Exhibit 10.60

SENIOR MANAGEMENT

CLASS F UNIT SUBSCRIPTION AGREEMENT

THIS SENIOR MANAGEMENT CLASS F UNIT SUBSCRIPTION AGREEMENT (this “Agreement”) is
made as of October 23, 2009, by and among Michael Foods Investors, LLC, a
Delaware limited liability company (“Investors”) and Mark W. Westphal (the
“Executive”).

WHEREAS, the Class F Units of Investors (“Class F Units”) being issued to
Executive hereunder shall have the rights and benefits and be subject to the LLC
Agreement (as defined below).

NOW, THEREFORE, in order to implement the foregoing and in consideration of the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:

 

1. Definitions.

1.1 Agreement. The term “Agreement” shall have the meaning set forth in the
preface.

1.2 Applicable Percentage. Except as provided otherwise in the next sentence,
the term “Applicable Percentage” shall mean: (i) 0% during the one-year period
commencing on the date hereof; (ii) 20% during the one-year period commencing on
the first anniversary of the date hereof; (iii) 40% during the one-year period
commencing on the second anniversary of the date hereof; (iv) 60% during the
one-year period commencing on the third anniversary of the date hereof; (v) 80%
during the one-year period commencing on the fourth anniversary of the date
hereof, and (vi) 100% on and after the fifth anniversary of the date hereof.
Notwithstanding the foregoing, immediately prior to and after the occurrence of
a Change in Control, such Applicable Percentage shall mean 100%.

1.3 Board. The “Board” shall mean Investors’ Management Committee.

1.4 Cause. The term “Cause” used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of “Cause” is then in effect, shall mean (i) the continued failure of
the Executive to perform substantially the Executive’s duties with Investors or
one of its affiliates (other than any such failure resulting from incapacity due
to physical or mental illness) after a written demand for substantial
performance is delivered to the Executive by the Board which specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed the Executive’s duties; (ii) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to Investors or one of its subsidiaries; or
(iii) conviction of a felony or guilty or nolo contendere plea by the Executive
with respect thereto.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered “willful” unless it is done, or omitted to be
done, by the Executive in bad faith or

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

without reasonable belief that the Executive’s action or omission was in the
best interests of Investors or one of its subsidiaries. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive Officer (while the
Executive does not serve as such) or based upon the advice of counsel for
Investors shall be conclusively presumed to be done, or omitted to be done, by
the Executive in good faith and in the best interests of Investors and its
subsidiaries. The cessation of employment of the Executive shall not be deemed
to be for Cause unless and until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the affirmative vote of not
less than 75% of the entire membership of the Board (excluding the Executive) at
a meeting of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity, together
with counsel, to be heard before the Board) finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described in (i),
(ii) or (iii) above, and specifying the particulars thereof in detail.

1.5 Change in Control. The term “Change in Control” means the consummation of a
transaction, whether in a single transaction or in a series of related
transactions that are consummated contemporaneously (or consummated pursuant to
contemporaneous agreements), with any other party or parties other than THL or
its affiliates on an arm’s-length basis, pursuant to which (a) such party or
parties, directly or indirectly, acquire (whether by merger, stock purchase,
recapitalization, reorganization, redemption, issuance of capital stock or
otherwise) more than 50% of the voting interests of Investors, (b) such party or
parties, directly or indirectly, acquire assets constituting all or
substantially all of the assets of Investors and its subsidiaries on a
consolidated basis, or (c) prior to an initial public offering of Investors’ (or
its successor’s), M-Foods Holdings, Inc.’s or the Company’s Common Stock
pursuant to an offering registered under the 1933 Act, THL or its affiliates
cease to have the ability to elect, directly or indirectly, a majority of the
Board or the Board of Directors of M-Foods Holdings, Inc. or the Company, as the
case may be. In no event shall a Change in Control include any transaction
effected for the purpose of (i) changing, directly or indirectly, the form of
organization or the organizational structure of Investors or any of its
Subsidiaries or (ii) contributing stock to entities controlled by Investors.

