-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QHfGAhIayaVLFsIZkEIAWvXdHH/UxX3veK1mkEhyC3qbCjhQ6+mZYZOV5h+BAON+ vvTF62o7f7YQ3OOQiQZRJw== 0000947871-99-000482.txt : 19991101 0000947871-99-000482.hdr.sgml : 19991101 ACCESSION NUMBER: 0000947871-99-000482 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19991029 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LIFEWAY FOODS INC CENTRAL INDEX KEY: 0000814586 STANDARD INDUSTRIAL CLASSIFICATION: DAIRY PRODUCTS [2020] IRS NUMBER: 363442829 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-50073 FILM NUMBER: 99737474 BUSINESS ADDRESS: STREET 1: 6431 W OAKTON CITY: MORTON GROVE STATE: IL ZIP: 60053 BUSINESS PHONE: 7089671010 MAIL ADDRESS: STREET 1: 6431 W OAKTON CITY: MORTON GROVE STATE: IL ZIP: 60053 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GROUPE DANONE CENTRAL INDEX KEY: 0001048515 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] IRS NUMBER: 000000000 STATE OF INCORPORATION: I0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 7 RUE DE TEHERAN STREET 2: 75381 PARIS CEDEX 08 CITY: FRANCE STATE: I0 BUSINESS PHONE: 33144352020 MAIL ADDRESS: STREET 1: 7 RUE DE TEHERAN STREET 2: 75381 PARIS CEDEX 08 CITY: FRANCE STATE: I0 SC 13D/A 1 SCHEDULE 13D AMENDMENT NO. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ------------------------------------------------------------------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 1)* Lifeway Foods, Inc. ----------------------------------- (Name of Issuer) Common Stock, no par value ----------------------------------- (Title of Class of Securities) 531914109 ----------------------------------- (CUSIP Number)
Fanny Picard Michael Harrison, Esq. GROUPE DANONE Danone Foods, Inc. 7 rue de Teheran 120 White Plains Road 75381 Paris Cedex 08 Tarrytown, New York 10591 France Telephone: (33-1) 44-35-20-20 Telephone: (914) 366-9700 - ------------------------------------------------------------------------------------------------ (Name, Address and Telephone Number of Persons Authorized to Receive Notices and Communications)
Copy to: John J. Madden, Esq. Shearman & Sterling 599 Lexington Avenue New York, New York 10022 Telephone: (212) 848-4000 October 29, 1999 --------------------------------------------------------- (Date of Event which requires Filing of this Statement) - ------------------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box |_|. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1 of 7 CUSIP No. 531914109 - ------------------------------------------------------------------------------- 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person GROUPE DANONE - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group _ (a) |_| (b) |_| - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) WC - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d)or 2(e). _ |_| - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization France - ------------------------------------------------------------------------------- 7. Sole Voting Power 0 - ---- Number of Shares ------------------------------------------------- Beneficially 8. Owned Shared Voting Power By Each 720,267 - ---- Reporting Person ------------------------------------------------- 9. With Sole Dispositive Power 0 - ---- ------------------------------------------------- 10. Shared Dispositive Power 720,267 - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 720,267 - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) _ |_| - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 16.7% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) HC/CO - ------------------------------------------------------------------------------- 2 of 7 CUSIP No. 531914109 - ------------------------------------------------------------------------------- 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Danone Foods, Inc. - ------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of a Group _ (a) |_| (b) |_| - ------------------------------------------------------------------------------- 3. SEC Use Only - ------------------------------------------------------------------------------- 4. Source of Funds (See Instructions) AF - ------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(e). _ |_| - ------------------------------------------------------------------------------- 6. Citizenship or Place of Organization Delaware - ------------------------------------------------------------------------------- 7. Sole Voting Power 0 - ------- Number of Shares ------------------------------------------------- 8. Beneficially Shared Voting Power Owned By 720,267 - ------- Each ------------------------------------------------- 9. Reporting Person Sole Dispositive Power With 0 - ------- ------------------------------------------------- 10. Shared Dispositive Power 720,267 - ------------------------------------------------------------------------------- 11. Aggregate Amount Beneficially Owned by Each Reporting Person 720,267 - ------------------------------------------------------------------------------- 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) _ |_| - ------------------------------------------------------------------------------- 13. Percent of Class Represented by Amount in Row (11) 16.7% - ------------------------------------------------------------------------------- 14. Type of Reporting Person (See Instructions) CO - ------------------------------------------------------------------------------- 3 of 7 Amendment No. 1 to Schedule 13D GROUPE DANONE, a societe anonyme organized under the laws of the Republic of France and Danone Foods, Inc. ("Danone Foods"), a Delaware corporation, hereby amend and supplement the statement on Schedule 13D (the "Statement") previously filed by GROUPE DANONE and Danone Foods with the Securities and Exchange Commission on October 12, 1999 with respect to the common stock, no par value (the "Lifeway Common Stock") of Lifeway Foods, Inc., an Illinois corporation, with its principal executive offices at 6431 W. Oakton Street, Morton Grove, Illinois 60053 (the "Issuer"). Except as amended and supplemented, the Statement, including the definitions of terms not otherwise defined herein, remains in full force and effect. Item 3. Source and Amount of Funds or Other Consideration On October 21, 1999, Danone Foods entered into a Stock Purchase Agreement with Futro & Associates P.C., a Colorado professional corporation (the "Futro Stock Purchase Agreement"). Pursuant to the Futro Stock Purchase Agreement, on October 21, 1999, Danone Foods acquired 30,000 shares of Lifeway Common Stock directly from Futro & Associates P.C. at a price of U.S. $10.00 per share. The total consideration paid by Danone Foods to acquire the 30,000 shares of Lifeway Common Stock was U.S. $300,000. On October 22, 1999, Danone Foods entered into a Stock Purchase Agreement with Dr. Gulshan Arora (the "Arora Stock Purchase Agreement"). Pursuant to the Arora Stock Purchase Agreement, on October 22, 1999, Danone Foods acquired 21,000 shares of Lifeway Common Stock directly from Dr. Gulshan Arora at a price of U.S. $10.00 per share. The total consideration paid by Danone Foods to acquire the 21,000 shares of Lifeway Common Stock was U.S. $210,000. On October 29, 1999, Danone Foods entered into a Stock Purchase Agreement with Ronald F. Riba and Marcelete C. Riba (the "Riba Stock Purchase Agreement"). Pursuant to the Riba Stock Purchase Agreement, on October 29, 1999, Danone Foods acquired 21,500 shares of Lifeway Common Stock directly from Ronald F. Riba and Marcelete C. Riba at a price of U.S. $10.00 per share. The total consideration paid by Danone Foods to acquire the 21,500 shares of Lifeway Common Stock was U.S. $215,000. GROUPE DANONE provided Danone Foods with funds from internally generated working capital to finance the foregoing acquisitions. 4 of 7 Item 4. Purpose of Transaction Danone Foods has acquired the 72,500 shares of Lifeway Common Stock for the purpose of making an additional equity investment in the Issuer and to complement the development of a commercial relationship with the Issuer. Danone Foods intends to acquire up to an additional 3.3% of the aggregate number of outstanding shares of Lifeway Common Stock through privately negotiated transactions. Item 5. Interest in Securities of the Issuer 1. GROUPE DANONE (a)-(b) Following the acquisition of shares of Lifeway Common Stock pursuant to the Arora Stock Purchase Agreement, Futro Stock Purchase Agreement and Riba Stock Purchase Agreement, GROUPE DANONE beneficially owns and has the shared power to vote and to dispose of 720,267 shares of Lifeway Common Stock, representing 16.7% of the shared voting power of the outstanding shares of Lifeway Common Stock. The calculation of the foregoing percentage is based on the number of shares of Lifeway Common Stock disclosed to Danone Foods by the Issuer as outstanding as of October 1, 1999. Except as set forth herein, to the knowledge of GROUPE DANONE, no director or executive officer of GROUPE DANONE beneficially owns any other shares of Lifeway Common Stock. (c) Except as set forth in the Statement and except as described herein, there have been no transactions by GROUPE DANONE in securities of the Issuer during the past sixty days. Except as set forth herein, to the knowledge of GROUPE DANONE, there have been no transactions by any director or executive officer of GROUPE DANONE in securities of the Issuer during the past sixty days. (d) No one other than GROUPE DANONE and Danone Foods is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Lifeway Common Stock purchased by Danone Foods. (e) Not applicable. 