Exhibit 10.1

Execution Version

 

 

 

PURCHASE AND SALE AGREEMENT

by and among

NBM US HOLDINGS, INC.,

LEUCADIA NATIONAL CORPORATION,

NBPCO HOLDINGS, LLC,

LEUCADIA NATIONAL CORPORATION, AS THE SELLERS’ REPRESENTATIVE,

NATIONAL BEEF PACKING COMPANY, LLC

and

MARFRIG GLOBAL FOODS S.A.

Dated as of April 9, 2018

 

 

 

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TABLE OF CONTENTS

 

             

Page

 

ARTICLE I DEFINITIONS

     1    

Section 1.1.

  

Definitions

     1  

ARTICLE II PURCHASE AND SALE

     1    

Section 2.1.

  

Purchase and Sale of the Purchased Interests

     1    

Section 2.2.

  

Closing

     2    

Section 2.3.

  

Transactions to be Effected at the Closing

     2    

Section 2.4.

  

Adjustment to Purchase Price

     4    

Section 2.5.

  

Intended Tax Treatment; Allocation

     7    

Section 2.6.

  

Withholding

     8    

Section 2.7.

  

Imputed Interest

     8  

ARTICLE III REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS

     8    

Section 3.1.

  

Organization and Existence

     8    

Section 3.2.

  

Authority and Enforceability

     8    

Section 3.3.

  

Noncontravention

     9    

Section 3.4.

  

Legal Proceedings

     9    

Section 3.5.

  

Capitalization

     9    

Section 3.6.

  

Brokers

     9    

Section 3.7.

  

Disclaimer of Warranties

     9  

ARTICLE IV REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY

     10    

Section 4.1.

  

Organization and Existence

     10    

Section 4.2.

  

Authority and Enforceability

     11    

Section 4.3.

  

Capitalization of the Company Entities

     11    

Section 4.4.

  

Noncontravention

     11    

Section 4.5.

  

Financial Statements

     12    

Section 4.6.

  

Absence of Undisclosed Liabilities

     12    

Section 4.7.

  

Absence of Changes

     12    

Section 4.8.

  

Material Contracts

     13    

Section 4.9.

  

Assets; Real Property

     14    

Section 4.10.

  

Intellectual Property

     15  

 

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TABLE OF CONTENTS

(continued)

 

             

Page

   

Section 4.11.

  

Litigation

     17    

Section 4.12.

  

Compliance with Laws; Consents

     17    

Section 4.13.

  

Environmental Matters

     18    

Section 4.14.

  

Employees; Labor Matters

     18    

Section 4.15.

  

Employee Benefit Plans and Related Matters; ERISA

     20    

Section 4.16.

  

Taxes

     22    

Section 4.17.

  

Insurance

     25    

Section 4.18.

  

Customers and Suppliers

     25    

Section 4.19.

  

Accounts Receivable

     25    

Section 4.20.

  

Inventories

     26    

Section 4.21.

  

Food Safety

     26    

Section 4.22.

  

Affiliate Transactions; Guaranties

     27    

Section 4.23.

  

Brokers

     27    

Section 4.24.

  

Disclaimer of Warranties

     27  

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER

     28    

Section 5.1.

  

Organization and Existence

     28    

Section 5.2.

  

Authority and Enforceability

     28    

Section 5.3.

  

Noncontravention

     28    

Section 5.4.

  

Legal Proceedings

     28    

Section 5.5.

  

Financing

     29    

Section 5.6.

  

Investment Matters

     29    

Section 5.7.

  

Brokers

     30    

Section 5.8.

  

Independent Investigation

     30  

ARTICLE VI COVENANTS

     30    

Section 6.1.

  

Conduct of Business

     30    

Section 6.2.

  

Access to Information

     32    

Section 6.3.

  

Financial Statements

     33    

Section 6.4.

  

Exclusivity

     33    

Section 6.5.

  

Confidentiality; Publicity

     33    

Section 6.6.

  

Expenses

     33  

 

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TABLE OF CONTENTS

(continued)

 

             

Page

   

Section 6.7.

  

Governmental Filings

     34    

Section 6.8.

  

Further Actions; Financing

     36    

Section 6.9.

  

R&W Insurance Policy

     37    

Section 6.10.

  

Further Assurances

     38  

ARTICLE VII CLOSING CONDITIONS

     38    

Section 7.1.

  

The Buyer’s Conditions to Closing

     38    

Section 7.2.

  

The Sellers’ Conditions to Closing

     39    

Section 7.3.

  

Mutual Conditions to Closing

     40  

ARTICLE VIII TAX MATTERS

     40    

Section 8.1.

  

Tax Returns

     40    

Section 8.2.

  

Allocation of Straddle Period Taxes

     41    

Section 8.3.

  

Transfer Taxes

     41  

ARTICLE IX TERMINATION

     41    

Section 9.1.

  

Grounds for Termination

     41    

Section 9.2.

  

Effect of Termination

     43    

Section 9.3.

  

Deposit.

     43  

ARTICLE X INDEMNIFICATION

     45    

Section 10.1.

  

Indemnification by the Sellers

     45    

Section 10.2.

  

Indemnification by the Buyer

     46    

Section 10.3.

  

Certain Limitations

     46    

Section 10.4.

  

Payment Adjustments

     48    

Section 10.5.

  

Indemnification Procedures

     48    

Section 10.6.

  

Survival.

     50  

ARTICLE XI MISCELLANEOUS

     51    

Section 11.1.

  

Notices

     51    

Section 11.2.

  

Severability

     52    

Section 11.3.

  

Entire Agreement; No Third-Party Beneficiaries

     53    

Section 11.4.

  

Governing Law

     53    

Section 11.5.

  

Consent to Jurisdiction; Waiver of Jury Trial

     53    

Section 11.6.

  

Right to Specific Performance

     54  

 

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TABLE OF CONTENTS

(continued)

 

             

Page

   

Section 11.7.

  

Assignment

     54    

Section 11.8.

  

Headings

     54    

Section 11.9.

  

Construction

     54    

Section 11.10.

  

Amendments and Waivers

     55    

Section 11.11.

  

Schedules and Exhibits

     55    

Section 11.12.

  

Counterparts

     56    

Section 11.13.

  

Financing Sources

     56    

Section 11.14.

  

Guarantee

     56    

Section 11.15.

  

Sellers’ Representative.