1.6 Class F Units. The term “Class F Units” shall have the meaning set forth in
the preface.

1.7 Company. The term “Company” shall mean Michael Foods, Inc., a Delaware
corporation.

1.8 Cost. The term “Cost” shall mean, with respect to a Class F Unit, $100.00
per unit (as proportionately adjusted for all subsequent distributions of units
and other recapitalizations).

1.9 Disability. The term “Disability” used in connection with the termination of
employment of the Executive shall have the same meaning ascribed to such term in
any employment or severance agreement then in effect between Executive and
Investors or one of its subsidiaries or, if no such agreement containing a
definition of “Disability” is then in effect, shall mean a determination by the
Company in its sole discretion that Executive is unable to perform his job
responsibilities as a result of chronic illness, physical, mental or any other
disability for a period of six months or more.

 

2

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

1.10 Employee and Employment. The term “employee” shall mean any employee (as
defined in accordance with the regulations and revenue rulings then applicable
under Section 3401(c) of the Internal Revenue Code of 1986, as amended) of
Investors or any of its subsidiaries, and the term “employment” shall include
service as a part- or full-time employee to Investors or any of its
subsidiaries.

1.11 Executive. The term “Executive” shall have the meaning set forth in the
preface.

1.12 Executive Group. The term “Executive Group” shall have the meaning set
forth in Section 4.1(a).

1.13 Fair Market Value. The term “Fair Market Value” used in connection with the
value of Units shall mean the fair value of the Units determined in good faith
by the Board (without taking into account the effect of any contemporaneous
repurchase of Units at less than Fair Market Value under Section 6); provided
that, the Board shall assume, as of such calculation date, the sale of all of
the assets of Investors at fair value and the distribution of the proceeds
resulting therefrom in accordance with the distribution provisions set forth in
the LLC Agreement; provided further that if the Executive disagrees in good
faith with the Board’s determination, the Executive shall promptly notify
Investors in writing of such disagreement, in which event an independent
appraiser, accountant or investment banking firm (the “Arbiter”) selected by
mutual agreement of the Executive and the Board shall make a determination of
the fair market value thereof (disregarding any discount for minority interest
or marketability of units and assuming the prior conversion, exercise or
exchange of all securities convertible into or exchangeable or exercisable for
Units) solely by (i) reviewing a single written presentation timely made by each
of Investors and the Executive setting forth their respective resolutions of the
dispute and the bases therefor and (ii) accepting either the Executive’s or
Investors’ proposed resolution of the dispute. Promptly following Investors’
receipt of Executive’s written notice of disagreement, Investors shall make
available to Executive all data (including reports of employees and outside
advisors) relied upon by the Board in making its determination. The Executive’s
and the Investors’ written presentations must be submitted to the Arbiter within
30 days of the Arbiter’s engagement. The Arbiter shall notify the Executive and
Investors of its decision within 40 days of its engagement. The party whose
proposed resolution is not accepted shall pay all of the Arbiter’s fees and
expenses. If the Executive’s proposed resolution is accepted, Investors also
shall pay all of the Executive’s reasonable out-of-pocket fees and expenses
(including reasonable fees and expenses of counsel and one appraiser, accountant
or investment banking firm) incurred in connection with the arbitration. Each of
Investors and the Executive agrees to execute, if requested by the Arbiter, a
reasonable engagement letter with the Arbiter.

1.14 Financing Default. The term “Financing Default” shall mean any event of
default under (i) that certain Credit Agreement by and among the Company,
Michael Foods Holdings, Inc. and Bank of America, as administrative Agent, as
amended, (ii) that certain Senior Unsecured Term Loan Agreement by and among the
Company, Michael Foods Holdings, Inc. and Bank of America, as administrative
agent as amended, (iii) those certain 8.00% Senior

 

3

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

Subordinated Notes due 2013 in an aggregate principal amount of $150,000,000
issued on or about November 20, 2003, and (iv) those certain 9 3/4% Discount
Senior Notes due 2013 issued on or about September 17, 2004, or any other
similar notes or instruments that Investors or its Subsidiaries may issue from
time to time.