2. Danone Foods, Inc. (a)-(b) Following the acquisition of shares of Lifeway Common Stock pursuant to the Arora Stock Purchase Agreement, Futro Stock Purchase Agreement and Riba Stock Purchase Agreement, Danone Foods beneficially owns and has the shared power to vote and to dispose of 720,267 shares of Lifeway Common Stock, representing 16.7% of the shared voting power of the outstanding shares of Lifeway Common Stock. The calculation of the foregoing percentage is based on the number of shares of Lifeway Common Stock disclosed to Danone Foods by the Issuer as outstanding as of October 1, 1999. Except as set forth herein, to the 5 of 7 knowledge of Danone Foods, no director or executive officer of Danone Foods beneficially owns any other shares of Lifeway Common Stock. (c) Except as set forth in the Statement and except as described herein, there have been no transactions by Danone Foods in securities of the Issuer during the past sixty days. Except as set forth herein, to the knowledge of Danone Foods, there have been no transactions by any director or executive officer of Danone Foods in securities of the Issuer during the past sixty days. (d) No one other than Danone Foods and GROUPE DANONE is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Lifeway Common Stock purchased by Danone Foods. (e) Not applicable. Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to Securities of the Issuer The Futro Stock Purchase Agreement Pursuant to the Futro Stock Purchase Agreement, on October 21, 1999, Danone Foods purchased 30,000 shares of Lifeway Common Stock directly from Futro & Associates, P.C. at a purchase price of U.S. $10.00 per share. The Arora Stock Purchase Agreement Pursuant to the Arora Stock Purchase Agreement, on October 22, 1999, Danone Foods purchased 21,000 shares of Lifeway Common Stock directly from Dr. Gulshan Arora at a purchase price of U.S. $10.00 per share. The Riba Stock Purchase Agreement Pursuant to the Riba Stock Purchase Agreement, on October 29, 1999, Danone Foods purchased 21,500 shares of Lifeway Common Stock directly from Ronald F. Riba and Marcelete C. Riba at a purchase price of U.S. $10.00 per share. The preceding summary of the above agreements is not intended to be complete and is qualified in its entirety by reference to the full text of the Futro Stock Purchase Agreement, the Arora Stock Purchase Agreement and the Riba Stock Purchase Agreement, copies of each of which are filed as an Exhibit hereto and are incorporated herein by reference. 6 of 7 Item 7. Material to be Filed as Exhibits The following Exhibits are filed with this Amendment No. 1: Exhibit 6 Power of Attorney, dated October 12, 1999, granted by GROUPE DANONE authorizing Fanny Picard to sign statements on Schedule 13D and amendments thereto (filed as Exhibit 4 to the Statement and incorporated herein by reference). Exhibit 7 Power of Attorney, dated October 12, 1999, granted by Danone Foods authorizing Fanny Picard to sign statements on Schedule 13D and amendments thereto (filed as Exhibit 5 to the Statement and incorporated herein by reference). Exhibit 8 Stock Purchase Agreement, dated as of October 21, 1999, between Danone Foods and Futro & Associates P.C. Exhibit 9 Stock Purchase Agreement, dated as of October 22, 1999, between Danone Foods and Dr. Gulshan Arora. Exhibit 10 Stock Purchase Agreement, dated as of October 29, 1999, between Danone Foods and Ronald F. Riba and Marcelete C. Riba. 7 of 7 After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: October 29, 1999 GROUPE DANONE By: /s/ Fanny Picard ----------------------------------------- Name: Fanny Picard Title: Attorney-In-Fact After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: October 29, 1999 DANONE FOODS, INC. By: /s/ Fanny Picard ----------------------------------------- Name: Fanny Picard Title: Attorney-In-Fact Exhibit 8 ================================================================================ -------------------------------------- STOCK PURCHASE AGREEMENT -------------------------------------- Between FUTRO & ASSOCIATES, P.C. and DANONE FOODS, INC. Dated as of October 21, 1999 ================================================================================ TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS 1.01. Certain Defined Terms...................................................1 ARTICLE II PURCHASE AND SALE 2.01. Purchase and Sale of the Shares.........................................2 2.02. Purchase Price..........................................................2 2.03. Closing.................................................................3 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER 3.01. Authorization...........................................................3 3.02. Ownership of Shares.....................................................3 3.03. No Conflict.............................................................4 3.04. Absence of Litigation...................................................4 3.05. Brokers.................................................................4 3.06. Disclosure; Access to Information.......................................4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 4.01. Organization and Authority of the Purchaser.............................5 4.02. No Conflict.............................................................5 4.03. Investment Purpose......................................................5 4.04. Brokers.................................................................5 -i- Section Page - ------- ---- ARTICLE V ADDITIONAL AGREEMENTS 5.01. Public Announcements....................................................6 5.02. Further Action..........................................................6 5.03. Investigation...........................................................6 ARTICLE VI CONDITIONS TO CLOSING 6.01. Condition to Obligations of the Seller..................................7 6.02. Conditions to Obligations of the Purchaser..............................7 ARTICLE VII TERMINATION 7.01. Termination.............................................................7 7.02. Effect of Termination...................................................8 ARTICLE VIII GENERAL PROVISIONS 8.01. Waiver..................................................................8 8.02. Expenses................................................................8 8.03. Notices.................................................................8 8.04. Headings...............................................................10 8.05. Severability...........................................................10 8.06. Entire Agreement.......................................................10 8.07. Assignment.............................................................10 8.08. No Third Party Beneficiaries...........................................10 8.09. Amendment..............................................................10 8.10. Governing Law..........................................................10 8.11. Waiver of Jury Trial...................................................10 8.12. Counterparts...........................................................11 8.13. Specific Performance...................................................11 8.14. Survival of Representations and Warranties.............................11 -ii- STOCK PURCHASE AGREEMENT, dated as of October 21, 1999, between Futro & Associates, P.C., a Colorado professional corporation, of 1401 Seventeenth Street, Denver, Colorado (the "Seller") and Danone Foods, Inc., a Delaware corporation (the "Purchaser"). W I T N E S S E T H: WHEREAS, the Seller owns at least 30,000 shares of common stock, no par value per share (the "Common Stock") of Lifeway Foods, Inc., an Illinois corporation (the "Company"); and WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, 30,000 shares of the Common Stock (such shares to be sold pursuant to this Agreement being individually, a "Share" and, collectively, the "Shares"), upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the Purchaser and the Seller hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. "Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. "Business" means the business of manufacturing, marketing and selling cultured, probiotic and functional food products in the health food industry and all other business which prior to the date hereof has been conducted by the Company and the Subsidiaries. "Closing" has the meaning specified in Section 2.03(a). "Closing Date" has the meaning specified in Section 2.03(a). "Common Stock" has the meaning specified in the recitals to this Agreement. "control" (including the terms "controlled by" and "under common control with"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person. "Encumbrance" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Governmental Authority" means any United States federal, state, local, supranational or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. "Law" means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law. "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "Purchase Price" has the meaning specified in Section 2.02. ARTICLE II PURCHASE AND SALE SECTION 2.01. Purchase and Sale of the Shares. Upon the terms and subject to the conditions contained in this Agreement, at the Closing, the Seller shall sell to the Purchaser, and the Purchaser shall purchase from the Seller, 30,000 Shares. SECTION 2.02. Purchase Price. The purchase price shall be $10.00 per Share (the "Purchase Price") payable as provided in Section 2.03(b). 