     58  

 

Appendix A

  

Definitions

Schedule A

  

Currently Owned Units, Purchased Interests and Pro-Rata Shares

Exhibit A

  

Assignment of Purchased Interests

Exhibit B

  

A&R Operating Agreement

 

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PURCHASE AND SALE AGREEMENT, dated as of April 9, 2018 (this “Agreement”), is
entered into by and among NBM US Holdings, Inc., a Delaware corporation (the
“Buyer”), Marfrig Global Foods S.A., a Brazilian corporation (sociedade por
ações) (the “Guarantor”), Leucadia National Corporation, a New York corporation
(“Leucadia”), NBPCo Holdings, LLC, a South Dakota limited liability company
(“NBPCo” and together with Leucadia, the “Sellers”), Leucadia, in its capacity
as the Sellers’ Representative hereunder (in such capacity, the “Sellers’
Representative”), and National Beef Packing Company, LLC, a Delaware limited
liability company (the “Company”). The Buyer, the Sellers, the Sellers’
Representative and the Company are each referred to herein individually as a
“Party” and, collectively, as the “Parties”.

RECITALS

WHEREAS, the Sellers own certain of the 10,683.14 issued and outstanding Units
of the Company, in each case, as set forth on Schedule A under the heading
“Currently Owned Units” opposite each Seller’s name;

WHEREAS, each Seller desires to sell to the Buyer, and the Buyer desires to
purchase from such Seller, upon the terms and conditions set forth in this
Agreement, certain Units of the Company representing 51% of the total issued and
outstanding Equity Securities of the Company in the aggregate, in each case, as
set forth on Schedule A under the heading “Purchased Interests” opposite such
Seller’s name (the “Purchased Interests”); and

WHEREAS, simultaneously with the execution hereof, the Guarantor has deposited
with The Bank of New York Mellon (the “Escrow Agent”) an amount equal to
$150,000,000 (the “Deposit”), to be held by the Escrow Agent and the Sellers’
Representative, as applicable, in accordance with this Agreement and the Escrow
Agreement, dated as of the date hereof, by and between the Guarantor and the
Sellers’ Representative (the “Escrow Agreement”).

NOW THEREFORE, in consideration of the foregoing premises and the respective
representations and warranties, covenants and agreements contained herein, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1.    Definitions. Capitalized terms used in this Agreement have the
meanings ascribed to them in Appendix A hereto.

ARTICLE II

PURCHASE AND SALE

Section 2.1.    Purchase and Sale of the Purchased Interests.

(a)        Upon the terms and subject to the conditions set forth in this
Agreement and subject to Section 2.1(b), at the Closing, each Seller will sell,
transfer and deliver to the Buyer, and the Buyer will purchase from such Seller,
the Purchased Interests set forth on Schedule A

 

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under the heading “Purchased Interests” for an aggregate amount equal to (a) the
Purchase Price, minus (b) an amount equal to (i) 51%, multiplied by (ii) the
amount (if any) by which Estimated Closing Net Indebtedness exceeds Target
Closing Net Indebtedness, minus (c) an amount equal to (i) the Deposit, plus
(ii) the Deposit Interest if (A) the Deposit is held by the Sellers’
Representative on the Closing Date in accordance with Section 9.3(c) or (B) the
Deposit is for any reason still held by the Escrow Agent on the Closing Date
((a) minus (b) minus (c) being the “Closing Amount”). For the avoidance of
doubt, if Estimated Closing Net Indebtedness is less than or equal to Target
Closing Net Indebtedness, the Purchase Price will not be adjusted pursuant to
paragraph (b) of this Section 2.1.

(b)        In the event that any of the conditions set forth in Article VII
shall fail to be satisfied due to any action, or failure to act, by NBPCo,
Leucadia shall be entitled to cure such failure of such condition in accordance
with Section 9.1(b) on behalf of NBPCo. Without limiting the foregoing, in the
event that NBPCo, as Seller, fails to tender any of its Units contemplated by
Schedule A to be sold to the Buyer at the Closing (such Units, the “Missing
Units”), then Leucadia shall be required to sell, transfer and deliver to the
Buyer, and the Buyer shall be required to purchase from Leucadia, on the same
terms as the other Purchased Interests to be purchased from Leucadia, additional
Units owned by Leucadia (beyond those contemplated on Schedule A to be so sold
by Leucadia to the Buyer at the Closing) in an amount equal to the Missing Units
(such additional units, the “Shortfall Units”) such that Buyer receives at the
Closing, in the aggregate, the same number of Purchased Interests contemplated
to be purchased by Buyer from all Sellers pursuant to Section 2.1(a) for the
Purchase Price. As used in this Agreement the term “Purchased Interests” shall
include any Shortfall Units if any Shortfall Units are sold pursuant to this
Section 2.1(b). If Leucadia sells and Buyer purchases such Shortfall Units as
required by this Section 2.1(b), the Buyer shall have no obligation to NBPCo in
any manner with respect to any Missing Units, and shall not be required to
purchase any Missing Units from NBPCo.

Section 2.2.    Closing. The closing of the Transactions contemplated by
Section 2.1 of this Agreement (the “Closing”) shall take place at 10:00 a.m.,
Eastern time, at the offices of Morgan, Lewis & Bockius LLP, 101 Park Avenue,
New York, New York 10178 on the date that is three Business Days following the
satisfaction or waiver of the conditions set forth in Article VII (other than
those conditions that by their nature are to be satisfied at the Closing, but
subject to the satisfaction or waiver of those conditions at the Closing), or at
such other time, date and place as may be mutually agreed upon in writing by the
Parties (the date on which the Closing actually occurs being referred to as the
“Closing Date”). The Closing will be deemed effective as of 12:01 a.m. Eastern
Time on the Closing Date.

Section 2.3.    Transactions to be Effected at the Closing.

(a)        At the Closing, the Buyer will:

(i)        pay to each Seller (by wire transfer of immediately available funds
in U.S. dollars to such account or accounts specified by the Sellers’
Representative to the Buyer at least three Business Days prior to the Closing)
an amount equal to (A) the Closing Amount, multiplied by (B) such Seller’s
Pro-Rata Share;

 

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(ii)        instruct the Escrow Agent to release the Deposit and the Deposit
Interest to the Sellers’ Representative (on behalf of the Sellers in proportion
to their respective Pro-Rata Shares) if the Deposit is still held by the Escrow
Agent on the Closing Date;

(iii)        deliver to the Sellers’ Representative and the Company a
counterpart signature page to the A&R Operating Agreement, duly executed by the
Buyer;

(iv)        deliver to the Sellers’ Representative and the Company a guarantee
for certain of the Buyer’s obligations under the A&R Operating Agreement, in
form and substance reasonably satisfactory to the Sellers’ Representative, duly
executed by the Guarantor;

(v)        deliver to the Sellers’ Representative a copy of the R&W Insurance
Policy; and

(vi)        deliver to the Sellers’ Representative all other documents,
instruments or certificates required to be delivered by the Buyer at or prior to
the Closing pursuant to Section 7.2.