1.15 Good Reason. The term “Good Reason” shall have the same meaning ascribed to
such term in any employment or severance agreement then in effect between
Executive and Investors or one of its subsidiaries or, if no such agreement
containing a definition of “Good Reason” is then in effect, shall mean:

(a) the assignment to the Executive of any duties inconsistent with the
Executive’s title and position (including status, offices and reporting
requirements), authority, duties or responsibilities, or any other action by the
Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive; provided that
it is specifically understood that within six months of a Change in Control the
Company shall have the flexibility to appoint the Executive to a reporting
relationship different from that which existed prior to the Change in Control,
to make an immaterial change in Executive’s duties or to change the Executive’s
title provided that Executive shall not have a stature less than that of a
Senior Vice President and it is understood that equivalent positions may have
different titles;

(b) any failure by the Company to provide the base salary, bonus participation
and welfare benefits as had previously been agreed with Executive, or, following
a Change in Control, the failure by the Company to review and provide increases
in base salary in a manner that is consistent with the acquiror’s review and
compensation policy for other senior executives, in each case other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice thereof given
by the Executive; or

(c) the failure of the Company upon a Change in Control to (A) continue in
effect any employee benefit plan, compensation plan, welfare benefit plan or
material fringe benefit plan in which Executive is participating immediately
prior to such Change in Control or the taking of any action by the Company which
would adversely affect Executive’s participation in or reduce Executive’s
benefits under any such plan, unless Executive is permitted to participate in
other plans providing Executive with substantially comparable benefits, or
(B) provide Executive with paid vacation in accordance with the most favorable
past practice of the Company as in effect for Executive immediately prior to
such Change in Control.

1.16 Investors. The term “Investors” shall have the meaning set forth in the
preface.

1.17 LLC Agreement. The term “LLC Agreement” shall mean the Second Amended and
Restated Limited Liability Company Agreement of Investors, dated as of
October 23, 2009, entered into by and among the members of Investors, as amended
from time to time in accordance with its terms.

 

4

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

1.18 Permitted Transferee. The term “Permitted Transferee” means any transferee
of Units pursuant to clauses (e) or (f) of the definition of “Exempt Transfer”
as defined in the Securityholders Agreement.

1.19 Person. The term “Person” shall mean any individual, corporation,
partnership, limited liability company, trust, joint stock company, business
trust, unincorporated association, joint venture, governmental authority or
other entity of any nature whatsoever.

1.20 Public Offering. The term “Public Offering” shall have the meaning set
forth in the Securityholders Agreement.

1.21 Retirement. The term “Retirement” shall mean, with respect to the
Executive, the Executive’s retirement as an employee of Investors or any of its
subsidiaries on or after reaching age 65, or such earlier age as may be
otherwise determined by the Board, after at least three years employment with
Investors or any of its subsidiaries.

1.22 Securities Act. The term “Securities Act” shall mean the Securities Act of
1933, as amended, and all rules and regulations promulgated thereunder, as the
same may be amended from time to time.

1.23 Securityholders Agreement. The term “Securityholders Agreement” shall mean
the Securityholders Agreement dated as of November 20, 2003, among Investors and
the other securityholders party thereto, as it may be amended or supplemented
thereafter from time to time.

1.24 THL. The term “THL” means, collectively Thomas H. Lee Equity Fund V, L.P.
and its affiliates.

1.25 Termination Date. The term “Termination Date” means the date upon which
Executive’s employment with Investors and its subsidiaries is terminated.

1.26 Unvested Percentage. The term “Unvested Percentage” shall mean the result
of one minus the Applicable Percentage.

 

2. Purchase and Sale.

2.1 Purchase and Sale. Concurrently herewith, the Executive shall pay
$100,000.00 to Investors against issuance of 1,000 Class F Units. The Executive
shall pay the purchase price for the Class F Units by check or wire transfer of
immediately available funds to an account of Investors of which Executive has
been notified.

2.2 Section 83(b) Election. With respect to the Class F Units received by
Executive, within 30 days after the date hereof, Executive shall make a timely
election with the Internal Revenue Service under Section 83(b) of the Internal
Revenue Code of 1986, as amended, and the regulations promulgated thereunder in
the form of Exhibit A attached hereto.

