Exhibit 10.2


 


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.


 

















 


(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]


 


*   *  
*   *   *


 

















 


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

  



 


 


AGREED TO
BY:


 


	
  U.S.
  Premium Beef, LLC

  	
   

  	
  NBPCO
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Steven D. Hunt

  	
   

  	
  By:

  	
  /s/ Eldon Roth

  
	
  Print Name: Steven D. Hunt 

  	
   

  	
  Print Name: Eldon Roth

  
	
  Title: Chief Executive Officer

  	
   

  	
  Title: President

  
					



 

















 


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

  	
   

  
							



 

















 


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

  	
  %

  



 


(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

  	
   

  	
  U.S. Premium Beef, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By Steven D. Hunt,

  	
   

  	
  By Steven D. Hunt

  
	
  Its Chair

  	
   

  	
  Its CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TKK Investments, LLC

  	
   

  	
  NBPCO HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  By

  	
   

  
	
  Its

  	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TMKCo, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  
	
  Its