Exhibit 10.9


 


REDEMPTION
AGREEMENT


 


THIS
REDEMPTION AGREEMENT, (the “Agreement”) dated January 31,
2006, (the “Redemption Date) is made by and between Golden Grain Energy, LLC
(the “Company”), and Fagen Energy, LLC (“Fagen”) for the purpose of setting
forth the terms and conditions under which the Company shall redeem 3,000,000
of its Class A membership units (the “Units”) from Fagen.


 


WITNESSETH:


 


WHEREAS, Fagen
purchased the Units from Schwark Jensen Golden Grain, LLC (“Schwarck Jensen”),
pursuant to that certain Membership Purchase Agreement dated as of January 31,
2006(the “Schwarck Jensen Agreement”); and


 


WHEREAS, the Company desires to redeem, and Fagen
desires to have redeemed as of the Redemption Date, the Units pursuant to the
terms and conditions set forth below.


 


NOW,
THEREFORE, in consideration of the mutual promises and
covenants set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties do hereby
agree as follows:


 


SECTION
1


 


Redemption Price and Manner of Payment


 


1.1           Redemption
Price.   The redemption price (the “Redemption
Price”) for the Units shall be Two Dollars and Sixty Two and One-Half Cents ($2.625)
per Unit, or a total of Seven Million Eight Hundred Seventy Five Thousand
Dollars ($7,875,000).


 


1.2           Manner
of Payment.   Payment of the entire
Redemption Price by certified check or wire transfer of immediately available
funds delivered by the Company to Fagen within two (2) business days the
Redemption Date.


 


SECTION
2


 


REPRESENTATIONS
AND WARRANTIES OF COMPANY


 


The Company hereby makes
the following representations and warranties to Fagen, and agrees to carry out
the covenants and agreements hereinafter set forth:


 


2.1           Capitalization and Ownership of
Units.   The Company currently has 30,000,000
Class A Units authorized, of which 26,676,400 Class A units are presently
issued and outstanding, all of which outstanding Units are fully paid and
non-assessable and have been legally issued. There are no existing options,
calls or commitments of any character relating to any Units or to in any manner
issue any Units.


 


2.2           Organization.   The Company is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Iowa. The execution and delivery of this Agreement does not, and the
consummation of the transaction contemplated hereby will not, violate or breach
any provision of the Company’s Articles of Organization or Operating Agreement,
both as amended through the Redemption Date (the “Governing Documents”) or any
other agreements, whether


 

















 


written or oral, to or by
which the Company is bound. Any waiver of any provision or requirement
contained in the Governing Documents relating to this Agreement and/or the
Schwarck Jensen Agreement, and the transactions contemplated hereby and
thereby, has been properly and duly made and is legally binding and enforceable
against the Company in accordance with its terms.


 


2.3           Authorization and Binding
Obligation.   This Agreement constitutes
a legal, valid, and binding obligation of Company, enforceable against Company
in accordance with its terms.


 


2.4           Securities Laws.   The Units were not offered, sold or issued in
violation of the Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder (the “Securities Act”) and were and are
registered under the Securities Exchange Act of 1934, as amended, and all rules
and regulations promulgated thereunder (the “Exchange Act”). The Units were
offered, sold, issued and are registered under all applicable state securities
laws (the “Blue Sky Laws”). The redemption of the Units does not and will not
violate the Securities Act, the Exchange Act or any applicable Blue Sky Laws.


 


SECTION 3


 


REPRESENTATIONS AND WARRANTIES OF FAGEN


 


Fagen hereby makes the
following representations and warranties to the Company, and agrees to carry
out the covenants and agreements hereinafter set forth:


 


3.1           Organization, Standing and
Authority.   Fagen is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Minnesota. Fagen has the necessary power to execute, deliver, and
perform this Agreement and the documents contemplated hereby according to their
respective terms.


 


3.2           Authorization.   This Agreement constitutes a legal, valid,
and binding obligation of Fagen, enforceable against Fagen in accordance with
its terms.


 


3.3           Marketable Title.   Based solely and exclusively upon the
representations of Schwarck Jensen to Fagen in the Schwarck Jensen Agreement:
(a) Fagen has good and marketable title to the Units;  (b) the Units delivered by Fagen to the
Company shall be free and clear of all liens, charges, security interests and
encumbrances; (c) no person or entity other than Fagen has any right, title or
interest in or to the Units. Fagen has not transferred, sold or pledged the
Units or any right, title or interest therein since the Units were acquired
from Schwarck Jensen under the Schwarck Jensen Agreement.


 


3.4           Legal and Governmental Proceedings.
  Fagen is not subject to any order of
any court or governmental authority or agency and there are no legal actions or
governmental proceedings or investigations pending or, to the best of Fagen’s
knowledge, threatened, which would have a material adverse impact on Fagen or
would adversely affect the Company or Fagen’s ability to perform according to
the terms of this Agreement.