 

5

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

3. Representations and Warranties of the Executive and Investors.

3.1 Unit Purchase Representations of the Executive. The Executive represents and
warrants to Investors that the statements contained in this Section 3.1 are
correct and complete as of the date of this Agreement:

(a) Power and Authority. The Executive has full power and authority to execute
and deliver this Agreement and perform his obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Executive,
enforceable in accordance with its terms and conditions. To the best of his
knowledge, the Executive need not give any notice to, make any filing with, or
obtain any authorization, consent or approval of any government or governmental
agency in order to consummate the transactions contemplated by this Agreement.

(b) Noncontravention. To the best of his knowledge, neither the execution and
the delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which the Executive is subject or
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Executive is a party or by which
he is bound or to which any of his assets is subject.

(c) Investment Representations: (i) The Executive has such knowledge and
experience in financial and business matters so that the Executive is capable of
protecting the Executive’s own interests in connection with the acquisition of
the Class F Units and evaluating the merits and risks of the Executive’s
investment in Investors.

(ii) The Executive is an “accredited executive” as defined in Regulation D
promulgated under the Securities Act. The Executive is familiar with the type of
investment that the Class F Units constitute and recognizes that an investment
in Investors involves substantial risks, including risk of loss of the entire
amount of such investment. The Executive can bear the economic risk of the
purchase of the Class F Units and of the loss of the entire amount of the
investment.

(iii) The Executive is aware that there are limitations and restrictions on the
circumstances under which the Executive may offer to sell, transfer or otherwise
dispose of the Class F Units. Such limitations and restrictions include those
set forth in the LLC Agreement and the Securityholders Agreement and those
imposed by operation of applicable securities laws and regulations. The
Executive acknowledges that as a result of such limitations and restrictions, it
might not be possible to liquidate an investment in the Class F Units readily
and that it may be necessary to hold such investment for an indefinite period.

(iv) In evaluating the suitability of an investment in Investors, the Executive
has not relied upon any oral or written representations or other information

 

6

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

from investors or any affiliate of Investors or any agent or representative of
Investors or its affiliates except as set forth herein. The Executive and the
Executive’s advisors have had a reasonable opportunity to ask questions of and
receive answers from a person or persons acting on behalf of Investor concerning
the terms and conditions of the offering of the Class F Units and have had
access to, and been supplied with, all additional information deemed necessary
by the Investor to verify the accuracy of such information.

(v) The Executive is acquiring the Class F Units for the Executive’s own
account, for investment and not with a view to resale or distribution except in
compliance with the Securities Act, the LLC Agreement and the Securityholders’
Agreement.

3.2 Legends. The Executive acknowledges that a restrictive legend in the form
set forth below and the legends set forth in Section 6.2(a) and (b) of the
Securityholders Agreement shall be placed on the certificates representing the
Class F Units:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
REPURCHASE OPTIONS AND OTHER PROVISIONS SET FORTH IN A MANAGEMENT UNIT
SUBSCRIPTION AGREEMENT BETWEEN THE ISSUER AND THE EXECUTIVE DATED AS OF
OCTOBER 23, 2009, AS AMENDED AND MODIFIED FROM TIME TO TIME, A COPY OF WHICH MAY
BE OBTAINED BY THE HOLDER HEREOF AT THE ISSUER’S PRINCIPAL PLACE OF BUSINESS
WITHOUT CHARGE”; and

a notation shall be made in the appropriate records of Investors indicating that
the Class F Units are subject to restrictions on transfer and, if Investors
should at some time in the future engage the services of a securities transfer
agent, appropriate stop-transfer instructions will be issued to such transfer
agent with respect to the Class F Units.

3.3 Representations of Investors. Investors represents to the Executive that the
statements contained in this Section 3.3 are correct and complete as of the date
of this Agreement:

(a) Organization and Power. Investors is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware with full power and authority to enter into this Agreement and perform
its obligations hereunder.