(b)        At the Closing, the Sellers’ Representative will:

(i)        deliver to the Buyer an instrument of assignment or other instrument
of transfer in the form attached hereto as Exhibit A, duly executed by each
Seller, for transfer and sale of the applicable Purchased Interests to the
Buyer, in each case free and clear of any Liens (other than Liens (A) arising
pursuant to, or as a result of, the Transactions, (B) arising under the
Organizational Documents of the Company and (C) arising pursuant to applicable
securities Laws);

(ii)        with respect to each Seller, deliver to the Buyer an executed
certificate of such Seller’s non-foreign status under Section 1.1445-2(b)(2) of
the Treasury Regulations, in form and substance reasonably satisfactory to the
Buyer, duly executed by such Seller;

(iii)        with respect to each Seller, deliver to the Buyer an executed
affidavit stating, under penalties of perjury, for purposes of Section 1446(f)
of the Code (and reflecting any binding guidance then available as to such
affidavit), such Seller’s U.S. taxpayer identification number and that such
Seller is not a foreign person, in form and substance reasonably satisfactory to
the Buyer, duly executed by such Seller;

(iv)        with respect to each Seller, deliver to the Buyer a properly
completed IRS Form W-9 Request for Taxpayer Identification Number and
Certification, confirming that such Seller is not subject to backup withholding;

(v)        deliver to the Buyer and the Company counterpart signature pages to
the A&R Operating Agreement, duly executed by each Seller; and

(vi)        deliver to the Buyer all other documents, instruments or
certificates required to be delivered by the Sellers at or prior to the Closing
pursuant to Section 7.1.

 

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(c)        At the Closing, the Company will deliver to the Buyer and the
Sellers’ Representative counterpart signature pages to the A&R Operating
Agreement, duly executed by the Company, USPB and New Kleinco.

Section 2.4.    Adjustment to Purchase Price.

(a)        Not later than three Business Days prior to the Closing Date, the
Sellers’ Representative shall provide the Buyer with a written statement (the
“Estimated Statement”) reflecting the Sellers’ Representative’s good faith
estimate of the Net Indebtedness of the Company Entities as of 11:59 p.m.,
Eastern time, on the day immediately prior to the Closing Date (the “Estimated
Closing Net Indebtedness”). Each of the Estimated Statement and, following the
Closing, as required to be delivered by Section 2.4(b), the Closing Statement,
shall be prepared and calculated in accordance with this Agreement and GAAP;
provided, that in the event of any conflict between the accounting principles
contained in this Agreement and GAAP, the accounting principles contained in
this Agreement, including the definition of Indebtedness, shall control. Upon
receipt of the Estimated Statement, the Buyer and the Sellers’ Representative
shall use their commercially reasonable efforts to reach agreement on the amount
of the Estimated Closing Net Indebtedness. If any disagreement cannot be
resolved prior to the Closing Date, the Estimated Statement shall be used to
determine the Closing Amount to be paid at Closing. If the Buyer and the
Sellers’ Representative are able to agree on any adjustments to the Estimated
Statement prior to the Closing Date, the Estimated Statement shall be adjusted
to reflect such amendments and such revised Estimated Statement shall be used to
determine the Closing Amount to be paid at Closing.

(b)        As promptly as practicable, but no later than 30 days after the
Closing Date, the Buyer shall cause to be prepared and delivered to the Sellers’
Representative a statement (the “Closing Statement”) reflecting the Net
Indebtedness of the Company Entities as of 11:59 p.m., Eastern time, on the day
immediately prior to the Closing Date (the “Closing Net Indebtedness”). The
Sellers shall cooperate with and reasonably assist the Buyer and its
Representatives in the preparation of the Closing Statement and shall provide
the Buyer and its Representatives with any information reasonably requested by
the Buyer or its Representatives that is necessary for the preparation of the
Closing Statement. If the Buyer fails to timely deliver the Closing Statement by
no later than 30 days after the Closing Date, then the Closing Net Indebtedness
shall be deemed to be equal to Estimated Closing Net Indebtedness.

(c)        During the 15-day period following receipt of the Closing Statement
by the Sellers’ Representative, the Sellers’ Representative and its
Representatives shall have the right, upon reasonable notice to the Company and
the Buyer, to reasonable access to the Company Entities’ books and records,
appropriate staff members and such other information as the Sellers’
Representative shall reasonably request in order to review the Closing
Statement. The Closing Statement delivered by the Buyer to the Sellers’
Representative shall be conclusive, final and binding on all Parties unless the
Sellers’ Representative, prior to the 15th day following receipt of the Closing
Statement, delivers a notice to the Buyer stating that the Sellers’
Representative disagrees with such calculation and specifying in reasonable
detail (i) those items and amounts as to which the Sellers’ Representative
disagrees and the basis therefor and (ii) the Sellers’ Representative’s
alternative calculation for each item and amount as to which the Sellers’
Representative disagrees (any such notice, a “Dispute Notice”). The Sellers’
Representative shall

 

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be deemed to have agreed with all other items and amounts contained in the
Closing Statement that are not the subject of a Dispute Notice.

