Exhibit 10.1
FIFTH EXTENSION
TO
STOCKHOLDERS’ AGREEMENT
     This FIFTH EXTENSION TO STOCKHOLDERS’ AGREEMENT (the “Fifth Extension”) is
hereby entered into as of the 26th day of December, 2006, by and between Lifeway
Foods, Inc., an Illinois corporation (the “Company”) and DS Waters, L.P., a
Delaware limited partnership (“DSW”) (“Stockholder”). Unless otherwise defined
herein, all capitalized terms used herein shall have the same meaning ascribed
to those terms in the Stockholders’ Agreement.
     WHEREAS, Danone Foods, Inc., a Delaware corporation (“DFI”) executed that
certain Stock Power dated November 10, 2005, transferring all the shares of the
Company which were held by DFI as of such date that are the subject of that
certain Stockholders’ Agreement by and among DFI and the Company and certain
other parties dated as of October 1, 1999, as amended on December 24, 1999 (as
amended and extended, the “Stockholders’ Agreement”) and as extended by that
certain First Extension to Stockholders’ Agreement dated September 28, 2004 (the
“First Extension”) and by that certain Second Extension to Stockholders’
Agreement dated October 29, 2004 (“Second Extension”) and by that certain Third
Extension to Stockholders’ Agreement dated December 30, 2004 (the “Third
Extension”), and by that certain Fourth Extension to Stockholders’ Agreement
dated April 28th of 2006 (the “Fourth Extension”) are the subject of the
Stockholders’ Agreement to DSW;
     WHEREAS, DSW accepted such shares subject to the covenants and restrictions
contained in the Stockholders’ Agreement and DSW hereby agrees to be bound by
its terms contained therein;
     WHEREAS, under the Fourth Extension, the Standstill Period and the
operative period of Section 6.02 of the Stockholders’ Agreement (“Non-Compete
Period”) expired on December 30, 2005; and
     WHEREAS, each of the Company and the Stockholders desires to further amend
the Stockholders’ Agreement to extend the Standstill Period and the Non-Compete
Period, with the specific exclusion of the company, Stonyfield Farms, Inc. from
any such obligation, of the Stockholders’ Agreement as more fully provided in
this Fifth Extension.
     NOW, THEREFORE, in consideration of the entry of the parties into this
Fifth Extension and for other good and valuable consideration, the receipt of
which is acknowledged herein, the parties hereto agree as follows:
     1. Acceptance of Terms of Stockholders’ Agreement; Acknowledgment. DSW
represents to Company that DSW is an Affiliate of DFI and that DSW has been
assigned the Stockholders’ Agreement and the shares of Company from DFI and, DSW
further agrees to be bound by, and receive all the benefits of, the terms and
conditions of the Stockholders’ Agreement.
     2. 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, 2007 and during which the Stockholders
Beneficially Owns 10% or more of the outstanding shares of Common Stock on a
Fully Diluted Basis.

 

--------------------------------------------------------------------------------

 

     3. Extension of Non-Compete Period. The Non-Compete Period shall be
extended to include the period beginning on October 1, 1999 and ending at the
close of business on December 31, 2007, with the exception that the Stonyfield
Farms, Inc. entity shall be specifically excluded from any and all non-compete
obligations. The non-compete obligations shall apply only to kefir, fromage
frais and Greek Yogurt.
     4. Governing Law. This Fifth Extension shall be governed by and construed
in accordance with the laws of the State of Illinois.
     5. No Waiver of Other Rights. The execution, delivery and effectiveness of
this Fifth 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.
     6. Counterparts. This Fifth 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]

 

--------------------------------------------------------------------------------

 

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

      LIFEWAY FOODS, INC.,
an Illinois corporation   DS WATERS, L.P.,
a Delaware limited partnership     By: DS Waters General Partner, LLC, its
general partner By:  /s/ Julie Smolyansky
Name: Julie Smolyansky
Its: President   By:  /s/ Anthony Cicio
Name: Anthony Cicio
Its: Assistant Secretary