(b) Authorization. The execution, delivery and performance of this Agreement by
Investors and the consummation of the transactions contemplated hereby by
Investors have been duly and validly authorized by all requisite limited
liability company action on the part of Investors, and no other proceedings on
its part are necessary to authorize the execution, delivery or performance of
this Agreement. This Agreement has been duly executed and delivered by
Investors, and this Agreement constitutes a valid and binding obligation of
Investors, enforceable in accordance with its

 

7

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

terms and conditions. Investors need not give any notice to, make any filing
with, or obtain any authorization, consent or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.

(c) Noncontravention. Neither the execution and the delivery of this Agreement,
nor the consummation of the transactions contemplated hereby, will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which Investors is subject or any provision of its charter or bylaws or
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which Investors is a party or by which it is
bound or to which any of its assets is subject.

 

4. Certain Sales Upon Termination of Employment.

4.1 Call Options.

(a) If the Executive’s employment with Investors or any of its subsidiaries
terminates for any of the reasons set forth in clauses (i), (ii) or (iii) below
prior to a Change in Control, or if the Executive engages in Competitive
Activity (as defined in Section 6.1 of this Agreement), for any Units issued 181
days or more prior to the date of Executive’s termination of employment or
engagement in Competitive Activity, within 120 days after such date (or in the
case of Units issued 180 days or less prior to such date or at any time after
such date, no earlier than 181 days and no later than 271 days after the date of
issuance of such Units), Investors shall have the right and option to purchase,
and the Executive and the Executive’s Permitted Transferees (hereinafter
referred to as the “Executive Group”) shall be required to sell to Investors,
any or all of such Units then held by such member of the Executive Group at a
price per unit equal to the applicable purchase price determined pursuant to
Section 4.1(c):

(i) if the Executive’s active employment with Investors and its subsidiaries is
terminated due to the Disability, death or Retirement of the Executive;

(ii) if the Executive’s active employment with Investors and its subsidiaries is
terminated by Investors and its subsidiaries without Cause or by the Executive
for Good Reason; or

(iii) if the Executive’s active employment with Investors and its subsidiaries
is terminated (A) by Investors or any of its subsidiaries for Cause or (B) by
the Executive for any other reason not set forth in Section 4.1(a)(i) or
Section 4.1(a)(ii).

(b) If Investors desires to exercise one of its options to purchase Units
pursuant to this Section 4.1, Investors shall, not later than the expiration of
the applicable period described for such purchase in Section 4.1(a), send
written notice to each member of the Executive Group of its intention to
purchase Units, specifying the number of Units

 

8

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

to be purchased (the “Call Notice”). Subject to the provisions of Section 5, the
closing of the purchase shall take place at the principal office of Investors on
the later of the 60th day after the giving of the Call Notice and the date that
is 10 business days after the final determination of Fair Market Value. Subject
to the provisions of Section 5.1, the Executive shall deliver to Investors duly
executed instruments transferring title to units to Investors, against payment
of the appropriate purchase price by cashier’s or certified check payable to the
Executive or by wire transfer of immediately available funds to an account
designated by the Executive.

(c) In the event of a purchase by Investors pursuant to Section 4.1(a), the
purchase price shall be:

(A) with respect to that number of Class F Units equal to the Unvested
Percentage multiplied by the total number of Class F Units issued hereunder (the
“Unvested Number”):

(i) if the Executive engages in any Competitive Activity (as defined in
Section 6.1 of this Agreement), or a termination of employment described in
Section 4.1(a)(iii), a price per unit equal to the lesser of (A) Fair Market
Value (measured as of the Activity Date (as defined in Section 6.2 of this
Agreement)) and (B) Cost; or

(ii) in the case of a termination of employment for any reason other than as set
forth in Section 4.1(c)(A)(i) above, a price per unit equal to Cost.

(B) with respect to all Class F Units other than the Unvested Number of Class F
Units:

(i) if the Executive engages in any Competitive Activity, or a termination of
employment described in Section 4.1(a)(iii), a price per unit equal to Cost; or

(ii) in the case of a termination of employment for any reason other than as set
forth in Section 4.1(c)(A)(i), a price per unit equal to the greater of (A) Fair
Market Value (measured as of the Activity Date) and (B) Cost.