2 SECTION 2.03. Closing. (a) Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated by this Agreement shall take place at a closing (the "Closing") to be held at the offices of Shearman & Sterling at 10:00 A.M., New York time, on such date on or before October 31, 1999 as the Purchaser may determine, or at such other place or at such other time or on such other date as the Seller and the Purchaser may mutually agree upon in writing (the date on which the Closing takes place being the "Closing Date"). (b) ______ At the Closing, (i) the Seller shall deliver or cause to be delivered to the Purchaser stock certificates evidencing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, in form satisfactory to the Purchaser and (ii) the Purchaser shall, at the election of the Seller, (x) deliver to the Seller a certified check in the amount of $300,000, made payable to the order of the Seller or (y) pay to the Seller the amount of $300,000 by wire transfer of immediately available funds to the bank account designated by the Seller. The Seller agrees to provide the Purchaser with notice of such election at least one day prior to the Closing Date. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER As an inducement to the Purchaser to enter into this Agreement, the Seller hereby represents and warrants to the Purchaser as follows: SECTION 3.01. Authorization. The Seller, if it is an individual, has all requisite right, power and authority and full legal capacity to execute and deliver this Agreement, to perform his or her obligations hereunder and to consummate the transactions contemplated hereby. The Seller, if it is a corporation or other legal entity, is duly organized, validly existing and in good standing under the laws of its incorporation or formation and has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Seller, the performance by the Seller of its obligations hereunder and the consummation by the Seller of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Seller. This Agreement has been duly and validly executed and delivered by the Seller, and this Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms. SECTION 3.02. Ownership of Shares. The Seller has good and marketable title to, and is the record and beneficial owner of, the Shares, free and clear of all Encumbrances. Upon delivery of the Shares by the Seller to the Purchaser at the Closing and payment of the Purchase Price for the Shares, as herein provided, the Purchaser will receive good and marketable title to the Shares, free and clear of all Encumbrances. 3 SECTION 3.03. No Conflict. Except as may result from any facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of this Agreement by the Seller do not and will not (a) conflict with or violate any Law or Governmental Order applicable to the Seller or (b) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the Shares pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument, obligation or arrangement to which the Seller is a party or by which any of the Shares are bound or affected or which would have a material adverse effect on the ability of the Seller to consummate the transactions contemplated by this Agreement. SECTION 3.04. Absence of Litigation. There are no Actions by or against the Seller pending before any Governmental Authority (or, to the best knowledge of the Seller after due inquiry, threatened to be brought by or before any Governmental Authority) relating to or affecting the Shares or which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. The Seller is not subject to any Governmental Order (nor, to the best knowledge of the Seller, are there any such Governmental Orders threatened to be imposed by any Governmental Authority) relating to or affecting the Shares or which would affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. SECTION 3.05. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller. SECTION 3.06. Disclosure; Access to Information. The Seller has received and reviewed the materials listed in Schedule A to this Agreement, but has not necessarily relied on all the information contained in such materials. The Seller acknowledges that the materials listed in Schedule A to this Agreement contain certain material non-public information concerning the Company and the Seller agrees to maintain, and to cause its Affiliates to maintain the confidentiality of any and all such material non-public information furnished to the Seller, except with the prior written consent of the Purchaser or as may be required by any Governmental Order. 4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER As an inducement to the Seller to enter into this Agreement, the Purchaser hereby represents and warrants to the Seller as follows: SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Delaware. The Purchaser has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Seller party thereto) constitute legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their terms. SECTION 4.02. No Conflict. Assuming the making and obtaining of all filings, notifications, consents, approvals, authorizations and other actions referred to in Section 4.03, except as may result from any facts or circumstances relating solely to the Seller, the execution, delivery and performance of this Agreement by the Purchaser do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation, by-laws or other similar organizational documents of the Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to the Purchaser or (c) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse or time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation, or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of the Purchaser pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Purchaser is a party or by which any of such assets or properties are bound or affected which, with respect to clauses (b) and (c) above would have a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated by this Agreement. SECTION 4.03. Investment Purpose. The Purchaser is acquiring the Shares solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof. SECTION 4.04. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions 5 contemplated by this Agreement based upon arrangements made by or on behalf of the Purchaser. ARTICLE V ADDITIONAL AGREEMENTS SECTION 5.01. Public Announcements. The Seller shall not make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the Purchaser, and the Seller shall cooperate with the Purchaser as to the timing and contents of any such press release or public announcement. SECTION 5.02. Further Action. Each of the parties hereto shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated hereby. SECTION 5.03. Investigation. (a) The Seller acknowledges and agrees that it (i) has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning, the Company, the Business and the Shares, including with limitation, the value thereof, (ii) has been furnished with or given adequate access to such information as it has requested about the Company, the Business and the Shares and (iii) except as provided in this Agreement, will not assert any claim against the Purchaser, the Company or any of their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, investment bankers or representatives, or hold the Purchaser, the Company or any such Persons liable, for any inaccuracies, misstatements or omissions with respect to information furnished by the Purchaser, the Company or such Persons concerning the Company, the Business or the Shares. (b) In connection with the Seller's investigation of the Company and the Business, the Seller may receive from the Purchaser and the Company, or their respective representatives, certain estimates, projections and other forecasts for the Company and the Business. The Seller acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, forecasts, plans and budgets, that the Seller is familiar with such uncertainties, that it is taking full responsibility for making its own evaluation of, and neither the Purchaser nor the Company shall have any responsibility with respect to, the adequacy and accuracy of any such estimates, projections, forecasts, plans and budgets so furnished to it, and that the Seller will not assert any claim against the Purchaser, the Company or any of their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, investment bankers or representatives, or hold the Purchaser, the Company or any such Persons liable with respect thereto. 6 ARTICLE VI CONDITIONS TO CLOSING SECTION 6.01. Condition to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of the condition that the representations and warranties of the Purchaser contained in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if made as of the Closing Date, and the covenants and agreements contained in this Agreement to be complied with by the Purchaser at or prior to the Closing shall have been complied with in all material respects. SECTION 6.02. Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior the Closing, of the condition that the representations and warranties of the Seller contained in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing Date with the same force and effect as if made as of the Closing Date, the covenants and agreements contained in this Agreement to be complied with by the Seller at or prior to the Closing shall have been complied with in all material respects, and the Purchaser shall have received a certificate signed by the Seller to such effect. ARTICLE VII TERMINATION SECTION 7.01. