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** **

 

 

 

 

**Exhibit 10.2**

** **

**NATIONAL BEEFPACKING COMPANY, LLC**

** **

**UNIT REDEMPTIONAGREEMENT**

** **

**(Timothy Klein andAffiliates)**

** **

** **

            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, 25% of their aggregate Units in the Company, which Units are ofthe class and in the quantity as set forth opposite each Member’s name onExhibitA (the “Units”), on the terms and conditions set forth in this Agreement(the “Redemption”).

 

            WHEREAS, the Companyhas agreed to concurrently redeem all of the Units held by John R. Miller,French Basin Land & Cattle Co., LLC, and S-B Enterprises V, LLC (the“Miller, Smith 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 Miller, Smith Units, and further subject to the adoption of the amendment ofthe limited liability company agreement of the Company as provided in ExhibitC and Appraisal Process Agreement as provided in Exhibit D.  Afterthe Redemption of the Miller, Smith Units and the Units under this Agreement,the Members agree that the Unit ownership shall be as provided on the amendedExhibit 3.1 attached as Exhibit E, and upon Redemption, the rights ofthe Members for the appraisal and sale of the initial twenty-five percent oftheir units under Section 12.5.1 to Section 12.5.9 of the Company limitedliability company agreement shall be satisfied and extinguished through theRedemption.

 

            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 hereof (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.

 

 

 

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            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.

 

(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 have the continuing right to receive theallocation of profits and losses and corresponding distributions related to theredeemed Units calculated through the fiscal quarter and prorated on a dailybasis through the Closing Date, which shall include distributions for taxpurposes.

 

            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.

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*[Signature PageFollows]*

 

 

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

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| **NATIONAL BEEF PACKING COMPANY,LLC**                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| By:   /s/Steven D. Hunt                                                                                                                                                                                   |
| Print Name:     Steven D. Hunt                                                                                                                                                                                                                         |
| Title:    Chairman                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **THE****MEMBERS:**                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   /s/ Timothy M. Klein                                                                                                                                                                          |
| **Timothy M. Klein**                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **TKKINVESTMENTS, LLC**                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| By:    /s/Timothy M. Klein                                                                                                                                                                                               |
| Print Name:    Timothy M.Klein                                                                                                                                                                                                                                        |
| Title:                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| **TMKCo, LLC**                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| By:    /s/Timothy M. Klein                                                                                                                                                                                               |
| Print Name:    /s/ Timothy M.Klein                                                                                                                                                                                                                                                        |
| Title:                                                                       |

** **

 

 

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** **

**Agreed To By:**

** **

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

 

By:		  /s/ Steven D. Hunt                                   		

Print Name:		  Steven D. Hunt                           		

Title:		  CEO                                                     		

 

 

**NBPCO HOLDINGS, LLC**

 

By: 		  /s/ Eldon Roth                                         		

Print Name: 		  Eldon Roth                                 		

Title: 		  President                                              		

 

** **

** **

** ** | **S-B Enterprises V, LLC**

 

By: 		  /s/ Scott H. Smith                                        		

Print Name: 		  Scott H. Smith                                		

Title: 		  Manager                                                   		

 

** **

**French Basin Land & Cattle Co., LLC**

 

  /s/ John R. Miller                                                		

By		  John R. Miller                                               		

Its		                                                                       		

 

 

  /s/ John R. Miller                                                		

**John R. Miller** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

** **

** **

 

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**Exhibit A**

 

**Members; UnitsSubject to Redemption and Reallocation**

 

 

| **Member**           | **Units Subject to Redemption**                                                                                                                                                                                                                                                                                                                                 |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Timothy M. Klein     | 25%  of Class A and Class B Units held by Members collectively with consolidation  and reallocation of Class B-2 and Class C Units into Class B-1 Units for  purposes of the Redemption and with the retained ownership interests as  provided in the Fourth Amended Exhibit 3.1 to the LLC Agreement.  (Exhibit  E)

       |
| TKK Investments, LLC |
| TMKCo, LLC           |

 

 

 

 

A-1

 

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**Exhibit B**

 

**Redemption Price**

 

 

| **Member**           | **Redemption Price** |
|----------------------|----------------------|
| Timothy M. Klein     | $0                   |
| TKK Investments, LLC | $8,378,395.88        |
| TMKCo, LLC           | $3,029,249.85        |
|                 |                 |
|                 |                 |
|                 |                 |

 

 

 

 

 

 

 

B-1

 

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**Exhibit C**

 

**Redemption ofUnits**

 

 

Section 6.6 ofthe National Beef Packing Company, LLC Limited Liability Company Agreementshall be amended by adding a new paragraph immediately ahead of the lastnon-lettered paragraph of Section 6.6, which shall read:

 

Notwithstanding thegrant of authority to the Board of Managers pursuant to Section 7.14 andnotwithstanding other provisions of this Agreement, any modifications oralterations in the rights, preferences or privileges of any Class of Units heldby TKK Investments, LLC or TMKCo, LLC are subject to the consent of Klein asthe principal of TKK Investments, LLC and TMKCo, LLC, unless the Company treatsall Members, including TKK Investments, LLC and TMKCo, ratably based on theirholdings of the Class of Units.

