EXHIBIT 10.9

 

CONTRIBUTION AND EXCHANGE AGREEMENT

 

This Contribution and Exchange Agreement, dated as of November 23, 2004 (the
“Agreement”), is entered into by and between Craig A. Steinke (the
“Stockholder”) and Eagle Family Foods Holdings, Inc., a Delaware corporation
(the “Company”).

 

R E C I T A L S

 

WHEREAS, pursuant to the Amended and Restated Certificate of Incorporation of
the Company, the Company is authorized to issue 2,200,000 shares of capital
stock, which consists of (i) 1,200,000 shares of common stock, par value $0.01
per share (“Common Stock”), and (ii) 1,000,000 shares of Preferred Stock, of
which (a) 816,750 shares have been designated as Series A Preferred Stock, par
value $0.01 per share (“Series A Preferred”) and (b) 99 shares have been
designated as Series B Preferred Stock, par value $0.01 per share (“Series B
Preferred” and, together with the Series A Preferred, the “Preferred Stock”);

 

WHEREAS, the Stockholder is the owner of the number of shares of Common Stock
(the “Common Shares”) and Series A Preferred (the “Preferred Shares”) set forth
on Schedule I hereto, representing all of the Common Shares and Preferred Shares
owned by the Stockholder;

 

WHEREAS, the Stockholder desires to contribute to the Company, and the Company
desires to accept from the Stockholder, the Common Shares and the Preferred
Shares as a contribution to capital (the “Contribution”), in exchange (the
“Exchange”) for the issuance to the Stockholder of 95,547 shares of Common Stock
(collectively, the “New Shares”); and

 

WHEREAS, contemporaneously with the transactions contemplated by this Agreement,
(i) the Company shall amend and restate the Company’s certificate of
incorporation, among other things, to increase the number of authorized shares
of Common Stock and to create a new series of preferred stock (the “Series I
Preferred Stock”), (ii) the Company shall issue 1,048,091 shares of Common Stock
and 150 shares of Series I Preferred Stock to Dairy Farmers of America, Inc.
(“DFA”) (the “New Equity Investment”) pursuant to that certain Asset Purchase
Agreement, dated as of the date hereof, between the Company and DFA (the “DFA
Purchase Agreement”), and (iii) the Common Stock and Preferred Stock owned by
certain of the Company’s institutional investors shall be contributed to the
Company in exchange for the issuance of new shares of Common Stock pursuant to
the Contribution and Exchange Agreement, dated as of the date hereof, among the
Company and such institutional investors (the “Restructuring”);

 

NOW, THEREFORE, in consideration of the premises and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, agree as follows:

 

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ARTICLE I.

CONTRIBUTION AND EXCHANGE

 

Section 1.1. Contribution.

 

(a) Effective as of the date hereof, the Stockholder hereby contributes,
transfers, assigns and conveys to the Company all right, title and interest in
and to all of the Common Shares and Preferred Shares, together with any and all
rights, privileges, benefits, obligations and liabilities appertaining thereto,
reserving unto such Stockholder no rights or interests therein whatsoever, to
have and to hold the same unto the Company and its heirs, legal representatives,
successors and assigns, from and after the date hereof to its own proper use
forever. The Stockholder shall deliver all stock powers and other instruments of
transfer necessary to effect the Contribution.

 

(b) The Company hereby accepts the Contribution of the Common Shares and
Preferred Shares pursuant to Section 1.2(a) above.

 

(c) In consideration of the Contribution by the Stockholder, effective as of the
date hereof, in exchange for the Common Shares and Preferred Shares the Company
shall issue to the Stockholder the New Shares. At anytime after the date hereof
and at the request of the Stockholder, the Company shall issue to such
Stockholder certificates registered in the Stockholder’s name representing the
New Shares.

 

(d) The Stockholder hereby constitutes and appoints the Company, its successors
and assigns, as the Stockholder’s true and lawful attorney-in-fact, with full
power of substitution, in the name of the Company or in the name of the
Stockholder, to execute, deliver, file and/or record such documents, agreements
and instruments as shall be necessary or appropriate to effect the Contributions
pursuant to this Article I. The foregoing powers are coupled with an interest
and shall be irrevocable.

