Exhibit 10.1

UNIT REDEMPTION AGREEMENT

 

            This Unit Redemption Agreement (this “Agreement”) is made and
entered into as of June 2, 2010 (the “Effective Date”), by and between NATIONAL
BEEF PACKING COMPANY, LLC, a Delaware limited liability company (the “Company”),
and TKK INVESTMENTS, LLC, a Missouri limited liability company (“TKK”), and
TMKCo, LLC, a Missouri limited liability company (“TMK”).

 

            WHEREAS, TKK and TMK (collectively, the “Klein Entities”) desire
that the Company redeem certain Class B Units representing membership interests
in the Company.

 

            WHEREAS, the Company has agreed to redeem from the Klein Entities,
and the Klein Entities each agree to sell to the Company, such number of Class B
Units as set forth on Exhibit A (the “Class B Units”), on the terms and
conditions set forth in this Agreement (the “Redemption”).

 

            NOW, THEREFORE, the parties, intending to be legally bound hereby,
agree as follows:

 

1.         Redemption of Units.  The Company hereby agrees to redeem and accept
from each of the Klein Entities, and each of the Klein Entities hereby agrees to
sell, assign and transfer to the Company, all right, title and interest in and
to the Class B Units.  After the Redemption of the Class B Units under this
Agreement, the ownership of units of membership interests in the Company shall
be as provided on the amended Exhibit 3.1 attached as Exhibit B.

 

2.         Redemption Price.  As full consideration for the Redemption of the
Class B Units, the Company shall pay to TKK and TMK the amounts set forth
opposite the Member’s name on Exhibit A (the “Redemption Price”) for the
corresponding number of Class B Units set forth on Exhibit A.

 

3.         Closing.  The closing of the Redemption will take place on or before
June 3, 2010 or such other date as the parties may agree (the “Closing Date”).

 

4.         Amendment of Limited Liability Company Agreement.  Upon closing of
the Redemption, the National Beef Packing Company, LLC Limited Liability Company
Agreement dated August 6, 2003, as subsequently amended from time to time (the
“LLC Agreement”), shall be amended by deleting the Fourth Amended Exhibit 3.1
thereto in its entirety and inserting in lieu thereof the Fifth Amended Exhibit
3.1 attached hereto as Exhibit B.

 

5.         Representations and Warranties of the Members.  Each of the Klein
Entities hereby represents and warrants to the Company as of the Effective Date
and the Closing Date that:

 

(a)  The Class B Units to be redeemed hereunder are owned both of record and
beneficially by the applicable Klein Entity, free and clear of any lien, claim,
security interest or encumbrance whatsoever.

 

(b)  The Klein Entity has the full power and legal right and authority to
execute, deliver and perform this Agreement.

 

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(c)  This Agreement constitutes a valid and legally binding obligation of the
Klein Entity, enforceable in accordance with its terms.

 

(d)  The Redemption will vest in the Company good, marketable, legal and
equitable title in and to the Class B Units.

 

(e)  After the Redemption applicable Klein Entity will have the continuing right
to receive the allocation of profits and losses and corresponding distributions
related to the redeemed Class B Units calculated through the end of the calendar
quarter in which the Redemption occurs and prorated on a daily basis through the
Closing Date, which shall include distributions for tax purposes.

 

            These representations and warranties of each of the Klein Entities
will survive the Redemption.

 

6.         Waiver and Release. Upon payment in full of the Redemption Price,
each of the Klein Entities hereby waives and forever releases any and all rights
such Klein Entity may have under the LLC Agreement to obtain an appraisal or
other valuation of the Class B Units redeemed pursuant to this Agreement,
including the appraisal and sale rights pursuant to Sections 12.5.1 through
12.5.9 of the LLC Agreement.

 

7.         Severability.  To the extent that any provision of this Agreement is
determined to be invalid or unenforceable, the invalid or unenforceable portion
of the provision will be deleted from this Agreement, and the validity and
enforceability of the remainder of the provision and of this Agreement will be
unaffected.

 

8.         Headings and Captions.  The headings and captions in the sections,
paragraphs and clauses of this Agreement are inserted for convenience of
reference only and do not constitute a part of this Agreement.

 

9.         Benefit and Burden, No Assignment.  This Agreement shall inure to the
benefit of, and shall be binding upon, the parties and their successors’
interest and shall not be assigned to any other person or entity.

 

10.       Miscellaneous.  No change, modification or waiver of any provision of
this Agreement shall be valid unless the same is in writing and signed by the
parties.  This Agreement sets forth all agreements and representations of the
parties with respect to the subject matter of this Agreement, and any and all
prior agreements with respect to such subject matter are hereby revoked in favor
of this Agreement.  This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware, without regard to choice of law
provisions.

 

11.       Counterparts.  This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which
will constitute one and the same document.