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by the mutual written consent of the Purchaser and the Seller; (b) by either the Purchaser or the Seller if the Closing shall not have occurred by December 31, 1999; provided, however, that the right to terminate this Agreement under this Section 7.01(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date; (c) by either the Purchaser or the Seller in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this 7 Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or (d) by the Purchaser if, between the date hereof and the time scheduled for the Closing, the Seller makes a general assignment for the benefit of creditors, or any proceeding shall be instituted by or against the Seller seeking to adjudicate it bankrupt or insolvent, or seeking arrangement, adjustment, protection, relief or composition of its debts under any Law relating to bankruptcy, insolvency or reorganization. SECTION 7.02. Effect of Termination. In the event of termination of this Agreement as provided in Section 7.01, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that nothing herein shall relieve any party from liability for any breach of this Agreement. ARTICLE VIII GENERAL PROVISIONS SECTION 8.01. Waiver. The Seller and the Purchaser may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. SECTION 8.02. Expenses. (a) Except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. (b) The Seller will pay any stamp duties, capital duties and taxes payable upon the sale of the Shares. SECTION 8.03. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by telecopy, by telegram, by telex or by registered or certified mail (postage prepaid, return 8 receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.03): (a) if to the Seller: Futro & Associates, P.C. Alamo Plaza 1401 Seventeenth Street Denver, CO 80202 Fax: (303) 295-1563 Attention: Peter G. Futro, Esq. (b) if to the Purchaser: Danone Foods, Inc. 120 White Plains Road Tarrytown, New York 10591 Fax: (914) 366-2865 Attention: General Counsel with a copy to: Groupe Danone 7 rue de Teheran 75381 Paris Cedex 08 Fax: 33-1-44-352-554 Attention: General Counsel and a copy to: Groupe Danone 7 rue de Teheran 75381 Paris Cedex 08 Fax: 33-1-44-352-097 Attention: Director of Corporate Development and Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Telecopy: 212-848-7179 Attention: John J. Madden, Esq. 9 SECTION 8.04. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 8.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. SECTION 8.06. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof and thereof. SECTION 8.07. Assignment. This Agreement may not be assigned by operation of law or otherwise without the express written consent of the Seller and the Purchaser (which consent may be granted or withheld in the sole discretion of the Seller or the Purchaser); provided, however, that the Purchaser may assign this Agreement to an Affiliate of the Purchaser without the consent of the Seller. SECTION 8.08. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. SECTION 8.09. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Seller and the Purchaser or (b) by a waiver in accordance with Section 8.01. SECTION 8.10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. SECTION 8.11. Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect 10 to any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waivers and certifications in this Section 8.11. SECTION 8.12. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. SECTION 8.13. Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in additional to any other remedy at Law or equity. SECTION 8.14. Survival of Representations and Warranties. The representations and warranties of the parties hereto contained in Articles III and IV shall survive the Closing until the second anniversary thereof. 11 IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. FUTRO & ASSOCIATES, P.C. By: /s/ Peter G. Futro ---------------------------- Name: Peter G. Futro Title: President DANONE FOODS, INC. By: /s/ Michael Harrison ---------------------------- Name: Michael Harrison Title: Vice President 12 SCHEDULE A 1. The "Company Profile and Representation" prepared by the Company and dated June 7, 1999; and 2. The "Due Diligence Findings" Report (without attachments), dated June 2, 1999, prepared for and on behalf of the Purchaser. 13 Exhibit 9 ================================================================================ -------------------------------------- STOCK PURCHASE AGREEMENT -------------------------------------- Between GULSHAN ARORA and DANONE FOODS, INC. Dated as of October 22, 1999 ================================================================================ TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS 1.01. Certain Defined Terms..................................................1 ARTICLE II PURCHASE AND SALE 2.01. Purchase and Sale of the Shares........................................2 2.02. Purchase Price.........................................................2 2.03. Closing................................................................3 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER 3.01. Authorization..........................................................3 3.02. Ownership of Shares....................................................3 3.03. No Conflict............................................................4 3.04. Absence of Litigation..................................................4 3.05. Brokers................................................................4 3.06. Disclosure; Access to Information......................................4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 4.01. Organization and Authority of the Purchaser............................5 4.02. No Conflict............................................................5 4.03. Investment Purpose.....................................................5 4.04. Brokers................................................................5 -i- Section Page - ------- ---- ARTICLE V ADDITIONAL AGREEMENTS 5.01. Public Announcements...................................................6 5.02. Further Action.........................................................6 5.03. Investigation..........................................................6 ARTICLE VI CONDITIONS TO CLOSING 6.01. Condition to Obligations of the Seller.................................7 6.02. Conditions to Obligations of the Purchaser.............................7 ARTICLE VII TERMINATION 7.01. Termination............................................................7 7.02. Effect of Termination..................................................8 ARTICLE VIII GENERAL PROVISIONS 8.01. Waiver.................................................................8 8.02. Expenses...............................................................8 8.03. Notices................................................................8 8.04. Headings..............................................................10 8.05. Severability..........................................................10 8.06. Entire Agreement......................................................10 8.07. Assignment............................................................10 8.08. No Third Party Beneficiaries..........................................10 8.09. Amendment.............................................................10 8.10. Governing Law.........................................................10 8.11. Waiver of Jury Trial..................................................10 8.12. Counterparts..........................................................11 8.13. Specific Performance..................................................11 8.14. Survival of Representations and Warranties............................11 -ii- STOCK PURCHASE AGREEMENT, dated as of October 22, 1999, between Gulshan Arora, of 1547 Leonardo da Vinci, Beloeil, Quebec, Canada (the "Seller") and Danone Foods, Inc., a Delaware corporation (the "Purchaser"). W I T N E S S E T H: WHEREAS, the Seller owns at least 21,000 shares of common stock, no par value per share (the "Common Stock") of Lifeway Foods, Inc., an Illinois corporation (the "Company"); and WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, 21,000 shares of the Common Stock (such shares to be sold pursuant to this Agreement being individually, a "Share" and, collectively, the "Shares"), upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the Purchaser and the Seller hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. "Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. "Business" means the business of manufacturing, marketing and selling cultured, probiotic and functional food products in the health food industry and all other business which prior to the date hereof has been conducted by the Company and the Subsidiaries. "Closing" has the meaning specified in Section 2.03(a). "Closing Date" has the meaning specified in Section 2.03(a). "Common Stock" has the meaning specified in the recitals to this Agreement. 1 "control" (including the terms "controlled by" and "under common control with"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person. "Encumbrance" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Governmental Authority" means any United States federal, state, local, supranational or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. "Law" means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law. "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "Purchase Price" has the meaning specified in Section 2.02. ARTICLE II PURCHASE AND SALE SECTION 2.01. Purchase and Sale of the Shares. Upon the terms and subject to the conditions contained in this Agreement, at the Closing, the Seller shall sell to the Purchaser, and the Purchaser shall purchase from the Seller, 21,000 Shares. SECTION 2.02. Purchase Price. The purchase price shall be $10.00 per Share (the "Purchase Price") payable as provided in Section 2.03(b). 