Notwithstanding anything to the contrary contained in this Agreement, if the
Fair Market Value of Units subject to a Call Notice is finally determined to be
an amount at least 10% greater than the per Unit repurchase price for such Unit
in the Call Notice, Investors shall have the right to revoke the exercise of its
option pursuant to this Section 4.1 for all or any portion of the Units elected
to be repurchased by it by delivering notice of such revocation in writing to
the Executive Group during the ten-day period beginning on the date that
Investors is given written notice that the Fair Market Value of a Unit was
finally determined to be an amount at least 10% greater than the per Unit
repurchase price set forth in the Call Notice.

4.2 Obligation to Sell Several. If there is more than one member of the
Executive Group, the failure of any one member thereof to perform its
obligations hereunder shall not excuse or affect the obligations of any other
member thereof, and the closing of the purchases from such other members by
Investors shall not excuse, or constitute a waiver of its rights against, the
defaulting member.

 

9

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

5. Certain Limitations on Investors’ Obligations to Purchase Units.

5.1 Payment for Units. If at any time Investors elects to purchase any Units
pursuant to Section 4, Investors shall pay the purchase price for the Units it
purchases (i) first, by offsetting indebtedness, if any, owing from the
Executive to Investors (which indebtedness shall be applied pro rata against the
proceeds receivable by each member of the Executive Group receiving
consideration in such repurchase) and (ii) then, by Investors’ delivery of a
check or wire transfer of immediately available funds for the remainder of the
purchase price, if any, against delivery of the certificates or other
instruments representing the Units so purchased, duly endorsed; provided that if
such cash payment would result (A) in a violation of any law, statute, rule,
regulation, policy, order, writ, injunction, decree or judgment promulgated or
entered by any federal, state, local or foreign court or governmental authority
applicable to Investors or any of its subsidiaries or any of its or their
property or (B) after giving effect thereto, a Financing Default, or (C) if the
Board determines in good faith that immediately prior to such purchase there
shall exist a Financing Default which prohibits such purchase, dividend or
distribution ((A) through (C) collectively the “Cash Deferral Conditions”), the
portion of the cash payment so affected may be made by Investors’ delivery of
preferred units of Investors with a liquidation preference equal to the balance
of the purchase price; which preferred units shall accrue yield annually at the
“prime rate” published in The Wall Street Journal on the date of issuance, which
yield shall be payable at maturity or upon payment of distributions by Investors
(other than tax distributions). Each such preferred unit shall as of its
issuance be deemed to have basic contributions made with respect to such unit
equal to (A) the portion of the cash payment paid by the issuance of such
preferred units divided by (B) the number of preferred units so issued in the
repurchase. Any such preferred units issued shall be promptly redeemed (i) when
the Cash Deferral Condition which prompted their issuance no longer exists,
(ii) upon consummation of a Public Offering of the Company or Michael Foods
Holdings, Inc. (or their successors) (to the extent allowed by the underwriters
of such Public Offering), or (iii) upon a Change in Control from net cash
proceeds, if any, payable to Investors or its unitholders; to the extent that
sufficient net cash proceeds are not so payable, the preferred units shall be
cancelled in exchange for such non-cash consideration received by unitholders in
the Change in Control having a fair market value equal to the principal of and
accrued yield on the preferred units. If a yield is required to be paid on any
preferred units prior to maturity and any Cash Deferral Conditions exist, such
yield may be cumulated and accrued until and to the extent that such prohibition
no longer exists.