 

[Signature Page Follows]

 

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

 

National Beef Packing Company, LLC

 

By:  /s/ Steven D. Hunt___________        

Print Name:  Steven D. Hunt

Title:  Chairman of the Board

 

TKK Investments, LLC

 

By:  /s/ Timothy M. Klein________

Print Name:  Timothy M. Klein

Title:  President

 

 

TMKCo, LLC

 

By:  /s/ Timothy M. Klein________

Print Name:  Timothy M. Klein

Title:  President

 

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Agreed To By:

 

U.S. Premium Beef, LLC

 

By: /s/ Steven D. Hunt                       

Print Name: Steven D. Hunt

Title: Chief Executive Officer

 

 

 

 

 

 

NBPCO HOLDINGS, LLC

 

By:   /s/ Eldon Roth____________________

Print Name:  Eldon Roth

Title:  President

 

 

                                                                                               

 

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Exhibit A

 

Members, Redeemed Class B Units and Redemption Price

 

 

Member

Redeemed Class B Units

Redemption Price

TKK Investments, LLC

82,315.5

$4,000,000

TMKCo, LLC

82,315.5

  4,000,000

 

 

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Exhibit B

 

Fifth Amended Exhibit 3.1 to LLC Agreement

 

Exhibit 3.1

 

Member

Class A Units

Contribution

Total Class
A %

Class B-1 Units

Contribution

Total Class
B-1 %

USPB

  94,680,681

$94,680,681.00

46.4143%

  10,664,475

$10,664,475.00

69.3340%

 

  55,841,342 (1)

$55,841,342.00

27.3745%

 

 

 

NBPCo

  31,553,956

$31,553,956.00

15.4684%

    3,810,044

$ 3,810,044.00

24.7706%

 

  19,642,729 (1)

$19,642,729.00

9.6293%

 

 

 

TKK

 

 

 

     760,542 (2)

$760,542

4.9446%

TMK

    2,271,428

$ 2,271,428.00

1.1135%

      146,256 (2)

$146,256

0.9509%

Total

203,990,136

$203,990,136.00

100%

15,381,317

$15,381,317

100%

 

 

(1)  The 55,841,342 new Class A Units held by USPB and 19,642,729 new Class A
Units held by NBPCo (referred to as “Class A1 Units”) have additional Class A
rights and preferences consisting of: (a) the Members agree that the Priority
Return under the Company’s limited liability company agreement under Section
5.7.2(b) shall be seven percent (7%) per annum for Class A1 Units rather than
five percent (5%) per annum; and (b) for purposes of determining Class B-1
ownership for liquidation or the redemption of Units, the Class A1 Units shall
be deemed converted to Class B-1 Units at a ratio of one (1) Class B-1 Unit for
29.8214 Class A1 Units and then shall remain Class A1 Units after the
determination.  Subject to lending covenants, the Board of Managers may redeem
capital, including Class A1 Units after making tax distributions.  Without any
redemption of Class A1 Units, the determination of Class B-1 ownership and
rights for purposes of a redemption or liquidation event would be as follows:

 

Members

New Class
B-1 Units

Total Class
B-1 Units

Total Class
B-1 %

TKK

 

760,542

4.2459%

TMK

 

146,256

0.8165%

Total Klein

 

906,798

5.0624%

 

 

 

 

USPB

1,872,526.0612

12,537,001.0612

69.9901%

NBPCo

658,679.0518

4,468,723.0518

24.9475%

 

                                                                                               

 

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(2)  For purposes of redemption or liquidation of the 760,542 Class B-1 Units
held by TKK Investments, LLC and the 146,256 Class B-1 Units held by TMKCo, LLC,
as part of the consideration paid to TKK Investments, LLC or TMKCo, LLC there
shall be paid by the Company a premium (“Non-Dilution Premium”).  The
Non-Dilution Premium shall be determined by agreement of the Company and TMKCo,
LLC and TKK Investments, LLC, which shall provide with the current Class B-1
Unit ownership, the Non-Dilution Premium will not exceed $4,323,902 and would be
up to $4.76832 per Class B-1 Unit that TMKCo, LLC and TKK Investments, LLC hold
after the redemption of Class B Units contemplated by this Agreement.

 

This Schedule 3.1 is hereby agreed to as the statement of the Members ownership
interests in the Company which shall amend the Company’s Limited Liability
Company Agreement (“LLC Agreement”) to the extent rights, restrictions and
preferences of the ownership interests are provided in this Schedule 3.1.  In
cases where the provisions of this Schedule 3.1 conflict with the LLC Agreement,
the provisions of this Schedule 3.1 shall control.

 

This Schedule 3.1 may be executed in counterparts with the effect of the
counterparts being considered as one executed document.

 

 

National Beef Packing Company, LLC

 

                                                                       

By Steven D. Hunt,

Its Chair

 

 

TKK Investments, LLC

 

                                                                       

By                                                                  

    Its                                                               

 

 

TMKCo, LLC

 

                                                                       

By                                                                   

     Its                                                              

 

U.S. Premium Beef, LLC

 

                                                                       

By Steven D. Hunt

Its CEO

 

 

NBPCO HOLDINGS, LLC

 

                                                                       

By                                                                   

     Its                                                              

 

                                                                                               

 

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