 

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to the Stockholder as follows:

 

Section 2.1. Organization. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.

 

Section 2.2. Authority. The Company has all requisite corporate power and
authority to execute, deliver and perform this Agreement and the transactions
contemplated hereby, including, without limitation, the issuance and delivery of
the New Shares to the Stockholder in accordance with the terms of this
Agreement. No other corporate action is necessary to authorize such execution,
delivery and performance other than corporate actions already taken, and upon
such execution and delivery, this Agreement shall constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforceability may be (i) limited by bankruptcy, insolvency
or other similar laws affecting the enforcement of creditor’s rights, or (ii)
subject to general principles of equity.

 

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Section 2.3. Outstanding Capital Stock of the Company. Immediately prior to the
consummation of the transactions contemplated by the Agreement and consummation
of the New Equity Investment and the Restructuring, the issued and outstanding
capital stock of the Company in the amounts held beneficially and of record is
as set forth on Schedule II hereto. Immediately following consummation of the
transactions contemplated by this Agreement and consummation of the New Equity
Investment and the Restructuring, the issued and outstanding capital stock of
the Company in the amounts held beneficially and of record shall be as set forth
on Schedule III hereto.

 

Section 2.4. Issuance of Shares. The New Shares to be issued by the Company
pursuant to this Agreement, when issued in accordance with the provisions
hereof, will be validly issued by the Company, fully paid and nonassessable
shares of the Company, and, no stockholder of the Company has, or will have, any
preemptive rights to subscribe for any such New Shares other than rights which
have been waived.

 

Section 2.5. Consents; Conflicts. Except with respect to filings made in
connection with exemptions from registration under state or federal securities
laws, the creation, authorization, issuance, offer and sale of the New Shares
will not require any consent, approval or authorization of, or filing,
registration or qualification with, any Person or governmental authority on the
part of the Company or the vote, consent or approval in any manner of the
holders of any security of the Company as a condition to the execution and
delivery of this Agreement or the creation, authorization, issuance, offer and
sale of the New Shares. The execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations hereunder will
not violate (i) the terms and conditions of the Restated Certificate of
Incorporation or the Bylaws of the Company, or any agreement or instrument to
which the Company is a party or by which it is bound or (ii) subject to the
accuracy of the Stockholder’s representations and warranties contained herein,
including, without limitation, the representations and warranties contained in
Section 3.3 hereof, any federal or state law.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER

 

The Stockholder represents and warrants to the Company as follows:

 

Section 3.1. Title to Securities. The Stockholder is the owner and holder of the
Common Shares and Preferred Shares and has good and valid title to such Common
Shares and Preferred Shares, free and clear of all liens, security interests,
claims, charges, equities, pledges, options and encumbrances of any kind.

 

Section 3.2. Authority. The Stockholder has full right, power and authority to
contribute, transfer, assign and convey to the Company the full legal and
beneficial ownership in the Common Shares and the Preferred Shares, as the case
may be, to be surrendered by the Stockholder pursuant to this Agreement and to
consummate the transactions contemplated herein. This Agreement has been duly
and validly executed and delivered by the Stockholder and is a legal, valid and
binding obligation of such Stockholder enforceable in accordance with its terms,
except as enforceability may be (i) limited by bankruptcy, insolvency or other
similar

 

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laws affecting the enforcement of creditor’s rights, or (ii) subject to general
principles of equity. Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby nor compliance with any
of the provisions hereof will (a) result in any conflict with, breach of, or
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of any agreement or other
instrument or obligation to which such Stockholder is a party or by which such
Stockholder or any of such Stockholder’s properties or assets may be bound, or
(b) violate any order, writ, injunction, judgment, decree, law, statute, rule or
regulation applicable to such Stockholder or any of such Stockholder’s
properties or assets. No action, consent or approval by, or filing with, any
Federal, state, municipal, foreign or other court or governmental or
administrative body or agency, or any other regulatory or self-regulatory body,
is required in connection with the execution and delivery by the Stockholder of
this Agreement or the consummation by such Stockholder of the transactions
contemplated hereby.