 

6. Noncompetition.

6.1 Competitive Activity. Executive shall be deemed to have engaged in
“Competitive Activity” if, during the period commencing on the date hereof and
ending on the second anniversary of the date Executive’s employment with
Investors or its subsidiaries terminates, (i) Executive, for himself or on
behalf of any other person, firm, partnership, corporation, or other entity,
engages, directly or indirectly, as an executive, agent, representative,
consultant, partner, shareholder or holder of any other financial interest, in
(A) Cargill, Inc. or (B) any business that competes with Investors or its
subsidiaries in the business of the production, distribution, or sales of eggs
or egg products, refrigerated potato products or any

 

10

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

other business engaged in by the Company or its Subsidiaries at the time of
termination of Executive’s employment (a “Competing Business”), it being
understood and agreed that Executive’s activities shall not satisfy this clause
(i)(B) where Executive is employed by a person, firm, partnership, corporation,
or other entity engaged in a variety of activities, including the Competing
Business, and Executive is not engaged in or responsible for the Competing
Business of such entity. Executive may also, without satisfying clause, (i) be a
passive owner of not more than 2% of the outstanding publicly traded stock of
any class of a Competing Business so long as Executive has no active
participation in the business of such entity, except to the extent permitted
above; or (ii) Executive (A) directly or indirectly through another entity,
induces or attempts to induce any employee of the Company or its subsidiaries to
leave the employ of the Company or its subsidiaries, or in any way interfere
with the relationship between the Company or any of its subsidiaries and any
employee thereof, (B) knowingly hires any person who was an employee of the
Company or any of its subsidiaries within 180 days prior to the time such
employee was hired by Executive, (C) induces or attempts to induce any customer,
supplier, licensee or other business relation of the Company or any of its
subsidiaries to cease doing business with the Company or its subsidiaries or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any subsidiary or (D) directly
or indirectly acquires or attempt to acquire an interest in any business
relating to the business of the Company or any of its subsidiaries and with
which the Company or any of its subsidiaries has entertained discussions or has
requested and received information relating to the acquisition of such business
by the Company or its subsidiaries in the one-year period immediately preceding
Executive’s termination of employment with the Company.

6.2 Activity Date. If Executive engages in Competitive Activity, the “Activity
Date” shall be the first date on which Executive engages in such Competitive
Activity.

6.3 Repayment of Proceeds. If Executive engages in Competitive Activity, then
Executive shall be required to pay to Investors, within ten business days
following the Activity Date, an amount equal to the excess, if any, of (A) the
aggregate proceeds Executive received upon the sale or other disposition of
Executive’s Units, over (B) the aggregate Cost of such Units.

 

7. Miscellaneous.

7.1 Transfers to Permitted Transferees. Prior to the transfer of Units to a
Permitted Transferee (other than a transfer in connection with or subsequent to
a Change in Control), the Executive shall deliver to Investors a written
agreement of the proposed transferee (a) evidencing such Person’s undertaking to
be bound by the terms of this Agreement and (b) acknowledging that the Units
transferred to such Person will continue to be Units for purposes of this
Agreement in the hands of such Person. Any transfer or attempted transfer of
Units in violation of any provision of this Agreement or the Securityholders
Agreement shall be void, and Investors shall not record such transfer on its
books or treat any purported transferee of such Units as the owner of such Units
for any purpose.

7.2 Deemed Transfer of Units. If Investors shall deliver, at the time and place
and in the amount and form provided in this Agreement, the consideration for the
Units to be repurchased in accordance with the provisions of this Agreement,
then from and after such time,

 

11

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

the Person from whom such units are to be repurchased shall no longer have any
rights as a holder of such units (other than the right to receive payment of
such consideration in accordance with this Agreement), and such Units shall be
deemed purchased in accordance with the applicable provisions hereof and
Investors shall be deemed the owner and holder of such Units, whether or not
certificates therefor have been delivered as required by this Agreement.

7.3 Recapitalizations, Exchanges, Etc., Affecting Units. The provisions of this
Agreement shall apply, to the full extent set forth herein with respect to
Units, to any and all securities of Investors or any successor or assign of
Investors (whether by merger, consolidation, sale of assets or otherwise) which
may be issued in respect of, in exchange for, or in substitution of the Units,
by reason of any dividend payable in units, issuance of units, combination,
recapitalization, reclassification, merger, consolidation or otherwise.

7.4 Executive’s Employment by Investors. Nothing contained in this Agreement
shall be deemed to obligate Investors or any subsidiary of Investors to employ
the Executive in any capacity whatsoever or to prohibit or restrict Investors
(or any such subsidiary) from terminating the employment of the Executive at any
time or for any reason whatsoever, with or without Cause.