 

 

 

 

 

 

 

 

 

 

C-1

 

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**Exhibit D**

 

**Appraisal ProcessAgreement**

 

 

**Agreement for Appraisal Process under Section 12.5.**

 

            In the event that TKKInvestments, LLC or TMKCo, LLC (each an “Appraisal Party” and collectively as“Appraisal Parties”) give an Appraisal Election Notice under Section 12.5.1 ofthe National Beef Packing Company, LLC Limited Liability Company Agreement(“LLC Agreement”) then each of the Appraisal Parties agree that the AppraisalValue under Section 12.5.3 of the LLC Agreement is the EBITDA of the Companymultiplied by six, minus the outstanding debt of the Company, with the EBITDAdetermined as the four quarter average of the trailing eight fiscal quartersdetermined from the most recent financial statements filed as the Company’sAnnual Report on Form 10-K, Quarterly Report on Form 10-Q, or auditor reviewedquarterly financial statements of the Company (in the preceding order ofpriority) prior to the date of the Appraisal Election Notice.  

 

**Agreement For Klein EntityLiquidation Value Prior To Appraisal Process**

 

**           **In the eventthat TKK Investments, LLC or TMKCo, LLC (the “Klein Entities”), are required tosell or liquidate some or all of the Units held by the Klein Entities prior toAugust 6, 2011 (the next Klein Entities appraisal process start date), theCompany agrees that the price for the Units held by the Klein Entities that arerequired to be sold or redeemed will not be less than the Appraisal Valueagreed to in the above paragraph for appraisal under Section 12.5, and theCompany will add to the price to be paid to the Klein Entities so that the saleor redemption price is not less than the Appraisal Value.

 

 

 

 

 

 

D-1

 

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**Exhibit E**

 

**Fourth AmendedExhibit 3.1 to LLC Agreement**

 

**Exhibit3.1**

 

 

| **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%            |   10,664,475.0                           | $10,664,475.00   | 68.5997%              |
| ** ** |   55,841,342 (1)        | $55,841,342.00   | 27.3745%            |                                          |             |                  |
| **NBPCo**  |   31,553,956            | $31,553,956.00   | 15.4684%            |     3,810,044.0                | $ 3,810,044.00   | 24.5083%              |
| ** ** |   19,642,729 (1)        | $19,642,729.00   | 9.6293%             |                                          |             |                  |
| **TKK**    |                         |             |                |       842,857.5  (2) | $842,857.50      | 5.4217%               |
| **TMK**    |     2,271,428 | $ 2,271,428.00   | 1.1135%             |       228,571.5  (2) | $228,571.50      | 1.4703%               |
| **Total**  | 203,990,136                  | $203,990,136.00  | 100%                | 15,545,948.0                                  | $15,545,948.00   | 100%                  |

 

 

(1)  The 55,841,342new 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 andpreferences consisting of: (a) the Members agree that the Priority Return underthe Company limited liability company agreement under Section 5.7.2(b) shall beseven 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 forliquidation or the redemption of Units, the Class A1 Units shall be deemedconverted to Class B-1 Units at a ratio of one (1) Class B-1 Unit for 29.8214Class 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 redemptionof Class A1 Units, the determination of Class B-1 ownership and rights forpurposes 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**         |                    | 842,857.5                  | 4.6626%               |
| **TMK**         |                    | 228,571.5                  | 1.2644%               |
| **Total Klein** |                    | 1,071,429.0                | 5.9270%               |
| ** **      |                    |                       |                  |
| **USPB**        | 1,872,526.0612          | 12,537,001.0612            | 69.3527%              |
| **NBPCo**       |   658,679.0518     | 4,468,723.0518             | 24.7203%              |

 

(2)  For purposes ofredemption or liquidation of the 842,857.5 Class B-1 Units held by TKKInvestments, LLC and the 228,571.5 Class B-1 Units held by TMKCo, LLC, as partof the consideration paid to TKK Investments, LLC or TMKCo, LLC there shall bepaid by the Company a premium (“Non-Dilution Premium”).  The Non-DilutionPremium shall be determined by agreement of the Company and TMKCo, LLC and TKKInvestments, LLC, which shall provide with the current Class B-1 Unitownership, the Non-Dilution Premium will not exceed $4,323,902 and would be upto $4.03564 per Class B-1 Unit that TMKCo, LLC and TKK Investments, LLC hold afterthe initial twenty-five percent (25%) redemption on April 13, 2009.

 

 

E-1

 

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This Schedule 3.1 is herebyagreed to as the statement of the Members ownership interests in the Companywhich shall amend the Company Limited Liability Company Agreement (“LLC Agreement”)to the extent rights, restrictions and preferences of the ownership interestsare provided in this Schedule 3.1.  In cases where the provisions of thisSchedule 3.1 conflict with the LLC Agreement, the provisions of this Schedule3.1 shall control.

 

This Schedule 3.1 may be executedin counterparts with the effect of the counterparts being considered as oneexecuted document.

 

 

| **National Beef Packing Company, LLC**

 

  /s/ Steven D. Hunt                                         		

By Steven D. Hunt,

Its Chair

 

 

**Timothy M. Klein**

 

  /s/ Timothy M. Klein                                      		

Timothy M. Klein

 

 

**TKK Investments, LLC**

 

  /s/ Timothy M. Klein                                      		

By		                                                                 		

    Its		                                                              		

 

 

**TMKCo, LLC**

 

  /s/ Timothy M. Klein                                       		

By		                                                                  		

     Its		                                                             		

  | **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                                              |
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E-2