 

Section 3.3. Accredited Investor.

 

(a) Offering Exemption. The Stockholder acknowledges that the New Shares have
not been registered under the Securities Act of 1933, as amended (the
“Securities Act”), nor registered or qualified under any state securities laws,
and that they are being offered and sold pursuant to an exemption from such
registration and qualification based in part upon such Stockholder’s
representations contained herein.

 

(b) Knowledge of Offer. The Stockholder is familiar with the business and
operations of the Company and has been given the opportunity to obtain from the
Company all information that the Stockholder has requested regarding its
business plans and prospects.

 

(c) Knowledge and Experience; Ability to Bear Economic Risks. The Stockholder
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the investment contemplated by
this Agreement, and is able to bear the economic risk of this investment in the
Company (including a complete loss of the value of the New Shares a).

 

(d) Limitations on Disposition. The Stockholder recognizes that no public market
exists for the New Shares, and none may exist in the future. The Stockholder
acknowledges that it must bear the economic risk of this investment indefinitely
unless the Stockholder’s New Shares are registered pursuant to the Securities
Act, or an exemption from such registration is available, and unless the
disposition of such New Shares is qualified or registered under applicable state
securities laws or an exemption from such qualification or registration is
available, and that the Company has no present intention of so registering the
New Shares. The Stockholder acknowledges that there is no assurance that any
exemption from the Securities Act will be available, or, if available, that such
exemption will allow such Stockholder to transfer any or all of the New Shares,
in the amounts, or at the times the Stockholder might propose. The Stockholder
acknowledges that at the present time Rule 144 promulgated under the Securities
Act by the Securities and Exchange Commission is not applicable to sales of the
New Shares.

 

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(e) Accredited Investor. The Stockholder is an “accredited investor” as such
term is defined in Rule 501(a) promulgated under the Securities Act.

 

Section 3.4. Capacity. The Stockholder has full power and legal right to execute
and deliver this Agreement and to perform such Stockholder’s obligations
hereunder.

 

ARTICLE IV.

COVENANTS OF THE PARTIES

 

Section 4.1. Further Assurances. The Stockholder will execute and deliver, or
cause to be executed and delivered, such additional or further transfers,
assignments, endorsements and other instruments as the Company may reasonably
request for the purpose of effectively carrying out the transfer of the Common
Shares and the Preferred Shares and the other transactions contemplated by this
Agreement.

 

ARTICLE V.

MISCELLANEOUS PROVISIONS

 

Section 5.1. Notices. All communications under this Agreement shall be in
writing and shall be delivered by hand or facsimile or mailed by overnight
courier or by registered mail or certified mail, postage prepaid:

 

(a) if to the Company, at 735 Taylor Road, Suite 200, Gahanna, OH 43230
(facsimile: (614) 501-4299), marked for attention of Secretary, or at such other
address or facsimile number as may have been furnished to the Company in
writing, with a copy to Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New
York, NY 10019 (facsimile: (212) 728-9222), Attention: Steven J. Gartner, Esq.;

 

(b) if to the Stockholder, at 735 Taylor Road, Suite 200, Gahanna, OH 43230
(facsimile: (614) 501-4299), marked for attention of Chief Executive Officer, or
at such other address or facsimile as the Company may have furnished in writing
to each of the Stockholder.

 

Any notice so addressed shall be deemed to be given: if delivered by hand or
facsimile, on the date of such delivery, if a business day and delivered during
regular business hours, otherwise the first business day thereafter; if mailed
by courier, on the first business day following the date of such mailing; and if
mailed by registered or certified mail, on the third business day after the date
of such mailing.

 

Section 5.2. Amendments. The terms, provisions and conditions of this Agreement
may not be changed, modified or amended in any manner except by an instrument in
writing duly executed by the Company and the Stockholder.

