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<SEC-DOCUMENT>0001072613-04-001884.txt : 20041018
<SEC-HEADER>0001072613-04-001884.hdr.sgml : 20041018
<ACCEPTANCE-DATETIME>20041018171453
ACCESSION NUMBER:		0001072613-04-001884
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20041001
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041018
DATE AS OF CHANGE:		20041018

FILER:

	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:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-17363
		FILM NUMBER:		041083746

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>form8-k_13004.txt
<DESCRIPTION>FORM 8-K DATED OCTOBER 1, 2004
<TEXT>
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT



     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported): October 1, 2004



                               LIFEWAY FOODS, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           ILLINOIS                     0-17363                 36-3442829
- ----------------------------    ------------------------     ----------------
(State or other jurisdiction    (Commission File Number)     (I.R.S. Employer
      of incorporation)                                     Identification No.)


                              6431 West Oakton St.
                             Morton Grove, IL 60053
               --------------------------------------------------
               (Address of principal executive offices, zip code)


       Registrant's telephone number, including area code: (847) 967-1010



                                       N/A
          -------------------------------------------------------------
          (Former name or former address, if changed since last report)

================================================================================
<PAGE>

                               LIFEWAY FOODS, INC.

ITEM 1.01.  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On October 1, 2004, Lifeway Foods, Inc. ("Lifeway") and Danone Foods, Inc.
("Danone") entered into an Extension of Stockholders' Agreement dated as of
September 28, 2004 (the "Extension"). The Extension is an amendment to that
certain Stockholders' Agreement dated as of October 1, 1999 between Lifeway,
Danone, Michael Smolyansky, Ludmila Smolyansky, Julie Smolyansky and Edward
Smolyansky, as amended on December 24, 1999 .previously disclosed as Exhibit No.
10.11 to the Current Report on Form 8-K filed by Lifeway on October 12, 1999
(the "Stockholders Agreement"). Under the Stockholders' Agreement, Danone has
the right to nominate one Lifeway director, anti-dilutive rights relating to
future offerings of securities by Lifeway, limited registration rights. The
Stockholders' Agreement also provides that neither Lifeway nor Danone would
compete with each other for a period of five years with respect to certain dairy
products (the "Noncompetition Provision") and that Danone may not own more than
20% of the outstanding common stock of Lifeway as a result of direct or indirect
acquisition of shares for a period of five years (the "Standstill Provision").
Danone's interest as of the date hereof is approximately 20.4% due to reductions
in Lifeway's shares outstanding, primarily due to share repurchases.

The terms of the Noncompetition and Standstill Provisions of the Stockholders'
Agreement were due to expire on October 1, 2004. The Extension amends the
Stockholders' Agreement to extend the terms of the Noncompetition Provision and
of the Standstill Provision through October 29, 2004. During the term of the
Extension, Lifeway and Danone intend to discuss the possibility of a further
extension to these provisions as well as potential other amendments to the
Stockholders' Agreement.


ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

    (c)     Exhibits. The following exhibits are filed with this report:

            Exhibit 10.1   Extension of Stockholders' Agreement dated as of
                           September 28, 2004 between Lifeway Foods, Inc. and
                           Danone Foods, Inc.




<PAGE>

                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.

     Dated: October 18, 2004

                                   LIFEWAY FOODS, INC.


                                   By: /s/ Julie Smolyansky
                                       -----------------------------------
                                       Julie Smolyansky
                                       Chief Executive Officer, Chief Financial
                                       and Accounting Officer, President,
                                       Treasurer and Director
























</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit10_13004.txt
<DESCRIPTION>EXTENSION OF STOCKHOLDERS' AGREEMENT
<TEXT>
                                                                    EXHIBIT 10.1
                                                                    ------------

EXTENSION OF STOCKHOLDERS' AGREEMENT DATED AS OF SEPTEMBER 28, 2004 BETWEEN
LIFEWAY FOODS, INC. AND DANONE FOODS, INC.


                                    EXTENSION
                                       TO
                             STOCKHOLDERS' AGREEMENT


     This EXTENSION TO STOCKHOLDERS' AGREEMENT (the "Extension") is hereby
entered into as of the 28th day of September, 2004 by and among Lifeway Foods,
Inc., an Illinois corporation (the "Company"), Danone Foods, Inc., a Delaware
corporation (the "Stockholder"), and the other persons who are parties (the
"Holders") to that certain Stockholders' Agreement by and among the Company, the
Stockholder, and the Holders dated as of October 1, 1999, as amended on December
24, 1999 (collectively, the "Agreement"). Unless otherwise defined herein, all
capitalized terms used herein shall have the same meaning ascribed to those
terms in the Agreement.

     WHEREAS, the Standstill Period and the operative period of Section 6.02 of
the Agreement shall expire on October 1, 2004;

     WHEREAS, each of the parties to the Agreement desires to amend the
Agreement to extend the Standstill Period and the operative period of Section
6.02 of the Agreement as more fully provided in this Extension; and

     WHEREAS, pursuant to Section 7.01 of the Agreement, the time for the
performance of any obligations under the Agreement may be extended by an
instrument in writing signed by the parties to be bound thereby.

     NOW, THEREFORE, in consideration of the entry of the parties into this
Extension and for other good and valuable consideration, the receipt of which is
acknowledged herein, the parties hereto agree as follows:

     1. Extension of Standstill Period. The Standstill Period shall be extended
to include any time during the period beginning on October 1, 1999 and ending at
the close of business on October 29, 2004 and during which the Stockholder
Beneficially Owns 10% or more of the outstanding shares of Common Stock on a
Fully Diluted Basis.

     2. Extension of Non-competition Period. The period referenced in Section
6.02(a) of the Agreement shall be extended to include the period beginning on
October 1, 1999 and ending at the close of business on October 29, 2004.

     3. Governing Law. This Extension shall be governed by and construed in
accordance with the laws of the State of Illinois.

     4. No Waiver of Other Rights. The execution, delivery and effectiveness of
this Extension shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any of the parties to the Agreement.

                            [Signature Page Follows]


<PAGE>

     IN WITNESS WHEREOF, this Waiver is hereby executed as of the date first
above written.


LIFEWAY FOODS, INC.,                        DANONE FOODS, INC.,
an Illinois corporation                     a Delaware corporation


By: /s/ Julie Smolyansky                    By: /s/ Donna R. Besteiro
Name: Julie Smolyansky                      Name: Donna R. Besteiro
Its: President                              Its: Assistant Secretary and General
                                                 Counsel




</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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