Contribution And Exchange Agreement

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:

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 . E ...