 

Section 5.3. Assignment; Parties in Interest.

 

(a) Assignment. Neither this Agreement nor any of the rights, duties, or
obligations of any party hereunder may be assigned or delegated by any party
hereto except with the prior written consent of the Company and the Stockholder.

 

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(b) Parties in Interest. This Agreement shall not confer any rights or remedies
upon any Person other than the parties hereto and their respective permitted
successors and assigns.

 

Section 5.4. Expenses. All fees, costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such fees, costs and expenses. The Company shall pay any
liabilities (including interest and penalties) with respect to, or resulting
from any delay or failure, in paying, stamp and other taxes, if any, which may
be payable or determined to be payable on the execution and delivery of this
Agreement or acquisition of the New Shares pursuant to this Agreement.

 

Section 5.5. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof, supersedes
and is in full substitution for any and all prior agreements and understandings
among them relating to such subject matter, and no party shall be liable or
bound to the other party hereto in any manner with respect to such subject
matter by any warranties, representations, indemnities, covenants or agreements
except as specifically set forth herein. The Schedules to this Agreement are
incorporated herein and made a part hereof and are an integral part of this
Agreement.

 

Section 5.6. Descriptive Headings. The descriptive headings of the several
sections (including subsections) of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.

 

Section 5.7. Counterparts. For the convenience of the parties, any number of
counterparts of this Agreement may be executed by any one or more parties hereto
(including by facsimile), and each such executed counterpart shall be, and shall
be deemed to be, an original, but all of which shall constitute, and shall be
deemed to constitute, in the aggregate but one and the same instrument.

 

Section 5.8. Governing Law. This Agreement and the legal relations among the
parties hereto shall be governed by and construed in accordance with the laws of
the State of Delaware, applicable to contracts made and performed therein.

 

Section 5.9. Construction. The language used in this Agreement will be deemed to
be the language chosen by the parties to express their mutual intent, and no
rule of strict construction will be applied against any party.

 

Section 5.10. Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument. Furthermore, in lieu of any such
invalid, illegal or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar in
terms to such invalid, illegal or unenforceable provision as may be possible and
be valid, legal and enforceable.

 

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Section 5.11. Specific Performance. Without limiting or waiving in any respect
any rights or remedies of any party under this Agreement now or hereinafter
existing at law or in equity or by statute, each of the parties hereto shall be
entitled to seek specific performance of the obligations to be performed by the
other in accordance with the provisions of this Agreement.

 

Section 5.12. Survival of Provisions. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
shall survive the execution of this Agreement and the consummation of the
transactions contemplated by this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

 

EAGLE FAMILY FOODS HOLDINGS, INC.

By:

 

/s/ Craig Steinke

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Name:

 

Craig A. Steinke

Title:

 

Chief Executive Officer and President

/s/ Craig Steinke

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Craig A. Steinke

 

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SCHEDULE I

 

OWNERSHIP OF COMMON STOCK AND PREFERRED STOCK

 

Stockholder

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   Common
Stock

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   Series A
Preferred

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Craig A. Steinke

   40,835    990

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SCHEDULE II

 

PRE-TRANSACTION CAPITALIZATION

 

Stockholder

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   Common
Stock

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   Series A
Preferred

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   Series B
Preferred

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Warburg, Pincus Ventures, L.P.

   458,200    402,398.7735    49.5

GE Investment Private Placement Partners II, a Limited Partnership

   458,200    402,398.7735    49.5

Craig A. Steinke

   40,835    990.0000    —  

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SCHEDULE III

 

POST-TRANSACTION CAPITALIZATION

 

Stockholder

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   Common
Stock

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   Series I
Preferred

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Warburg, Pincus Ventures, L.P.

   621,542.50    —  

GE Investment Private Placement Partners II, a Limited Partnership

   621,542.50    —  

Dairy Farmers of America Inc.

   1,048,091.00    —  

Mid-Am Capital, L.L.C.

   —      150

Craig A. Steinke

   95,547.00    —