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<SEC-DOCUMENT>0001072613-04-002376.txt : 20041227
<SEC-HEADER>0001072613-04-002376.hdr.sgml : 20041224
<ACCEPTANCE-DATETIME>20041227170946
ACCESSION NUMBER:		0001072613-04-002376
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20041224
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041227
DATE AS OF CHANGE:		20041227

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:		041226999

	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_13168.txt
<DESCRIPTION>LIFEWAY FOODS, INC. FORM 8-K
<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): December 24, 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.

SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS

ITEM 1.01   ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On December 24, 2004, Lifeway Foods, Inc. ("Lifeway") and Danone Foods, Inc.
("Danone") entered into a Third Extension of Stockholders' Agreement dated as of
December 30, 2004 (the "Third Extension"). The Third 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") and by that certain Second Extension to Stockholders' Agreement
dated as of October 29, 2004 (the "Second Extension"). The Stockholders'
Agreement previously was disclosed as Exhibit No. 10.11 to the Current Report on
Form 8-K filed by Lifeway on October 12, 1999, the Letter Agreement amending the
Stockholders' Agreement as of December 24, 1999 previously was disclosed as
Exhibit 10.12 to the Current Report on Form 8-K filed by Lifeway on January 12,
2000, the First Extension previously was disclosed as Exhibit 10.1 to the
Current Report on Form 8-K filed by Lifeway on October 18, 2004 and the Second
Extension previously was disclosed as Exhibit 10.1 to the Current Report on Form
8-K filed by Lifeway on November 4, 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 issued and
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. Under the Second Extension, the terms of these provisions were extended
through December 31, 2004. The Third Extension amends the Stockholders'
Agreement to extend the terms of the Noncompetition Provision and of the
Standstill Provision through December 30, 2005.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

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

            Exhibit 10.1   Third Extension of Stockholders' Agreement dated as
                           of December 30, 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: December 24, 2004

                                   LIFEWAY FOODS, INC.


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

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit10-1_13168.txt
<DESCRIPTION>THIRD EXTENSION OF STOCKHOLDERS' AGREEMENT
<TEXT>
                                                                    EXHIBIT 10.1
                                                                    ------------

THIRD EXTENSION OF STOCKHOLDERS' AGREEMENT DATED AS OF DECEMBER 30, 2004 BETWEEN
LIFEWAY FOODS, INC. AND DANONE FOODS, INC.

                                 THIRD EXTENSION
                                       TO
                             STOCKHOLDERS' AGREEMENT

            This THIRD EXTENSION TO STOCKHOLDERS' AGREEMENT (the "Third
Extension") is hereby entered into as of the 30th day of December, 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") and by that certain Second Extension
to Stockholders' Agreement dated as of October 29, 2004 (the "Second
Extension"). Unless otherwise defined herein, all capitalized terms used herein
shall have the same meaning ascribed to those terms in the Stockholders'
Agreement.

            WHEREAS, under the Second Extension, the Standstill Period and the
operative period of Section 6.02 of the Stockholders' Agreement shall expire on
December 31, 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 Stockholders' Agreement as more fully
provided in this Third Extension; and

            WHEREAS, pursuant to Section 7.01 of the Stockholders' 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 Third 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 30, 2005 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 Stockholders' Agreement shall be extended to include the
period beginning on October 1, 1999 and ending at the close of business on
December 30, 2005.

            3. Governing Law. This Third 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 Third 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 Stockholders' Agreement.

            5. Counterparts. This Third 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 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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