(d)        If a Dispute Notice is duly delivered pursuant to Section 2.4(c), the
Sellers’ Representative and the Buyer shall, during the 10 days following such
delivery, use their commercially reasonable efforts to reach agreement on the
disputed items or amounts in order to determine, as may be required, the amount
of Closing Net Indebtedness. If during such period, the Sellers’ Representative
and Buyer are unable to reach such agreement, they shall promptly thereafter
cause a nationally recognized independent accounting firm mutually agreed upon
by the Buyer and the Sellers’ Representative, which agreement shall not be
unreasonably withheld, conditioned, or delayed (the “Independent Accountant”),
to review this Agreement and the unresolved disputed items and amounts set forth
in the Dispute Notice for the purpose of calculating the Closing Net
Indebtedness. Each Party agrees to execute, if requested by the Independent
Accountant, a reasonable engagement letter. The Buyer and the Sellers’
Representative shall cooperate with the Independent Accountant and promptly
provide, and shall cause the Company to provide, all documents and information
reasonably requested by the Independent Accountant. In making such calculation,
the Independent Accountant shall consider only the unresolved items and amounts
in the Closing Statement as to which the Sellers’ Representative has
specifically disagreed in its Dispute Notice. The Independent Accountant’s
determination on each item in dispute shall not be greater than the greater
value for such item claimed by either the Sellers’ Representative or the Buyer
or less than the lower value for such item claimed by either the Sellers’
Representative or the Buyer in the Closing Statement or Dispute Notice,
respectively. The Sellers’ Representative and the Buyer shall direct the
Independent Accountant to deliver to the Sellers’ Representative and the Buyer,
as promptly as practicable (but in any case no later than 20 days from the date
of its engagement), a report setting forth such calculation; provided, that the
failure by the Independent Accountant to deliver its report within the time
period set forth herein shall not render the determination of the Independent
Accountant invalid nor shall it be a basis for either Party seeking to overturn
any determination rendered by the Independent Accountant. Such report shall be
final and binding upon the Parties absent manifest error, shall be deemed a
final arbitration award that is binding on Parties, and no Party shall seek
further recourse to courts or other tribunals, other than to enforce such
report. The Independent Accountant will determine the allocation of the cost of
its review and report based on the inverse of the percentage its determination
(before such allocation) bears to the total amount of the total items in dispute
as originally submitted to Independent Accountant. For example, should the items
in dispute total in amount to $1,000 and the Independent Accountant awards $600
in favor of the Sellers’ Representative’s position, 60% of the costs of its
review would be borne by the Buyer, and 40% of the costs would be borne by the
Sellers (severally, in proportion to their respective Pro-Rata Shares, and not
jointly).

(e)        “Final Closing Net Indebtedness” means (i) Estimated Closing Net
Indebtedness as shown in the Estimated Statement if the Buyer does not timely
deliver the Closing Statement to the Sellers’ Representative pursuant to
Section 2.4(b), (ii) Closing Net Indebtedness as shown in the Closing Statement
delivered by the Buyer to the Sellers’ Representative pursuant to
Section 2.4(b), (A) if Closing Net Indebtedness is equal to Estimated Closing
Net Indebtedness or (B) if no Dispute Notice with respect thereto is timely
delivered by the Sellers’ Representative to the Buyer pursuant to
Section 2.4(c), or (iii) if a Dispute Notice is so delivered, (A) as agreed
between the Buyer and the Sellers’ Representative pursuant to Section 2.4(d) or
(B) in the absence

 

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of such agreement, as determined in the Independent Accountant’s report
delivered pursuant to Section 2.4(d).

(f)        Following determination of Final Closing Net Indebtedness in
accordance with Section 2.4(e), the Purchase Price will be adjusted as follows
(such adjustment, the “Purchase Price Adjustment”):

(i)        if Estimated Closing Net Indebtedness is greater than Target Closing
Net Indebtedness, then:

(A)        if Final Closing Net Indebtedness is greater than Estimated Closing
Net Indebtedness, the Sellers shall pay the Buyer a Purchase Price Adjustment
equal to (I) 51%, multiplied by (II) the sum of Final Closing Net Indebtedness,
minus Estimated Closing Net Indebtedness;

(B)        if Final Closing Net Indebtedness is less than Estimated Closing Net
Indebtedness, the Buyer shall pay the Sellers’ Representative (on behalf of the
Sellers in proportion to their respective Pro-Rata Shares) a Purchase Price
Adjustment equal to (I) 51%, multiplied by (II) the sum of (1) Estimated Closing
Net Indebtedness, minus (2) the greater of Final Closing Net Indebtedness and
Target Closing Net Indebtedness; and

(C)        if Final Closing Net Indebtedness is equal to Estimated Closing Net
Indebtedness, the Purchase Price Adjustment shall be zero; and

(ii)        if Estimated Closing Net Indebtedness is less than or equal to
Target Closing Net Indebtedness, then:

(A)        if Final Closing Net Indebtedness is greater than Target Closing Net
Indebtedness, the Sellers shall pay the Buyer a Purchase Price Adjustment equal
to (I) 51%, multiplied by (II) the sum of Final Closing Net Indebtedness, minus
Target Closing Net Indebtedness; and

(B)        if Final Closing Net Indebtedness is less than or equal to Target
Closing Net Indebtedness, the Purchase Price Adjustment shall be zero.

(g)        To the extent the Parties are in agreement that a Purchase Price
Adjustment should be paid under Section 2.4(f), and any dispute to be resolved
under Section 2.4(d) relates only to the quantum of such amount, the amount not
in dispute (being the Purchase Price Adjustment that would result from the lower
of the Closing Net Indebtedness proposed by the Buyer and the Closing Net
Indebtedness proposed by the Sellers’ Representative) shall be paid to the
applicable Party, and any subsequent amount shall be paid in accordance with the
final determination by the Independent Accountant of such amount and any
remaining disputed items, in each case in accordance with Section 2.4(h).

(h)        Any payment pursuant to this Section 2.4 shall be paid by the Sellers
(severally, in proportion to their respective Pro-Rata Shares, and not jointly)
or the Buyer, as applicable, within three Business Days after the Purchase Price
Adjustment (or portion thereof) has been finally determined in accordance with
this Section 2.4, in each case by wire transfer of

 

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immediately available funds to the account(s) designated by the Buyer or the
Sellers’ Representative, as applicable, at least one Business Day prior to such
payment. All payments under this Section 2.4 shall be without interest, except
that any amounts not paid when required shall bear interest from the date due
pursuant to this Section 2.4 to, and including, the date of payment at the
Interest Rate.

(i)        Any payments made pursuant to this Section 2.4 shall be treated by
the Parties as an adjustment to the Purchase Price for Tax purposes, unless
otherwise required by applicable Law.