2 SECTION 2.03. Closing. (a) Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated by this Agreement shall take place at a closing (the "Closing") to be held at the offices of Shearman & Sterling at 10:00 A.M., New York time, on such date on or before October 31, 1999 as the Purchaser may determine, or at such other place or at such other time or on such other date as the Seller and the Purchaser may mutually agree upon in writing (the date on which the Closing takes place being the "Closing Date"). (b) At the Closing, (i) the Seller shall deliver or cause to be delivered to the Purchaser stock certificates evidencing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, in form satisfactory to the Purchaser and (ii) the Purchaser shall, at the election of the Seller, (x) deliver to the Seller a certified check in the amount of $210,000, made payable to the order of the Seller or (y) pay to the Seller the amount of $210,000 by wire transfer of immediately available funds to the bank account designated by the Seller. The Seller agrees to provide the Purchaser with notice of such election at least one day prior to the Closing Date. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER As an inducement to the Purchaser to enter into this Agreement, the Seller hereby represents and warrants to the Purchaser as follows: SECTION 3.01. Authorization. The Seller, if it is an individual, has all requisite right, power and authority and full legal capacity to execute and deliver this Agreement, to perform his or her obligations hereunder and to consummate the transactions contemplated hereby. The Seller, if it is a corporation or other legal entity, is duly organized, validly existing and in good standing under the laws of its incorporation or formation and has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Seller, the performance by the Seller of its obligations hereunder and the consummation by the Seller of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Seller. This Agreement has been duly and validly executed and delivered by the Seller, and this Agreement constitutes a legal, valid and binding obligation of the Seller enforceable against the Seller in accordance with its terms. SECTION 3.02. Ownership of Shares. The Seller has good and marketable title to, and is the record and beneficial owner of, the Shares, free and clear of all Encumbrances. Upon delivery of the Shares by the Seller to the Purchaser at the Closing and payment of the Purchase Price for the Shares, as herein provided, the Purchaser will receive good and marketable title to the Shares, free and clear of all Encumbrances. 3 SECTION 3.03. No Conflict. Except as may result from any facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of this Agreement by the Seller do not and will not (a) conflict with or violate any Law or Governmental Order applicable to the Seller or (b) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the Shares pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument, obligation or arrangement to which the Seller is a party or by which any of the Shares are bound or affected or which would have a material adverse effect on the ability of the Seller to consummate the transactions contemplated by this Agreement. SECTION 3.04. Absence of Litigation. There are no Actions by or against the Seller pending before any Governmental Authority (or, to the best knowledge of the Seller after due inquiry, threatened to be brought by or before any Governmental Authority) relating to or affecting the Shares or which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. The Seller is not subject to any Governmental Order (nor, to the best knowledge of the Seller, are there any such Governmental Orders threatened to be imposed by any Governmental Authority) relating to or affecting the Shares or which would affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. SECTION 3.05. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller. SECTION 3.06. Disclosure; Access to Information. The Seller has received and reviewed the materials listed in Schedule A to this Agreement, but has not necessarily relied on all the information contained in such materials. The Seller acknowledges that the materials listed in Schedule A to this Agreement contain certain material non-public information concerning the Company and the Seller agrees to maintain, and to cause its Affiliates to maintain the confidentiality of any and all such material non-public information furnished to the Seller, except with the prior written consent of the Purchaser or as may be required by any Governmental Order. 4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER As an inducement to the Seller to enter into this Agreement, the Purchaser hereby represents and warrants to the Seller as follows: SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Delaware. The Purchaser has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Seller party thereto) constitute legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their terms. SECTION 4.02. No Conflict. Except as may result from any facts or circumstances relating solely to the Seller, the execution, delivery and performance of this Agreement by the Purchaser do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation, by-laws or other similar organizational documents of the Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to the Purchaser or (c) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse or time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation, or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of the Purchaser pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Purchaser is a party or by which any of such assets or properties are bound or affected which, with respect to clauses (b) and (c) above would have a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated by this Agreement. SECTION 4.03. Investment Purpose. The Purchaser is acquiring the Shares solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof. SECTION 4.04. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Purchaser. 5 ARTICLE V ADDITIONAL AGREEMENTS SECTION 5.01. Public Announcements. The Seller shall not make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the Purchaser, and the Seller shall cooperate with the Purchaser as to the timing and contents of any such press release or public announcement. SECTION 5.02. Further Action. Each of the parties hereto shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated hereby. SECTION 5.03. Investigation. (a) The Seller acknowledges and agrees that it (i) has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning, the Company, the Business and the Shares, including with limitation, the value thereof, (ii) has been furnished with or given adequate access to such information as it has requested about the Company, the Business and the Shares and (iii) except as provided in this Agreement, will not assert any claim against the Purchaser, the Company or any of their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, investment bankers or representatives, or hold the Purchaser, the Company or any such Persons liable, for any inaccuracies, misstatements or omissions with respect to information furnished by the Purchaser, the Company or such Persons concerning the Company, the Business or the Shares. (b) In connection with the Seller's investigation of the Company and the Business, the Seller may receive from the Purchaser and the Company, or their respective representatives, certain estimates, projections and other forecasts for the Company and the Business. The Seller acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, forecasts, plans and budgets, that the Seller is familiar with such uncertainties, that it is taking full responsibility for making its own evaluation of, and neither the Purchaser nor the Company shall have any responsibility with respect to, the adequacy and accuracy of any such estimates, projections, forecasts, plans and budgets so furnished to it, and that the Seller will not assert any claim against the Purchaser, the Company or any of their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, investment bankers or representatives, or hold the Purchaser, the Company or any such Persons liable with respect thereto. ARTICLE VI CONDITIONS TO CLOSING 6 SECTION 6.01. Condition to Obligations of the Seller. The obligations of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of the condition that the representations and warranties of the Purchaser contained in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if made as of the Closing Date, and the covenants and agreements contained in this Agreement to be complied with by the Purchaser at or prior to the Closing shall have been complied with in all material respects. SECTION 6.02. Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior the Closing, of the condition that the representations and warranties of the Seller contained in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing Date with the same force and effect as if made as of the Closing Date, the covenants and agreements contained in this Agreement to be complied with by the Seller at or prior to the Closing shall have been complied with in all material respects, and the Purchaser shall have received a certificate signed by the Seller to such effect. ARTICLE VII TERMINATION SECTION 7.01. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by the mutual written consent of the Purchaser and the Seller; (b) by either the Purchaser or the Seller if the Closing shall not have occurred by December 31, 1999; provided, however, that the right to terminate this Agreement under this Section 7.01(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date; (c) by either the Purchaser or the Seller in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or 7 (d) by the Purchaser if, between the date hereof and the time scheduled for the Closing, the Seller makes a general assignment for the benefit of creditors, or any proceeding shall be instituted by or against the Seller seeking to adjudicate it bankrupt or insolvent, or seeking arrangement, adjustment, protection, relief or composition of its debts under any Law relating to bankruptcy, insolvency or reorganization. SECTION 7.02. Effect of Termination. In the event of termination of this Agreement as provided in Section 7.01, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that nothing herein shall relieve any party from liability for any breach of this Agreement. ARTICLE VIII GENERAL PROVISIONS SECTION 8.01. Waiver. The Seller and the Purchaser may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. SECTION 8.02. Expenses. (a) Except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. (b) The Seller will pay any stamp duties, capital duties and taxes payable upon the sale of the Shares. SECTION 8.03. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by telecopy, by telegram, by telex or by registered or certified mail (postage prepaid, return receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.03): 8 (a) if to the Seller: 1547 Leonardo da Vinci Beloeil, QC J3G4Y9 Canada Fax: (450) 464-9557 Attention: Dr. Gulshan Arora (b) if to the Purchaser: Danone Foods, Inc. 120 White Plains Road Tarrytown, New York 10591 Fax: (914) 366-2865 Attention: General Counsel with a copy to: Groupe Danone 7 rue de Teheran 75381 Paris Cedex 08 Fax: 33-1-44-352-554 Attention: General Counsel and a copy to: Groupe Danone 7 rue de Teheran 75381 Paris Cedex 08 Fax: 33-1-44-352-097 Attention: Director of Corporate Development and Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Telecopy: 212-848-7179 Attention: John J. Madden, Esq. 9 SECTION 8.04. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 8.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. SECTION 8.06. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof and thereof. SECTION 8.07. Assignment. This Agreement may not be assigned by operation of law or otherwise without the express written consent of the Seller and the Purchaser (which consent may be granted or withheld in the sole discretion of the Seller or the Purchaser); provided, however, that the Purchaser may assign this Agreement to an Affiliate of the Purchaser without the consent of the Seller. SECTION 8.08. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. SECTION 8.09. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Seller and the Purchaser or (b) by a waiver in accordance with Section 8.01. SECTION 8.10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. SECTION 8.11. Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party 10 has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waivers and certifications in this Section 8.11. SECTION 8.12. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. SECTION 8.13. Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in additional to any other remedy at Law or equity. SECTION 8.14. Survival of Representations and Warranties. The representations and warranties of the parties hereto contained in Articles III and IV shall survive the Closing until the second anniversary thereof. 11 IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. By: /s/ Gulshan Arora ---------------------------------- Name: Dr. Gulshan Arora DANONE FOODS, INC. By: /s/ Michael Harrison ---------------------------------- Name: Michael Harrison Title: Vice President 12 SCHEDULE A 1. The "Company Profile and Representation" prepared by the Company and dated June 7, 1999; and 2. The "Due Diligence Findings" Report (without attachments), dated June 2, 1999, prepared for and on behalf of the Purchaser. 13 Exhibit 10 -------------------------------------- STOCK PURCHASE AGREEMENT -------------------------------------- Between RONALD F. RIBA, MARCELETE C. RIBA and DANONE FOODS, INC. Dated as of October 29, 1999 TABLE OF CONTENTS Section Page - ------- ---- ARTICLE I DEFINITIONS 1.01. Certain Defined Terms...................................................1 ARTICLE II PURCHASE AND SALE 2.01. Purchase and Sale of the Shares.........................................2 2.02. Purchase Price..........................................................2 2.03. Closing.................................................................3 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER 3.01. Authorization...........................................................3 3.02. Ownership of Shares.....................................................3 3.03. No Conflict.............................................................4 3.04. Absence of Litigation...................................................4 3.05. Brokers.................................................................4 3.06. Disclosure; Access to Information.......................................4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER 4.01. Organization and Authority of the Purchaser.............................5 4.02. No Conflict.............................................................5 4.03. Investment Purpose......................................................5 4.04. Brokers.................................................................5 -i- Section Page - ------- ---- ARTICLE V ADDITIONAL AGREEMENTS 5.01. Public Announcements....................................................6 5.02. Further Action..........................................................6 5.03. Investigation...........................................................6 ARTICLE VI CONDITIONS TO CLOSING 6.01. Condition to Obligations of the Seller..................................7 6.02. Conditions to Obligations of the Purchaser..............................7 ARTICLE VII TERMINATION 7.01. Termination.............................................................7 7.02. Effect of Termination...................................................8 ARTICLE VIII GENERAL PROVISIONS 8.01. Waiver..................................................................8 8.02. Expenses................................................................8 8.03. Notices.................................................................8 8.04. Headings...............................................................10 8.05. Severability...........................................................10 8.06. Entire Agreement.......................................................10 8.07. Assignment.............................................................10 8.08. No Third Party Beneficiaries...........................................10 8.09. Amendment..............................................................10 8.10. Governing Law..........................................................10 8.11. Waiver of Jury Trial...................................................10 8.12. Counterparts...........................................................11 8.13. Specific Performance...................................................11 8.14. Survival of Representations and Warranties.............................11 -ii- STOCK PURCHASE AGREEMENT, dated as of October 29, 1999, between Ronald F. Riba and Marcelete C. Riba, both of 16 West Canterbury Drive, Arlington Heights, Illinois (each a "Seller", and collectively, the "Sellers") and Danone Foods, Inc., a Delaware corporation (the "Purchaser"). W I T N E S S E T H: WHEREAS, the Sellers own at least 21,500 shares of common stock, no par value per share (the "Common Stock") of Lifeway Foods, Inc., an Illinois corporation (the "Company"); and WHEREAS, the Sellers wish to sell to the Purchaser, and the Purchaser wishes to purchase from the Sellers, 21,500 shares of the Common Stock (such shares to be sold pursuant to this Agreement being individually, a "Share" and, collectively, the "Shares"), upon the terms and subject to the conditions set forth herein. NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, the Purchaser and the Sellers hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Action" means any claim, action, suit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority. "Affiliate" means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. "Business" means the business of manufacturing, marketing and selling cultured, probiotic and functional food products in the health food industry and all other business which prior to the date hereof has been conducted by the Company and the Subsidiaries. "Closing" has the meaning specified in Section 2.03(a). "Closing Date" has the meaning specified in Section 2.03(a). "Common Stock" has the meaning specified in the recitals to this Agreement. "control" (including the terms "controlled by" and "under common control with"), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person. "Encumbrance" means any security interest, pledge, mortgage, lien (including, without limitation, environmental and tax liens), charge, encumbrance, adverse claim, preferential arrangement or restriction of any kind, including, without limitation, any restriction on the use, voting, transfer, receipt of income or other exercise of any attributes of ownership. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Governmental Authority" means any United States federal, state, local, supranational or any foreign government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal, or judicial or arbitral body. "Governmental Order" means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority. "Law" means any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law. "Person" means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. "Purchase Price" has the meaning specified in Section 2.02. ARTICLE II PURCHASE AND SALE SECTION 2.01. Purchase and Sale of the Shares. Upon the terms and subject to the conditions contained in this Agreement, at the Closing, the Sellers shall sell to the Purchaser, and the Purchaser shall purchase from the Sellers, 21,500 Shares. SECTION 2.02. Purchase Price. The purchase price shall be $10.00 per Share (the "Purchase Price") payable as provided in Section 2.03(b). 2 SECTION 2.03. Closing. (a) Subject to the terms and conditions of this Agreement, the sale and purchase of the Shares contemplated by this Agreement shall take place at a closing (the "Closing") to be held at the offices of Shearman & Sterling at 10:00 A.M., New York time, on such date on or before October 31, 1999 as the Purchaser may determine, or at such other place or at such other time or on such other date as the Sellers and the Purchaser may mutually agree upon in writing (the date on which the Closing takes place being the "Closing Date"). (b) At the Closing, (i) the Sellers shall deliver or cause to be delivered to the Purchaser stock certificates evidencing the Shares duly endorsed in blank, or accompanied by stock powers duly executed in blank, in form satisfactory to the Purchaser and (ii) the Purchaser shall, at the election of the Sellers, (x) deliver to the Sellers a certified check in the amount of $195,000, made payable to the order of Ronald F. Riba and a certified check in the amount of $20,000, made payable to the order of Marcelete C. Riba or (y) pay to the Sellers the amount of $215,000 by wire transfer of immediately available funds to the bank accounts designated by the Sellers. The Sellers agree to provide the Purchaser with notice of such election at least one day prior to the Closing Date. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER As an inducement to the Purchaser to enter into this Agreement, each of the Sellers hereby, severally but not jointly, represent and warrant to the Purchaser as follows: SECTION 3.01. Authorization. Each Seller, if it is an individual, has all requisite right, power and authority and full legal capacity to execute and deliver this Agreement, to perform his or her obligations hereunder and to consummate the transactions contemplated hereby. Each Seller, if it is a corporation or other legal entity, is duly organized, validly existing and in good standing under the laws of its incorporation or formation and has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by such Seller, the performance by such Seller of its obligations hereunder and the consummation by such Seller of the transactions contemplated hereby have been duly authorized by all requisite action on the part of such Seller. This Agreement has been duly and validly executed and delivered by each Seller, and this Agreement constitutes a legal, valid and binding obligation of such Seller enforceable against such Seller in accordance with its terms. SECTION 3.02. Ownership of Shares. Each Seller has good and marketable title to, and is the record and beneficial owner of, the number of Shares set forth next to such Seller's name in Schedule B to this Agreement, free and clear of all Encumbrances. Upon delivery of the Shares by the Sellers to the Purchaser at the Closing and payment of the Purchase Price for the 3 Shares, as herein provided, the Purchaser will receive good and marketable title to the Shares, free and clear of all Encumbrances. SECTION 3.03. No Conflict. Except as may result from any facts or circumstances relating solely to the Purchaser, the execution, delivery and performance of this Agreement by each Seller do not and will not (a) conflict with or violate any Law or Governmental Order applicable to such Seller or (b) conflict with, result in any breach of, constitute a default (or event which with the giving of notice or lapse of time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation or cancellation of, or result in the creation of any Encumbrance on any of the Shares pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument, obligation or arrangement to which such Seller is a party or by which any of the Shares are bound or affected or which would have a material adverse effect on the ability of such Seller to consummate the transactions contemplated by this Agreement. SECTION 3.04. Absence of Litigation. There are no Actions by or against any Seller pending before any Governmental Authority (or, to the best knowledge of such Seller after due inquiry, threatened to be brought by or before any Governmental Authority) relating to or affecting the Shares or which could affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. Each Seller is not subject to any Governmental Order (nor, to the best knowledge of each Seller, are there any such Governmental Orders threatened to be imposed by any Governmental Authority) relating to or affecting the Shares or which would affect the legality, validity or enforceability of this Agreement or the consummation of the transactions contemplated hereby. SECTION 3.05. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of each Seller. SECTION 3.06. Disclosure; Access to Information. Each Seller has received and reviewed the materials listed in Schedule A to this Agreement, but has not necessarily relied on all the information contained in such materials. Each Seller acknowledges that the materials listed in Schedule A to this Agreement contain certain material non-public information concerning the Company and each Seller agrees to maintain, and to cause its Affiliates to maintain the confidentiality of any and all such material non-public information furnished to each Seller, except with the prior written consent of the Purchaser or as may be required by any Governmental Order. 4 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER As an inducement to the Sellers to enter into this Agreement, the Purchaser hereby represents and warrants to the Sellers as follows: SECTION 4.01. Organization and Authority of the Purchaser. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws of Delaware. The Purchaser has all necessary corporate power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Purchaser, the performance by the Purchaser of its obligations hereunder and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Purchaser. This Agreement has been duly executed and delivered by the Purchaser, and (assuming due authorization, execution and delivery by the Sellers thereto) constitute legal, valid and binding obligations of the Purchaser enforceable against the Purchaser in accordance with their terms. SECTION 4.02. No Conflict. Except as may result from any facts or circumstances relating solely to any Seller, the execution, delivery and performance of this Agreement by the Purchaser do not and will not (a) violate, conflict with or result in the breach of any provision of the certificate of incorporation, by-laws or other similar organizational documents of the Purchaser, (b) conflict with or violate any Law or Governmental Order applicable to the Purchaser or (c) conflict with, or result in any breach of, constitute a default (or event which with the giving of notice or lapse or time, or both, would become a default) under, require any consent under, or give to others any rights of termination, amendment, acceleration, suspension, revocation, or cancellation of, or result in the creation of any Encumbrance on any of the assets or properties of the Purchaser pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease, sublease, license, permit, franchise or other instrument or arrangement to which the Purchaser is a party or by which any of such assets or properties are bound or affected which, with respect to clauses (b) and (c) above would have a material adverse effect on the ability of the Purchaser to consummate the transactions contemplated by this Agreement. SECTION 4.03. Investment Purpose. The Purchaser is acquiring the Shares solely for the purpose of investment and not with a view to, or for offer or sale in connection with, any distribution thereof. SECTION 4.04. Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Purchaser. 