** **

** **

 

**Exhibit 10.3**

** **

**NATIONAL BEEFPACKING COMPANY, LLC**

** **

**UNIT REDEMPTIONAGREEMENT**

** **

**(John Miller andAffiliates; Scott Smith Affiliate)**

** **

** **

            This Unit RedemptionAgreement (this “Agreement”) is made and entered into as of April 13, 2009 (the“Effective Date”), by and between NATIONAL BEEF PACKING COMPANY, LLC, aDelaware limited liability company (the “Company”), and each of the unitholders identified on Exhibit A hereto (each a “Member” and,collectively, the “Members”).

 

            WHEREAS, the Membersand the Company have entered into the Liquidity Option Appraisal, Sale ProcessStay Agreement dated February 2, 2009 as amended by the First Amendment datedas of March 17, 2009 and the Second Amendment dated as of March 31, 2009(collectively as amended the “Stay”), pursuant to which the parties have agreedto temporarily stay the Appraisal and Unit Sale Process (as defined in theStay) so that the parties could negotiate, execute and close on this Agreement.

 

            WHEREAS, the Companyhas agreed to redeem from the Members, and the Members each agree to sell tothe Company, all of their Units in the Company, which Units are of the classand in the quantity as set forth opposite each Member’s name on Exhibit A(the “Units”), on the terms and conditions set forth in this Agreement (the“Redemption”).

 

            WHEREAS, the Companyhas concurrently agreed to redeem 25% of the Units in the Company held byTimothy M. Klein, TKK Investments, LLC, and TMKCo, LLC (the “Klein Units”).

 

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

 

            1.        Redemptionof Units.  The Company hereby agrees to redeem and accept from each Member,and each Member hereby agrees to sell, assign and transfer to the Company, allright, title and interest in and to the Units and the Stay shall be extendedand continued until the Closing Date as defined below, subject to the Companyobtaining adequate financing to pay the Members for the Units and to pay forthe Klein Units.  Upon redemption of the Units, which are all of the Units heldby Member in the Company, Member will no longer be a Member of the Company.

 

            2.        RedemptionPrice.  As full consideration for the Redemption of the Units, the Companyshall pay to each Member the amount set forth opposite the Member’s name onExhibitB (the “Redemption Price”), in accordance the schedule set forth onExhibitB.

 

            3.        Closing. The closing of the Redemption will take place on or before April 30, 2009 (the“Closing Date”); provided, however, if the closing does not take place by theClosing Date, then the parties agree that this Agreement and the Stay shallterminate and the Members shall be entitled to resume the Appraisal and UnitSale Process.

 

            4.        Representationsand Warranties of the Members.  Each Member hereby represents and warrantsto the Company as of the Effective Date and the Closing Date that:

 

(a) The Member’s Units are owned both of record and beneficially by the Member,free and clear of any lien, claim, security interest or encumbrance whatsoever.

 

 

 

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(b) The Member has the full power and legal right and authority to execute, deliverand perform this Agreement.

 

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

 

(d) The Redemption will vest in the Company good, marketable, legal and equitabletitle in and to the Units.

 

(e) After the Redemption the Member will own no other Units in the Company,however, the Member will have the continuing right to receive the allocation ofprofits and losses and corresponding distributions, related to the Unitscalculated through the fiscal quarter and prorated on a daily basis through theClosing Date, which shall include the distributions for tax purposes.

 

            These representationsand warranties of each Member will survive the Redemption.

 

5.        Waiverand Release. Upon payment in full of the Member’s Redemption Price to theMember as provided in Exhibit B, the Member hereby waives and foreverreleases any and all rights the Member may have under the Company’s LimitedLiability Agreement (“LLC Agreement”) to obtain an appraisal or other valuationof the Units (the Units are those subject to Redemption under Exhibit A),including the appraisal and sale rights pursuant to Sections 12.5.1 through12.5.9 of the LLC Agreement. 

 

            6.        Severability. To the extent that any provision of this Agreement is determined to be invalidor unenforceable, the invalid or unenforceable portion of the provision will bedeleted from this Agreement, and the validity and enforceability of theremainder of the provision and of this Agreement will be unaffected.

 

            7.        Headingsand Captions.  The headings and captions in the sections, paragraphs andclauses of this Agreement are inserted for convenience of reference only and donot constitute a part of this Agreement. 

 

8.        Benefitand Burden; No Assignment.  This Agreement shall inure to the benefit of,and shall be binding upon, the parties and their successors’ interest and shallnot be assigned to any other person or entity.

 

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

 

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

 

*[Signature PageFollows]*

 

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

 

| **NATIONAL BEEF PACKING COMPANY,LLC**                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| By:			  /s/Steven D. Hunt                                                                                                                                                                                   |
| Print Name:			  Steven D. Hunt                                                                                                                                                                                                                           |
| Title: 			  Chairman                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **THE****MEMBERS:**                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   /s/ John R. Miller                                                                                                                                                     |
| **John R. Miller**                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **FRENCH BASIN LAND & CATTLECO., LLC**                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| By: 			  /s/John R. Miller                                                                                                                                                                        |
| Print Name: 			  John R. Miller                                                                                                                                                                                                           |
| Title: 			                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| **S-B ENTERPRISES V, LLC**                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Signature:			  /s/Scott H. Smith                                                                                                                                                                                                                    |
| Print Name: 			  Scott H. Smith                                                                                                                                                                                                                |
| Title: 			  Manager                                                                                                                             |

 

 

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** **

**Agreed To By:**

** **

| **U.S. Premium Beef, LLC**

 

  /s/ Steven D. Hunt                                         		

By Steven D. Hunt

Its CEO

 

** **

**NBPCO HOLDINGS, LLC**

 

  /s/ Eldon Roth                                                		

By		  Eldon Roth                                               		

Its		  President                                                  		

 

 

**Timothy M. Klein**

 

  /s/ Timothy M. Klein                                      		

Timothy M. Klein

** ** | **TKK Investments, LLC**

 

  /s/ Timothy M. Klein                                        		

By		  Timothy M. Klein                                       		

Its		                                                                    		

 

** **

**TMKCo, LLC**

 

  /s/ Timothy M. Klein                                        		

By		  Timothy M. Klein                                       		

Its		                                                                    		

** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

 

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**Exhibit A**

 

**Members; UnitsSubject to Redemption**

 

 

| **Member**                               | **Units Subject to Redemption**    |
|------------------------------------------|------------------------------------|
|                                     | **Class A**                        | **Class B-1** | **Class B-2** | **Class C** |
| John R. Miller                           |      6,057,143 |   |      609,524 | 609,524 |
| French Basin Land &  Cattle Co., LLC |                               | 2,247,619 |   |   |
| S-B Enterprises V, LLC                   |      1,514,286 | 714,286 |      |   |

 

 

 

 

A-1

 

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**Exhibit B**

 

**Redemption Price**

 

| **Member**                               | **Redemption Price** |
|------------------------------------------|----------------------|
| John R. Miller                           | $24,233,999.83       |
| French Basin Land &  Cattle Co., LLC | $67,027,137.20       |
| S-B Enterprises V, LLC                   | $22,815,291.96       |
|                                     |                 |
|                                     |                 |

 

 

 

 

B-1