7.5 Indemnification by Executive. Executive agrees to indemnify and hold
harmless Investors against any and all losses, liabilities, damages, judgments,
fines, fees or expenses, including, without limitation, attorneys’ fees (for
purposes of this Section 7.5, hereinafter “Losses”), incurred in connection with
any failure to withhold amounts relating to the Units acquired herein. In the
event there is a determination within the meaning of Section 1313 of the
Internal Revenue Code of 1986, as amended, that Investors properly failed to
withhold amounts relating to the Units acquired herein by Executive, Executive
shall provide Investors with a Form 4669 or other suitable evidence of payment
of taxes (which will include a cancelled check or a copy of the relevant signed
tax return) with respect to the receipt of any distributions relating to the
Units acquired herein by Executive.

7.6 Binding Effect. The provisions of this Agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that no Permitted
Transferee shall derive any rights under this Agreement unless and until such
Permitted Transferee has executed and delivered to Investors a valid undertaking
and becomes bound by the terms of this Agreement.

7.7 Amendment; Waiver. This Agreement may be amended only by a written
instrument signed by the parties hereto. No waiver by any party hereto of any of
the provisions hereof shall be effective unless set forth in a writing executed
by the party so waiving.

7.8 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed therein.

7.9 Jurisdiction. Any suit, action or proceeding with respect to this Agreement,
or any judgment entered by any court in respect of any thereof, shall be brought
in any court of competent jurisdiction in the State of Delaware, and each of
Investors and the members of the

 

12

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

Executive Group hereby submits to the exclusive jurisdiction of such courts for
the purpose of any such suit, action, proceeding or judgment. Each of the
members of the Executive Group and Investors hereby irrevocably waives any
objections which it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Agreement brought
in any court of competent jurisdiction in the State of Delaware, and hereby
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum.

7.10 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when personally delivered,
telecopied (with confirmation of receipt), one day after deposit with a
reputable overnight delivery service (charges prepaid) and three days after
deposit in the U.S. Mail (postage prepaid and return receipt requested) to the
address set forth below or such other address as the recipient party has
previously delivered notice to the sending party.

(a) If to Investors:

Michael Foods Investors, LLC

c/o Thomas H. Lee Partners, L.P.

100 Federal Street

Boston, MA 02110

Attention: Anthony DiNovi

      Kent Weldon

      Joshua Bresler

Facsimile: (617) 227-3514

with copies to:

Weil, Gotshal & Manges LLP

100 Federal Street

Boston, MA 02110

Attention: Marilyn French

Facsimile: (617) 772-8333

(b) If to the Executive, to the address as shown on the unit register of
Investors.

7.11 Rights Cumulative; Waiver. The rights and remedies of the Executive and
Investors under this Agreement shall be cumulative and not exclusive of any
rights or remedies which either would otherwise have hereunder or at law or in
equity or by statute, and no failure or delay by either party in exercising any
right or remedy shall impair any such right or remedy or operate as a waiver of
such right or remedy, nor shall any single or partial exercise of any power or
right preclude such party’s other or further exercise or the exercise of any
other power or right. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
preceding or succeeding breach and no failure by either party to exercise any
right or privilege hereunder shall be deemed a waiver of such party’s rights or
privileges hereunder or shall be deemed a waiver of such party’s rights to
exercise the same at any subsequent time or times hereunder.

 

13

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

7.12 Counterparts. This Agreement may be executed in separate counterparts
(including by means of telecopied signature pages), and by different parties on
separate counterparts each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.

7.13 Integration. This Agreement and the documents referred to herein or
delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof
other than those expressly set forth herein and therein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.

*    *    *    *    *

 

14

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

IN WITNESS WHEREOF, the parties have executed this Senior Management Unit
Subscription Agreement as of the date first above written.

 

MICHAEL FOODS INVESTORS, LLC By:  

/s/ Gregg A. Ostrander

Its:  

Chairman /President/CEO

EXECUTIVE

/s/ Mark W. Westphal

Mark W. Westphal

 

15