 


SECTION
4


 


DEFAULT


 


4.1           Default.   In the event Fagen defaults or is in breach
of its obligations under this Agreement by failing to consummate the redemption
as described herein, or fails to perform or observe


 


2

















 


any other term or
condition of this Agreement, then this Agreement shall be in default and the
Company shall be entitled to pursue all remedies available at law or in equity.


 


SECTION
5


 


ADDITIONAL
UNDERTAKINGS


 


5.1           Additional Instruments.   Each party to this Agreement shall execute
and deliver or use its best efforts to cause to be executed and delivered such
additional instruments and documents as any other party may reasonably request
for the purpose of carrying out this Agreement.


 


SECTION
6


 


SURVIVAL OF COVENANTS, REPRESENTATIONS AND

WARRANTIES


 


6.1           Covenants.   All covenants contained in this Agreement
shall survive Redemption Date.


 


6.2           Representations and Warranties.   All
representations and warranties contained in this Agreement shall be deemed
continuing representations and warranties and shall survive Redemption Date.


 


SECTION
7


 


INDEMNIFICATIONS


 


7.1           Indemnification by the Company.
  The Company shall indemnify and hold
Fagen harmless against and with respect to, and shall reimburse Fagen any and
all losses, liabilities or damages resulting from any untrue representation,
breach of warranty or nonfulfillment of any covenant by the Company contained
herein or in any certificate, document or instrument delivered to Fagen
hereunder as well as any losses, liabilities or damages resulting form or
related to Fagen’s acquisition of the Units pursuant to the Schwarck Jensen
Agreement and the redemption by the Company of the Units hereunder.


 


7.2           Indemnifications by Fagen.   Fagen
shall indemnify and hold the Company harmless against and with respect to, and
shall reimburse the Company for any and all losses, liabilities or damages
resulting from any untrue representation, breach of warranty or nonfulfillment
of any covenant by Fagen contained herein or in any certificate, document or
instrument delivered to the Company hereunder.


 


7.3           Attorneys’ Fees.   The
indemnity set forth in Sections 7.1 and 7.2 above shall include providing
reasonable attorneys’ fees and costs to the other party as required to enforce
the terms of said  indemnity.


 


7.4           Notices.   The Company and Fagen shall provide the other
with as much notice as possible of a potential claim pursuant to this Section.


 


3

















 


SECTION 8


 


MISCELLANEOUS


 


8.1           Notices.   Any notice or communication required or
performed hereunder shall be sufficiently given if sent by registered or
certified mail, postage prepaid to the following individuals:


 


	
  To
  Company:

  	
  Golden
  Grain Energy, LLC

  
	
   

  	
  1822
  43rd St. SW

  
	
   

  	
  Mason
  City, IA 50401

  
	
   

  	
   

  
	
  To Fagen:

  	
  Ron or Diane Fagen

  
	
   

  	
  501 West Highway 212

  
	
   

  	
  P.O. Box 159

  
	
   

  	
  Granite Falls, MN 56241

  



 


Any such notice
shall become effective on the third day after the day of mailing thereof,
postage prepaid, registered or certified mail.


 


8.2           Contents of Agreement.   This Agreement sets forth the entire
understanding of the parties and supersedes any prior agreement or
understanding relating to the subject matter of this Agreement. It shall be
changed or terminated only by an instrument executed by all parties hereto in
writing.


 


8.3           No Assignments.   No 
party may assign nor delegate any of 
its rights or obligations hereunder without first obtaining the written
consents of the other parties to this Agreement.


 


8.4           Binding on Successors.   All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors, personal representatives, heirs and permitted
assigns of the parties hereto.


 


8.5           Governing Law.   This
Agreement is being delivered and is intended to be performed in the State of Iowa
and shall be construed and enforced in accordance with the laws of the State of
Iowa.


 


8.6           Interpretation.   Wherever
used herein the masculine gender shall include the feminine and neuter genders,
and vice versa, as the context shall require. The paragraph headings are
included solely for convenience and shall in no event affect, or be used in
connection with, the interpretation of this Agreement.


 


8.7           Counterparts.   This Agreement may be executed in any number
of counterparts, including without limitation via facsimile or other electronic
means, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement shall become effective
at such time as counterparts thereof have been executed by each of the parties
and it shall not be a condition to its effectiveness that each of the parties
has executed the same counterpart.


 


8.8           Construction.   Each party hereto has had the opportunity to
fully negotiate the terms hereof and modify the draftsmanship of this Agreement.
Therefore, the terms of this Agreement shall not be construed and interpreted
with any presumption, inference or rule requiring construction or
interpretation of any provision of this Agreement against the interest of the
party causing this Agreement to be drafted.


 


4

















 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.


 


	
  COMPANY:

  
	
   

  
	
   

  	
  Golden Grain Energy,
  LLC

  
	
   

  
	
   

  
	
  By:

  	
   /s/ Walter Wendland

  	
   

  
	
  Its:

  	
   President

  	
   

  
	
   

  
	
   

  
	
  FAGEN:

  
	
   

  
	
   

  	
  Fagen Energy, LLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Diane Fagen

  	
   

  
	
  Its:

  	
  CEO & President

  	
   

  
					



 


5