Section 2.5.    Intended Tax Treatment; Allocation. For U.S. federal, state and
local Income Tax purposes, the purchase and sale of the Purchased Interests
described in Section 2.1 shall be treated, with respect to the Purchase Price,
as a purchase of a partnership interest in the Company by the Buyer that is
subject to the adjustments provided for under Section 743(b) of the Code,
reflecting the election to be made under Section 754 of the Code by the Company
for the tax period including Closing Date. Consistent with such election, the
Buyer will prepare a draft allocation schedule (as finally determined in
accordance with this Section 2.5, the “Allocation”) allocating the sum of the
Purchase Price, the Buyer’s allocable share of the liabilities of the Company
and other amounts constituting consideration for U.S. federal, state and local
Income Tax purposes (the “Tax Purchase Price”) among the Buyer’s allocable share
of the assets of the Company in accordance with Section 755 of the Code and the
Treasury Regulations promulgated thereunder (and any corresponding or similar
provision of state or local Law). The Buyer or the Company will deliver a copy
of the Allocation to the Sellers’ Representative for its review and comment
within 60 days following the final determination of the Purchase Price
Adjustment pursuant to Section 2.4. The Allocation delivered by the Buyer shall
become final and binding to the Parties 30 days after the Buyer or the Company
provides such schedule to the Sellers’ Representative, unless the Sellers’
Representative, prior the 30th-day following receipt of the Buyer’s draft of the
Allocation, delivers a notice to the Buyer stating that the Sellers’
Representative disagrees with such calculation and specifying in reasonable
detail those items or amounts as to which the Sellers’ Representative disagrees
and the basis therefor. If the Sellers’ Representative does provide such written
notice, the Buyer and the Sellers’ Representative shall in good faith attempt to
resolve the dispute within 15 days of receipt by the Buyer of the written
notice. Any such resolution shall be final and binding on the Parties hereto.
Any unresolved disputes shall be promptly submitted to the Independent
Accountant for determination of the Allocation in accordance with
Section 2.4(d), which determination shall be final and binding on the Parties
hereto. The Parties shall cooperate with each other and the Independent
Accountant in connection with the matters contemplated by this Section 2.5,
including by furnishing such information and access to books, records (including
accountants work papers), personnel and properties as may be reasonably
requested. The Independent Accountant will determine the allocation of the cost
of its review and report in a manner as described in Section 2.4(d). The Parties
shall report the purchase and sale of the Purchased Interests consistent with
the treatment set forth in this Section 2.5 and report an allocation of the Tax
Purchase Price for all Tax purposes in a manner consistent with the Allocation
and shall not take any position inconsistent with this Section 2.5 in the filing
of any Tax Returns or in the course of any Tax Audit by any Taxing Authority
relating to any Tax Returns.

 

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Section 2.6.    Withholding. All payments of the Purchase Price shall be made
without any deduction or withholding for Taxes with respect to the Sellers
unless (a) such deduction and withholding is as a result of a Seller failing to
comply with the provisions of Section 2.3(b)(ii), Section 2.3(b)(iii) and
Section 2.3(b)(iv) of this Agreement, or (b) such deduction and withholding is
required by a change in applicable Law that occurs after the date hereof and
before the date of such payment, provided that before making any deduction or
withholding pursuant to clause (b) of this Section 2.6, the Buyer shall (i) give
written notice at least five days in advance to each Seller regarding such
deduction or withholding to be made and its basis in applicable Law (which basis
is as a result of a change in applicable Law after the date hereof and before
the date of such payment and is imposed by a jurisdiction in which a Company
Entity conducts business), (ii) provide each such Seller a reasonable
opportunity to provide any forms or other documentation or correct any
deficiencies in any such forms or other documentation that have been provided,
and (iii) reasonably cooperate with each such Seller to reduce or eliminate any
amounts that would otherwise be deducted or withheld to the extent permitted by
applicable Law. Notwithstanding anything in this Agreement to the contrary, any
amounts so deducted and withheld by the Buyer, and paid to the applicable tax
authority, as required by applicable Law and permitted under this Section 2.6
shall be treated for all purposes of this Agreement as having been paid to the
Seller subject to such deduction and withholding.

Section 2.7.    Imputed Interest. The Parties shall treat a portion of any
payment or other consideration under this Agreement as imputed interest to the
extent required pursuant to Sections 483 or 1274 of the Code.

ARTICLE III

REPRESENTATIONS AND WARRANTIES RELATING TO THE SELLERS

Each of the Sellers, severally, but not jointly, and solely with respect to such
Seller, represents and warrants to the Buyer that each statement contained in
this Article III as it applies to such Seller is true and correct as of the date
hereof and as of the Closing Date, except as set forth in the disclosure
schedule delivered pursuant to this Agreement (the “Disclosure Schedule”).

Section 3.1.    Organization and Existence. Such Seller is a corporation or
limited liability company, duly incorporated or formed, as applicable, validly
existing and in good standing under the Laws of such Seller’s jurisdiction of
incorporation or formation, as applicable.

Section 3.2.    Authority and Enforceability. Each such Seller has the requisite
corporate or limited liability company power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the Transactions. The execution, delivery and performance by such Seller of this
Agreement, and the consummation by such Seller of the Transactions, have been
duly and validly authorized by all necessary corporate action on the part of
such Seller, and no other action is necessary on the part of such Seller to
authorize this Agreement or to consummate the Transactions. This Agreement has
been duly executed and delivered by such Seller, and, assuming the due
authorization, execution and delivery by each other Party, this Agreement
constitutes a legal, valid and binding obligation of such Seller, enforceable
against such Seller in accordance with its terms, except as limited by
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar Laws relating to creditors’

 

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rights generally and (b) general principles of equity, whether such
enforceability is considered in a proceeding in equity or at Law.

Section 3.3.    Noncontravention.

(a)        Neither the execution, delivery or performance by such Seller of this
Agreement, nor the consummation of the Transactions by such Seller, will, with
or without the giving of notice or the lapse of time or both, (i) violate any
provision of the Organizational Documents of such Seller, (ii) violate any Law
or Order applicable to the Seller or (iii) result in a breach of or default
under, require consent under or violate any material Contract to which such
Seller is a party, except in the case of clauses (ii) and (iii) to the extent
that any such breach, default, consent or violation would not reasonably be
expected to be, individually or in the aggregate, material to such Seller’s
ability to timely perform its obligations hereunder.

(b)        Except as set forth in Section 6.7, no Permit or Filing is required
by such Seller in connection with the execution and delivery by such Seller of
this Agreement, the performance by such Seller of its obligations hereunder and
the consummation by the Seller of the Transactions other than Permits and
Filings the failure of which to obtain or make would not reasonably be expected
to be, individually or in the aggregate, material to such Seller’s ability to
timely perform its obligations hereunder.