5 ARTICLE V ADDITIONAL AGREEMENTS SECTION 5.01. Public Announcements. The Sellers shall not make, or cause to be made, any press release or public announcement in respect of this Agreement or the transactions contemplated hereby or otherwise communicate with any news media without the prior written consent of the Purchaser, and the Sellers shall cooperate with the Purchaser as to the timing and contents of any such press release or public announcement. SECTION 5.02. Further Action. Each of the parties hereto shall use all reasonable efforts to take, or cause to be taken, all appropriate action, do or cause to be done all things necessary, proper or advisable under applicable Law, and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated hereby. SECTION 5.03. Investigation. (a) Each Seller acknowledges and agrees that it (i) has made its own inquiry and investigation into, and, based thereon, has formed an independent judgment concerning, the Company, the Business and the Shares, including with limitation, the value thereof, (ii) has been furnished with or given adequate access to such information as it has requested about the Company, the Business and the Shares and (iii) except as provided in this Agreement, will not assert any claim against the Purchaser, the Company or any of their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, investment bankers or representatives, or hold the Purchaser, the Company or any such Persons liable, for any inaccuracies, misstatements or omissions with respect to information furnished by the Purchaser, the Company or such Persons concerning the Company, the Business or the Shares. (b) In connection with each Seller's investigation of the Company and the Business, each Seller may receive from the Purchaser and the Company, or their respective representatives, certain estimates, projections and other forecasts for the Company and the Business. Each Seller acknowledges that there are uncertainties inherent in attempting to make such estimates, projections, forecasts, plans and budgets, that such Seller is familiar with such uncertainties, that it is taking full responsibility for making its own evaluation of, and neither the Purchaser nor the Company shall have any responsibility with respect to, the adequacy and accuracy of any such estimates, projections, forecasts, plans and budgets so furnished to it, and that such Seller will not assert any claim against the Purchaser, the Company or any of their respective directors, officers, employees, agents, stockholders, Affiliates, consultants, investment bankers or representatives, or hold the Purchaser, the Company or any such Persons liable with respect thereto. 6 ARTICLE VI CONDITIONS TO CLOSING SECTION 6.01. Condition to Obligations of the Seller. The obligations of each Seller to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of the condition that the representations and warranties of the Purchaser contained in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing Date, with the same force and effect as if made as of the Closing Date, and the covenants and agreements contained in this Agreement to be complied with by the Purchaser at or prior to the Closing shall have been complied with in all material respects. SECTION 6.02. Conditions to Obligations of the Purchaser. The obligations of the Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment, at or prior the Closing, of the condition that the representations and warranties of the Sellers contained in this Agreement shall have been true and correct when made and shall be true and correct in all material respects as of the Closing Date with the same force and effect as if made as of the Closing Date, the covenants and agreements contained in this Agreement to be complied with by the Sellers at or prior to the Closing shall have been complied with in all material respects, and the Purchaser shall have received a certificate signed by each Seller to such effect. ARTICLE VII TERMINATION SECTION 7.01. Termination. This Agreement may be terminated at any time prior to the Closing: (a) by the mutual written consent of the Purchaser and the Sellers; (b) by either the Purchaser or the Sellers if the Closing shall not have occurred by December 31, 1999; provided, however, that the right to terminate this Agreement under this Section 7.01(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date; (c) by either the Purchaser or the Sellers in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions contemplated by this 7 Agreement and such order, decree, ruling or other action shall have become final and nonappealable; or (d) by the Purchaser if, between the date hereof and the time scheduled for the Closing, any Seller makes a general assignment for the benefit of creditors, or any proceeding shall be instituted by or against any Seller seeking to adjudicate it bankrupt or insolvent, or seeking arrangement, adjustment, protection, relief or composition of its debts under any Law relating to bankruptcy, insolvency or reorganization. SECTION 7.02. Effect of Termination. In the event of termination of this Agreement as provided in Section 7.01, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that nothing herein shall relieve any party from liability for any breach of this Agreement. ARTICLE VIII GENERAL PROVISIONS SECTION 8.01. Waiver. The Sellers and the Purchaser may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained herein or in any document delivered by the other party pursuant hereto or (c) waive compliance with any of the agreements or conditions of the other party contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition, of this Agreement. The failure of any party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. SECTION 8.02. Expenses. (a) Except as otherwise specified in this Agreement, all costs and expenses, including, without limitation, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. (b) The Sellers will pay any stamp duties, capital duties and taxes payable upon the sale of the Shares. SECTION 8.03. Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by courier service, by cable, by telecopy, by telegram, by telex or by registered or certified mail (postage prepaid, return 8 receipt requested) to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this Section 8.03): (a) if to the Sellers: 16 West Canterbury Drive Arlington Heights, Illinois 60004 Attention: Ronald F. Riba Marcelete C. Riba (b) if to the Purchaser: Danone Foods, Inc. 120 White Plains Road Tarrytown, New York 10591 Fax: (914) 366-2865 Attention: General Counsel with a copy to: Groupe Danone 7 rue de Teheran 75381 Paris Cedex 08 Fax: 33-1-44-352-554 Attention: General Counsel and a copy to: Groupe Danone 7 rue de Teheran 75381 Paris Cedex 08 Fax: 33-1-44-352-097 Attention: Director of Corporate Development and Shearman & Sterling 599 Lexington Avenue New York, NY 10022 Telecopy: 212-848-7179 Attention: John J. Madden, Esq. 9 SECTION 8.04. Headings. The descriptive headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. SECTION 8.05. Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any Law or public policy, all other terms and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby are consummated as originally contemplated to the greatest extent possible. SECTION 8.06. Entire Agreement. This Agreement constitutes the entire agreement of the parties hereto with respect to the subject matter hereof and thereof and supersedes all prior agreements and undertakings, both written and oral, among the parties hereto with respect to the subject matter hereof and thereof. SECTION 8.07. Assignment. This Agreement may not be assigned by operation of law or otherwise without the express written consent of the Sellers and the Purchaser (which consent may be granted or withheld in the sole discretion of the Sellers or the Purchaser); provided, however, that the Purchaser may assign this Agreement to an Affiliate of the Purchaser without the consent of the Sellers. SECTION 8.08. No Third Party Beneficiaries. This Agreement shall be binding upon and inure solely to the benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. SECTION 8.09. Amendment. This Agreement may not be amended or modified except (a) by an instrument in writing signed by, or on behalf of, the Sellers and the Purchaser or (b) by a waiver in accordance with Section 8.01. SECTION 8.10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to its principles or rules of conflict of laws to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. SECTION 8.11. Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party 10 has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other parties hereto have been induced to enter into this Agreement, by, among other things, the mutual waivers and certifications in this Section 8.11. SECTION 8.12. Counterparts. This Agreement may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. SECTION 8.13. Specific Performance. The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms hereof and that the parties shall be entitled to specific performance of the terms hereof, in additional to any other remedy at Law or equity. SECTION 8.14. Survival of Representations and Warranties. The representations and warranties of the parties hereto contained in Articles III and IV shall survive the Closing until the second anniversary thereof. 11 IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized. By: /s/ Ronald F. Riba ------------------------------------------ Name: Ronald F. Riba By: /s/ Marcelete C. Riba ------------------------------------------ Name: Marcelete C. Riba DANONE FOODS, INC. By: /s/ Michael Harrison ------------------------------------------ Name: Michael Harrison Title: Vice President SCHEDULE A 1. The "Company Profile and Representation" prepared by the Company and dated June 7, 1999; and 2. The "Due Diligence Findings" Report (without attachments), dated June 2, 1999, prepared for and on behalf of the Purchaser. 13 SCHEDULE B Name: Shares: - ---- ------ Ronald R. Riba 19,500 Marcelete C. Riba 2,000 14 -----END PRIVACY-ENHANCED MESSAGE-----