of the following events, whether occurring with or without notice to the Indemnitors, or with or without consideration: (a) any extensions of time for performance required by any of the Loan Documents or extension or renewal of the Note; (b) any sale, assignment or foreclosure of the Note, the Mortgage or any of the other Loan Documents or any sale or transfer of the Property; (c) any change in the composition of any of the Indemnitors; (d) the accuracy or inaccuracy of the representations and warranties made by the Indemnitors herein or in any of the Loan Documents; (e) the release of any of the lndemnitors or of any other person or entity from performance or observance of any of the agreements, covenants, teems or conditions contained in any of the Loan Documents by operation of law, the Indemnified Parties’ voluntary act or otherwise; (f) the release or substitution in whole or in part of any security for the Loan; (g) the Lender’s failure to record the Mortgage or to file any financing statement (or the Lender’s improper recording or filing thereof) or to otherwise perfect, protect, secure or insure any lien or security interest given as security for the Loan; (h) the modification of the terms of any one or more of the Loan Documents; or (i) the taking or failure to take any action of any type whatsoever. No such action which the Indemnified Parties shall take or fail to take in connection with the Loan Documents or any collateral for the Loan, nor any course of dealing with the Indemnitors or any other person, shall limit, impair or release the Indemnitors’ obligations hereunder, affect this Agreement in any way or afford the Borrower any recourse against the Indemnified Parties. Nothing contained in this Paragraph shall be construed to require the Indemnified Parties to take or refrain from taking any action referred to herein.

 

4.8 Entire Agreement; Amendment; Severability. This Agreement contains the entire agreement between the parties respecting the matters herein set forth and supersedes (except as to the Mortgage) all prior agreements, whether written or oral, between the parties respecting such matters. Any amendments or modifications hereto, in order to be effective, shall be in writing and executed by the parties hereto. If any provision or obligation under this Agreement or any of the other Loan Documents shall be determined by a court of competent jurisdiction to be invalid, illegal or unenforceable, that provision shall be deemed severed from the Loan Documents and the validity, legality and enforceability of the remaining provisions or obligations shall remain in full force as though the invalid, illegal or unenforceable provision had never been a part of the Loan Documents.

 

  

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4.9 Governing Law; Binding Effect. This Agreement shall be governed by and construed in accordance with the laws of the State in which the Property is located, except to the extent that the applicability of any of such laws may now or hereafter be preempted by Federal law, in which case such Federal law shall so govern and be controlling. The terms, covenants and conditions of this Agreement shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties. The Indemnified Parties and any successor may, at any time, sell, transfer, or assign its interest under the Note, the Mortgage, the other Loan Documents, any or all servicing rights with respect thereto, and this Agreement or grant participations. The Indemnified Parties may forward to each purchaser, transferee, assignee, servicer, participant or investor (all of the foregoing entities collectively referred to as an “Investor”) and each prospective Investor, all documents, financial and other information which the Indemnified Parties now have or may hereafter acquire relating to (a) the Loan; (b) the Property and its operation (including, without limitation, copies of all leases, subleases or any other agreements concerning the use and occupancy of the Property); and/or (c) any party connected with the Loan (including, without limitation, the Borrower, any partner or member of the Borrower, and any constituent partner or member of the Borrower). The representations, warranties, obligations, covenants, and indemnity obligations of the Indemnitors under this Agreement shall also benefit and apply with respect to any purchaser, transferee, assignee, participant, servicer or investor.

 

4.10 Notices. All notices or other communications required or permitted to be given pursuant hereto shall be given in the manner specified in the Mortgage directed to the parties at their respective addresses as provided therein.

 

4.11 No Waiver: Time of Essence; Interpretation; Counting of Days. The failure of any party hereto to enforce any right or remedy hereunder, or to promptly enforce any such right or remedy, shall not constitute a waiver thereof nor give rise to any estoppel against such party nor excuse any of the parties hereto from their respective obligations hereunder. Any waiver of such right or remedy must be in writing and signed by the party to be bound. Whenever used, the singular number shall include the plural, the plural the singular, and the words “Indemnified Parties” and “Indemnitors” shall include their respective successors, assigns, heirs, executors and administrators. The word “include(s)” means “include(s), without limitation”, and the word “including” means “including, but not limited to”. This Agreement is subject to enforcement at law or in equity, including actions for damages or specific performance. Time is of the essence of each and every term and condition of this Agreement. The term “days” when used herein shall mean calendar days. If any time period ends on a Saturday, Sunday or holiday officially recognized by the state within which the Property is located, the period shall be deemed to end on the next succeeding Business Day.

 

4.12 Headings. The headings of the sections and paragraphs of this Agreement are for convenience of reference only and shall not be construed in interpreting the provisions hereof.