Section 3.4.    Legal Proceedings. There are no Legal Proceedings pending or, to
the Knowledge of such Seller, threatened against or otherwise relating to such
Seller that (a) challenge or seek to enjoin, alter or materially delay the
Transactions or (b) would, individually or in the aggregate, reasonably be
expected to be, individually or in the aggregate, material to such Seller’s
ability to timely perform its obligations hereunder.

Section 3.5.    Capitalization. Such Seller owns (of record and beneficially)
the Purchased Interests set forth opposite such Seller’s name on Schedule A
under the heading “Purchased Interests” free and clear of all Liens (other than
Liens (a) arising pursuant to, or as a result of, the Transactions, (b) arising
under the Organizational Documents of the Company and (c) arising pursuant to
applicable securities Laws). At the Closing, such Seller will transfer to the
Buyer all of such Seller’s right, title and interest in and to the applicable
Purchased Interests free and clear of all Liens (other than Liens (i) arising
pursuant to, or as a result of, the Transactions, (ii) arising under the
Organizational Documents of the Company and (iii) arising pursuant to applicable
securities Laws); provided, that for the avoidance of doubt, the Purchased
Interests will be subject to the transfer restrictions set forth in the A&R
Operating Agreement.

Section 3.6.    Brokers. Other than fees or commissions for which the Sellers
will be solely responsible, such Seller does not have any Liability or
obligation to pay fees or commissions to any broker, finder or agent with
respect to the Transactions.

Section 3.7.    Disclaimer of Warranties. Except as set forth in this
Article III and Article IV (as qualified or modified by the Disclosure
Schedule), (a) the Purchased Interests (including, indirectly through the sale
of the Purchased Interests, the assets, properties, liabilities, condition,
operations or prospects of the Company Entities) are being sold on an “as is,
where is” basis as of the Closing and (b) no Seller nor any of their respective
Affiliates (except for the

 

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Company as provided in Article IV), nor any of their respective Representatives,
have made, or shall be deemed to have made, any other representation or
warranty, express or implied, at law or in equity, in respect of the Purchased
Interests or the assets, properties, liabilities, condition, operations or
prospects of the Company Entities, including with respect to (i) merchantability
or fitness for any particular purpose, (ii) the operation of the business of the
Company Entities after the Closing, (iii) the probable success or profitability
of the business of the Company Entities after the Closing or (iv) the accuracy
or completeness of any (A) projections, predictions, forecasts, estimates, plans
or budgets of future revenues, expenses or expenditures, future results of
operations (or any component thereof), future cash flows (or any component
thereof) or future financial condition (or any component thereof) that may be
contained or referred to in the Disclosure Schedule or elsewhere or
(B) information, documents or materials regarding the business of the Company
Entities, the Purchased Interests or the assets and properties of the Company,
including any information furnished or made available to the Buyer, its
Affiliates or their respective Representatives (including the Financing Sources)
in any “data rooms,” “virtual data rooms,” management presentations or in any
other form in expectation of, or in connection with, the Transactions (the
“Evaluation Material”), or the appropriateness or suitability of such
information for the purposes of enabling the Buyer to evaluate the consummation
of the Transactions. Any such other representations or warranties are hereby
expressly disclaimed. Any such other representations or warranties are hereby
expressly disclaimed. Other than the indemnification obligations of the Sellers
set forth in Section 10.1, none of the Sellers, their respective Affiliates nor
any of their respective Representatives will have or be subject to any liability
or indemnification obligation to the Buyer or any other Person resulting from
the distribution to the Buyer, its Affiliates or their respective
Representatives of, or the Buyer’s use of or reliance on, any Evaluation
Material in expectation of the Transactions.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES RELATING

TO THE COMPANY

The Company represents and warrants to the Buyer that each statement contained
in this Article IV is true and correct as of the date hereof and as of the
Closing Date, except as set forth in the Disclosure Schedule.

Section 4.1.    Organization and Existence. The Company is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware, and has all requisite power and authority to own, lease
and operate its properties and assets and to carry on its business as it is now
being conducted. The Company is duly qualified or licensed as a foreign entity
to do business, and is in good standing, in each jurisdiction where the
character of its properties or assets owned, leased or operated by it or the
nature of its activities makes such qualification or licensing necessary, except
where the failure to be so qualified or licensed would not reasonably be
expected to, individually or in the aggregate, materially impair the ability of
the Buyer or the Company Entities to conduct the business of the Company
Entities following the Closing as it is conducted on the date hereof. The
Company has made available to the Buyer complete and correct copies of its
Organizational Documents, as amended and in effect on the date hereof. The
Company is not in violation of any of the provisions of its Organizational
Documents.

 

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Section 4.2.    Authority and Enforceability. The Company has the requisite
limited liability company power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
Transactions. The execution, delivery and performance by the Company of this
Agreement, and the consummation by the Company of the Transactions, have been
duly and validly authorized by all necessary limited liability company action on
the part of the Company, and no other action is necessary on the part of the
Company to authorize this Agreement or to consummate the Transactions. This
Agreement has been duly executed and delivered by the Company, and, assuming the
due authorization, execution and delivery by each other Party, this Agreement
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as limited by
(a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar Laws relating to creditors’ rights generally and (b) general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at Law.

Section 4.3.    Capitalization of the Company Entities.

(a)        (1) The authorized, issued and outstanding Equity Securities of the
Company and the Company Entities are set forth in Section 4.3(a) of the
Disclosure Schedule. (2) The Equity Securities of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and were not
issued in contravention of any preemptive rights, rights of first refusal or
first offer or similar rights. (3) The Equity Securities of the Company
Subsidiaries and aLF Ventures, LLC have been duly authorized and validly issued,
are fully paid and non-assessable and were not issued in contravention of any
preemptive rights, rights of first refusal or first offer or similar rights.
(4) The Company owns, directly or indirectly, beneficially and of record, the
Equity Securities of (x) each Company Subsidiary and (y) aLF Ventures, LLC, as
set forth in Section 4.3(a) of the Disclosure Schedule. (5) The Equity
Securities of each Company Subsidiary and aLF Ventures, LLC are free and clear
of any Liens (other than Liens (i) arising pursuant to, or as a result of, the
Transactions, (ii) arising under the Organizational Documents of such Company
Subsidiary and (iii) arising pursuant to applicable securities Laws).

(b)        Except as set forth in the Organizational Documents of the Company,
(i) there are no outstanding restrictions on transfers or voting of the
Purchased Interests, and (ii) no Person has been granted any agreement or
option, or any right or privilege capable of becoming an agreement or option,
for the purchase, subscription, allotment or issuance of any Equity Securities
of the Company.

