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<SEC-DOCUMENT>0001072613-04-002005.txt : 20041104
<SEC-HEADER>0001072613-04-002005.hdr.sgml : 20041104
<ACCEPTANCE-DATETIME>20041104152413
ACCESSION NUMBER:		0001072613-04-002005
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20041029
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041104
DATE AS OF CHANGE:		20041104

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:		041119535

	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_13043.txt
<DESCRIPTION>FORM 8-K DATED OCTOBER 29, 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 29, 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)



[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
    230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
    240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
    Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
    Act (17 CFR 240.13e-4(c))
================================================================================
<PAGE>

                               LIFEWAY FOODS, INC.

ITEM 1.01.  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On October 29, 2004, Lifeway Foods, Inc. ("Lifeway") and Danone Foods, Inc.
("Danone") entered into a Second Extension of Stockholders' Agreement dated as
of October 29, 2004 (the "Second Extension"). The Second Extension is a further
amendment of 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 (the
"Stockholders' Agreement") and as previously extended by that certain Extension
to Stockholders' Agreement dated as of September 28, 2004 (the "First
Extension"). The Stockholders' Agreement was previously disclosed as Exhibit No.
10.11 to the Current Report on Form 8-K filed by Lifeway on October 12, 1999 and
the First Extension was previously disclosed as Exhibit 10.1 to the Current
Report on Form 8-K filed by Lifeway on October 18, 2004.

Under the Stockholders' Agreement, Danone has the right to nominate one Lifeway
director, anti-dilutive rights relating to future offerings of securities by
Lifeway and 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.

Under the First Extension, the terms of the Noncompetition and Standstill
Provisions of the Stockholders' Agreement were due to expire on October 29,
2004. The Second Extension amends the Stockholders' Agreement to extend the
terms of the Noncompetition Provision and of the Standstill Provision through
December 31, 2004. During the term of the Second 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  Second Extension of Stockholders' Agreement dated
                              as of October 29, 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: November 4, 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>exhibit10-1_13043.txt
<DESCRIPTION>EXTENSION TO STOCKHOLDER AGREEMENT
<TEXT>
                                                                    EXHIBIT 10.1
                                                                    ------------

SECOND EXTENSION OF STOCKHOLDERS' AGREEMENT DATED AS OF OCTOBER 29, 2004 BETWEEN
LIFEWAY FOODS, INC. AND DANONE FOODS, INC.

                                SECOND EXTENSION
                                       TO
                             STOCKHOLDERS' AGREEMENT

            This SECOND EXTENSION TO STOCKHOLDERS' AGREEMENT (the "Second
Extension") is hereby entered into as of the 29th day of October, 2004 by and
among Lifeway Foods, Inc., an Illinois corporation (the "Company") and Danone
Foods, Inc., a Delaware corporation (the "Stockholder"), who are parties to that
certain Stockholders' Agreement (as amended and extended, the "Stockholders'
Agreement") by and among the Company, the Stockholder, and certain other parties
(the "Holders") dated as of October 1, 1999, as amended on December 24, 1999 and
as extended by that certain Extension to Stockholders' Agreement dated as of
September 28, 2004 (the "First Extension"). Unless otherwise defined herein, all
capitalized terms used herein shall have the same meaning ascribed to those
terms in the Agreement.

            WHEREAS, under the First Extension, the Standstill Period and the
operative period of Section 6.02 of the Agreement shall expire on October 29,
2004;

            WHEREAS, each of the Company and the Stockholder desires to further
amend the Stockholders' Agreement to extend the Standstill Period and the
operative period of Section 6.02 of the Agreement as more fully provided in this
Second 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 Second 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 December 31, 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 December 31,
2004.

            3. Governing Law. This Second 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 Second 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.

            5. Counterparts. This Second Extension may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which counterparts together shall constitute one and the same instrument.


                            [Signature Page Follows]


<PAGE>

            IN WITNESS WHEREOF, this Second Extension 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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