 

4.13 Attorneys’ Fees. The Indemnitors agree to pay all of the Indemnified Parties’ costs and expenses, including reasonable attorneys’ fees, which may be incurred in enforcing or protecting the Indemnified Parties’ rights or interests. From the time(s) incurred until paid in full to the Indemnified Parties, all such sums shall bear interest at the Default Rate.

 

  

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4.14 Successive Actions. A separate right of action hereunder shall arise each time the Indemnified Parties acquires knowledge of any matter indemnified by the Indemnitors under this Agreement. Separate and successive actions may be brought hereunder to enforce any of the provisions hereof at any time and from time to time. No action hereunder shall preclude any subsequent action, and the Indemnitors hereby waive and covenant not to assert any defense in the nature of splitting of causes of action or merger of judgments.

 

4.15 Joint and Several Liability. If more than one person or entity is signing this Agreement as the Indemnitors, their obligations under this Agreement will be joint and several. As to any of the Indemnitors that is a partnership, the obligations of such Indemnitor under this Agreement are the joint and several obligation of each general partner thereof Any married person signing this Agreement agrees that recourse may be had against community property assets and against his or her separate property for the satisfaction of all obligations contained herein.

 

4.16 Reliance. The Indemnified Parties would not make the Loan to the Borrower without this Agreement. Accordingly, the Indemnitors intentionally and unconditionally enter into the covenants and agreements herein and understand that, in reliance upon and in consideration of such covenants and agreements, the Loan shall be made and, as part and parcel thereof, specific monetary and other obligations have been, are being and shall be entered into which would not be made or entered into but for such reliance.

 

4.17 Counterparts. This Agreement may be executed in any number of counterparts, all of which shall be taken to be one and the same instrument, for the same effect as if all parties hereto had signed the same signature page. Receipt of an executed signature page to this Agreement by facsimile or other electronic transmission shall constitute effective delivery thereof.

 

4.18 WAIVER OF TRIAL BY JURY. THE INDEMNITORS AND THE LENDER (BY ACCEPTANCE OF THIS AGREEMENT), HAVING BEEN REPRESENTED BY COUNSEL, EACH KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (a) UNDER THIS AGREEMENT OR ANY RELATED AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THIS AGREEMENT OR (b) ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING WILL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THE INDEMNITORS AGREE THAT THEY WILL NOT ASSERT ANY CLAIM AGAINST THE LENDER ON ANY THEORY OF LIABILITY FOR SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES.

 

4.19 Waiver of Bankruptcy Stay. The Indemnitors covenant and agree that upon the commencement of a voluntary or involuntary bankruptcy proceeding by or against any of the Indemnitors, such Indemnitor shall not seek a supplemental stay or otherwise pursuant to 11 U.S.C. §105 or any other provision of the Bankruptcy Code or any other Debtor Relief Law, to stay, interdict, condition, reduce or inhibit the ability of the Indemnified Parties to enforce any rights of the Indemnified Parties against such Indemnitor by virtue of this Agreement or otherwise.

 

  

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IN WITNESS’ WHEREOF’, the Indemnitors have jointly and severally executed this Environmental Indemnity Agreement as of the day and year first above written.

 

 

INDEMNITORS:

 

LIFEWAY FOODS, INC., 

an Illinois corporation

By: /s/ Julie Smolyansky                         

Name: Julie Smolyansky             

Title: President                              

FRESH MADE, INC., 

a Pennsylvania corporation

By: /s/ Edward Smolyansky                   

Name: Edward Smolyansky         

Title: President                          

HELIOS NUTRITION LIMITED, 

a Minnesota corporation

By: /s/ Edward Smolyansky                         

Name: Edward Smolyansky             

Title: CFO and Secretary                      

PRIDE OF MAIN STREET DAIRY, LLC, 

a Minnesota limited liability company

By: /s/ Edward Smolyansky                   

Name: Edward Smolyansky            

Title: Manager                                  

STARFRUIT, LLC, 

an Illinois limited liability company

By: /s/ Edward Smolyansky                      

Name: Edward Smolyansky               

Title: President                                

 

 

LIFEWAY WISCONSIN, INC., 

an Illinois corporation

By: /s/ Edward Smolyansky                     

Name: Edward Smolyansky         

Title: President                              

  

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EXHIBIT “A”

 

LEGAL DESCRIPTION

 

 

Parcel 2 and part of vacated Aviation Drive, Certified Survey Map Number 7492, part of the Northeast Quarter of the Northwest Quarter and part of the Northwest Quarter of the Northwest Quarter, Section 34, Township 7 North, Range 19 East, City of Waukesha, Waukesha County, Wisconsin being more particularly described as follows:

 