(c)        Except for the Equity Securities in the Company Subsidiaries and aLF
Ventures, LLC, none of the Company Entities owns any Equity Securities in any
Person.

(d)        aLF Ventures, LLC does not have any operations.

Section 4.4.    Noncontravention.

(a)        Neither the execution, delivery and performance of this Agreement,
nor the consummation of the Transactions, will, with or without the giving of
notice or the lapse of time or both, (i) violate any provision of the
Organizational Documents of any Company Entity, (ii) violate any Law or Order
applicable to any Company Entity or (iii) result in a breach of or default

 

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under, require consent under or violate any Material Contract or Leases, except
in the case of clauses (ii) and (iii) to the extent that any such breach,
default, consent or violation would not reasonably be expected to, individually
or in the aggregate, materially impair the ability of the Buyer or the Company
Entities to conduct the business of the Company Entities following the Closing
as it is conducted on the date hereof.

(b)        Except as set forth in Section 6.7, no Permit or Filing is required
by any Company Entity in connection with the consummation of the Transactions
other than Permits and Filings the failure of which to obtain or make would not
reasonably be expected to be, individually or in the aggregate, material to the
Company’s ability to timely perform its obligations hereunder.

Section 4.5.    Financial Statements. The Company has made available to the
Buyer complete and correct copies of (a) the audited consolidated financial
statements of the Company Entities as at and for the year ended December 30,
2017 (the “Balance Sheet Date”), together with a report thereon by Deloitte &
Touche LLP, the Company Entities’ independent public accountants (the “Audited
Financial Statements”); and (b) the unaudited consolidated financial statements
of the Company Entities as at and for the period ended February 24, 2018 (the
“Unaudited Financial Statements”), including in each case a balance sheet and
statement of operations (the Audited Financial Statements and the Unaudited
Financial Statements, collectively, the “Financial Statements”). The Audited
Financial Statements are complete and correct in all material respects and have
been (i) derived from the accounting books and records of the Company Entities;
and (ii) prepared in accordance with GAAP on the basis of the same accounting
principles, policies, methods and procedures, consistently applied, throughout
the periods indicated. The Unaudited Financial Statements have been prepared on
a basis consistent with the Audited Financial Statements, except that the
Unaudited Financial Statements do not contain notes and may be subject to
appropriate year-end adjustments. The balance sheets included in the Financial
Statements present fairly in all material respects the consolidated financial
condition of the Company Entities as at their respective dates. The statements
of income, members’ equity and cash flows included in the Financial Statements,
as applicable, present fairly in all material respects the results of operations
and cash flows of the consolidated business of the Company Entities for the
periods indicated.

Section 4.6.    Absence of Undisclosed Liabilities. None of the Company Entities
has any Liabilities of a nature required by GAAP to be reflected on a balance
sheet, except Liabilities (a) as and to the extent disclosed or reserved against
in the Audited Financial Statements or specifically disclosed in the notes
thereto; or (b) that were incurred after the Balance Sheet Date in the Ordinary
Course of Business.

Section 4.7.    Absence of Changes. Since the Balance Sheet Date, the Company
Entities have conducted their businesses only in the Ordinary Course, except in
connection with any process relating to a sale of the Purchased Interests,
including entering into this Agreement, and, without limiting the foregoing,
since the Balance Sheet Date, there has not been any:

(a)        event, development or state of circumstances experienced by the
Company Entities or, to the Knowledge of the Company, threatened that has had or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect;

 

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(b)        declaration, setting aside or payment of any dividend or other
distribution with respect to any Equity Securities (including the Units) of the
Company Entities, or any repurchase or redemption by the Company Entities of any
Equity Securities (including the Units), except as permitted pursuant to
Section 6.1;

(c)        incurrence, assumption or guarantee of any Indebtedness by the
Company Entities, except as provided for under the Company’s existing credit
facilities;

(d)        material damage, destruction or other casualty loss (whether or not
covered by insurance);

(e)        change in any accounting principle, policy, method or procedure by
the Company Entities or any revaluation of any material assets;

(f)        capital expenditures, other than in the Ordinary Course of Business;

(g)        sale, transfer, lease or other disposition of any material assets,
other than in the Ordinary Course of Business, or any acquisition of any other
Person, whether by merger or consolidation or by purchasing all or a material
portion of the capital stock or assets of such Person, or by any other manner;

(h)        any making of any loan, advance or capital contributions to or
investment in any Person; or

(i)        agreement or commitment to do any of the foregoing, or any action or
omission that would reasonably be expected to result in any of the foregoing.

Section 4.8.    Material Contracts.

(a)        Section 4.8(a) of the Disclosure Schedule sets forth a list, as of
the date hereof, of all of the following Contracts to which any Company Entity
is a party:

(i)         Contract for Indebtedness (in each case, whether incurred, assumed,
guaranteed or secured by any asset) involving amounts in excess of $5,000,000;

(ii)        Contract establishing any joint venture, partnership, limited
liability company or other similar Contract;

(iii)        material lease for personal property;

(iv)        Contract reasonably expected to result in future payments to or by
the Company Entities in excess of $5,000,000 in any annual period, except for
Contracts that are terminable on less than 90 days’ notice without material
penalty and any Company Benefit Plans;

(v)        Contract (or series of related Contracts) relating to any outstanding
commitment for capital expenditures in excess of $5,000,000 individually;

 

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(vi)        Contract (or series of related Contracts) relating to the purchase
by the Company Entities of any products or services under which the undelivered
balance of such products or services is in excess of $5,000,000;

(vii)        Contract (or series of related Contracts) entered into since
January 1, 2013 relating to the material acquisition, disposition or lease of
any Person, business or material real property or other assets (whether by
merger, sale of stock, sale of assets or otherwise);

(viii)      Contract containing any “change of control” provisions;

(ix)        Contract that (A) limits in any material respect the freedom of the
Company Entities to compete in any line of business or with any Person or in any
geographic area; or (B) contains exclusivity obligations or restrictions binding
on the Company Entities, in each case, whether before or after the Closing; or

(x)        Contract (including any “take-or-pay” or keepwell agreement) under
which (A) any Person (other than another Company Entity) has directly or
indirectly guaranteed any Liabilities of the Company Entities; or (B) the
Company Entities have directly or indirectly guaranteed Liabilities of any other
Person (other than another Company Entity).