Beginning at the Southwest corner of said Parcel 2, Certified Survey Map Number 7492; thence North 06 degrees 29’ 00” East, 141.38 feet; thence South 88 degrees 51’ 00” West, 843.65 feet; thence North 12 degrees 07’ 07” West, 13.75 feet; thence 710.62 feet along the arc of a curve to the left having a radius of 883.53 feet and a long chord subtended bearing North 33 degrees 53’ 49” West, 691.62 feet; thence

 

North 31 degrees 14’ 43” East, 108.30 feet; thence North 90 degrees 00’ 00” East, 1,251.27 feet; thence South 06 degrees 29’ 00” West, 617.27 feet; thence South 89 degrees 33’ 54” East, 658.88 feet; thence 180.28 feet along the arc of a curve to the left with a radius of 350.00 feet and a long chord subtended bearing South 16 degrees 50’ 52” East, 178.29 feet; thence South 88 degrees 51’ 00” West, 732.31 feet to the point of beginning.

 

Subject to an easement for public road purposes over the Northerly 33.00 feet thereof. 

 

The above-described property is intended to include each of the following:

 

Parcel I and Parcel II.

 

PARCEL I:

 

All that part of the Northwest 1/4 of Section 34, Township 7 North, Range 19 East, in the City of Waukesha, Waukesha County, Wisconsin.

 

Commencing at the North 1/4 Section corner of said Section 34; thence West along the North line of said Section, 1045.87 feet to the point of beginning of lands herein described; thence South 6 degrees 29 minutes West along an old fence line, 667.45 feet; thence South 88 degrees 29 minutes West along an existing fence line, 894.39 feet to the centerline of Country Trunk Highway “T”; thence North 11 degrees 00 minutes West along said centerline, 5.07 feet to a point of curve; thence along the arc of a curve of 833.53 feet radius, the chord of which bears North 43 degrees 55 minutes 45 seconds West, 912.32 feet to a point on the West line of said Section 34; thence North 0 degrees 15 minutes West along said West section line, 19.10 feet to the North line of said Section; thence East along said North line of said Section, 1603.53 feet to the point of beginning.

 

EXCEPTING property conveyed to the City of Waukesha for highway purposes by Warranty Deed recorded July 20, 1976, in Reel 189, Image 599, as Document No. 959759.

 

THE ABOVE PARCEL I, BEING AND INTENDED TO BE THE SAME PROPERTY CONVEYED BY WARRANTY DEED RECORDED NOVEMBER 22, 1954, AS DOCUMENT NUMBER 407173, VOLUME 651, PAGE 144 IN THE REGISTER OF DEEDS OF WAUKESHA COUNTY, WISCONSIN.

 

  

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Tax Key No. WAKC 998.996 PARCEL H:

 

Parcel 2 of Certified Survey Map No. 7492, recorded September 30, 1994, in Volume 64 of Certified Survey Maps, Pages 9, 10 and 11, as Document No. 1997344, being a part of the Northwest 1/4 of Section 34, Township 7 North, Range 19 East, in the City of Waukesha, Waukesha County, Wisconsin.

 

ALSO:

 

All that part of Parcel 1 of Certified Survey Map No. 7492, recorded September 30, 1994, in Volume 64 of Certified Survey Maps, Pages 9, 10 and 11, as Document No. 1997344, being a part of the Northwest 1/4 of Section 34, Township 7 North, Range 19 East, in the City of Waukesha, Waukesha County, Wisconsin, bounded and described as follows: Commencing at the Northeast corner of Parcel 2 of said Certified Survey Map No. 7492; thence proceeding South 89 degrees 33 minutes 54 seconds East, 0.53 feet to a point on the Westerly right of way of Aviation Drive; thence Southerly 180.28 feet along said Westerly right of way and the arc of a curve of the left, with a radius of 350.00 feet, chord of said curve bears South 16 degrees 50 minutes 59 seconds East, 178.29 feet; thence South 88 degrees 51 minutes 00 seconds West, 55.37 feet to a point; thence North 01 degrees 03 minutes 10 seconds East, 171.78 feet to the point of beginning.

 

THE ABOVE PARCEL II, BEING AND INTENDED TO BE THE SAME PROPERTY CONVEYED BY WARRANTY DEED RECORDED APRIL 5, 1999, AS DOCUMENT NUMBER 2444277, REEL NO. 2876, IMAGE 1017 IN THE REGISTER OF DEEDS OF WAUKESHA COUNTY, WISCONSIN.

 

Tax Key No. WAKC 998.059

 

 

 

 

 

 

 

  

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EXHIBIT “B”

 

REPORTS

 

 

1.           Phase I Environmental Site Assessment of 2101 Delafield Street, Waukesha, Wisconsin, prepared by Vieau Associates Inc., dated as of March 26, 2013.

 

 

2.           Limited Subsurface Investigation Report of 2101 Delafield Street, Waukesha, Wisconsin, dated July 16, 2013, prepared by EBI Consulting.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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