(b)        Each Contract disclosed or required to be disclosed pursuant to
Section 4.8(a) (each, a “Material Contract”) is a legal, valid, binding and
enforceable agreement of the Company Entities and is in full force and effect,
except (i) to the extent such Material Contract terminates or expires after the
date hereof in accordance with its terms, (ii) as limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
Laws relating to creditors’ rights generally, or (iii) as limited by general
principles of equity, whether such enforceability is considered in a Legal
Proceeding in equity or at Law. None of the Company Entities or, to the
Knowledge of the Company, any other party thereto is in default or breach under
the terms of, or, during the one-year period prior to the date hereof, has
provided any written notice of any intention to terminate or modify, any such
Material Contract, and, to the Knowledge of the Company, no event or
circumstance has occurred that, with notice or lapse of time or both, would
constitute a breach thereof or a default thereunder or would result in a
termination, modification, acceleration or vesting of any rights or obligations
or loss of benefits thereunder. Complete and correct copies of (A) each Material
Contract (including all waivers thereunder); and (B) all form Contracts that are
related to the business of the Company Entities have been made available to the
Buyer.

(c)        The Company Entities are not parties to Contracts with any
Governmental Entities.

Section 4.9.    Assets; Real Property.

(a)        The Company Entities have good and valid (and, in the case of Owned
Real Property, good, valid and marketable fee simple) title to, or otherwise has
the right to use pursuant to a valid and enforceable lease, license or similar
contractual arrangement, all of the material tangible and intangible assets,
properties (including Real Properties) and rights that are purported to be
owned, leased or licensed by the Company Entities (the “Assets”), in each case
free and clear of any Liens (other than Permitted Liens).

 

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(b)        The plants, buildings, structures, material equipment and other
material tangible personal property included in the Assets are in reasonably
good repair, working order and operating condition, subject only to ordinary
wear and tear, and are adequate and suitable for the purposes for which they are
presently being used or held for use. To the Knowledge of the Company, there are
no facts or conditions affecting any material Assets that could reasonably be
expected, individually or in the aggregate, to interfere with the current use,
occupancy or operation of such Assets.

(c)        Section 4.9(c) of the Disclosure Schedule sets forth a complete and
correct list of all real property owned by the Company Entities (together with
all improvements and fixtures located thereon or attached or appurtenant thereto
and all easements, licenses, rights and appurtenances relating thereto, the
“Owned Real Property”). Such schedule lists the address and owner of each parcel
of Owned Real Property and describes all improvements thereon. There are no
outstanding options or rights of first refusal to purchase or lease the Owned
Real Property or any portion thereof or interest therein. There are no pending
or, to the Knowledge of the Company, threatened condemnation Legal Proceedings
before any Governmental Entity with respect to any Owned Real Property.

(d)        Section 4.9(d) of the Disclosure Schedule sets forth a complete and
correct list of all of the real property leased by the Company Entities (the
“Leases” and together with all interests leased pursuant to the Leases, the
“Leased Real Property”), including the address, landlord and tenant for each
Lease. The Company has made available to the Buyer complete and correct copies
of each Lease. None of the Company Entities is a sublessor or grantor under any
material sublease or other instrument granting to another Person any right to
the possession, lease, occupancy or enjoyment of the Leased Real Property.

(e)        The use and operation of the Real Property in the conduct of the
business of the Company Entities do not violate in any material respect any Law,
Consent, Lien or agreement of any Governmental Entity.

(f)        There are no Liens (other than Permitted Liens) affecting the Real
Property that materially impair the ability of the Company Entities to use such
property in the operation of the business of the Company Entities in the
Ordinary Course.

Section 4.10.    Intellectual Property.

(a)        Section 4.10(a) of the Disclosure Schedule sets forth a complete and
correct list of (i) all Registered Intellectual Property Rights owned by, filed
in the name of, or applied for, by the Company Entities (the “Company Registered
Intellectual Property Rights”); and (ii) any Legal Proceedings before any
Governmental Entity (including the United States Patent and Trademark Office or
equivalent authority anywhere in the world) related to any of the Company
Registered Intellectual Property Rights or Company Intellectual Property.

(b)        Each of the Company Registered Intellectual Property Rights is
currently in compliance in all material respects with all formal legal
requirements and is valid and subsisting. All necessary documents and
certificates in connection with such Company Registered Intellectual Property
Rights have been filed with the relevant Governmental Entities in the United
States or

 

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foreign jurisdictions, as the case may be, for the purposes of applying for,
perfecting, prosecuting, maintaining and recording the assignment of such
Company Registered Intellectual Property Rights, except where the failure to
make such filing would not would reasonably be expected to be, individually or
in the aggregate, material to the Company Entities taken as a whole.

(c)        The use or distribution by the Company Entities of any data,
information, content or other works does not, has not, since January 1, 2015,
and following the Transactions shall not when conducted in substantially the
same manner by the Buyer: (i) infringe or violate the material rights (including
Intellectual Property Rights or rights under contract or policy) of any Person;
or (ii) violate any material law or regulation of any country or jurisdiction,
and no Company Entity has received any written notice of any infringement or
violation with respect thereto. To the Knowledge of the Company, no Person is
infringing or misappropriating any Company Intellectual Property or the related
Company Intellectual Property Rights.

(d)        In each case in which any Person other than the Company Entities has
created any material Intellectual Property that is used in the operation of the
business of the Company Entities as currently conducted, the Company Entities
have obtained a valid and enforceable assignment sufficient to irrevocably
transfer all rights in and to all such Intellectual Property and the associated
Intellectual Property Rights to the Company Entities, except where the failure
to make such filing would not reasonably be expected to be, individually or in
the aggregate, material to the Company Entities taken as a whole.

(e)        Except as would not reasonably be expected to be, individually or in
the aggregate, material to the Company Entities taken as a whole, (i) the
Company Entities are the exclusive owners or exclusive licensees of all Company
Intellectual Property (other than Intellectual Property in the public domain
available for use), and (ii) the Company Entities have the right to use,
pursuant to valid licenses, all third-party Intellectual Property that is
material to the business of the Company Entities. The Company Intellectual
Property and the IP Licenses constitute all the material Intellectual Property
and Intellectual Property Rights used in or necessary to the conduct of the
business of the Company Entities as conducted on the date hereof.

(f)        No Company Intellectual Property is subject to any material Legal
Proceeding or Order that restricts in any manner the use, transfer or licensing
thereof by the Company Entities or may affect the validity, use or
enforceability of such Company Intellectual Property.

(g)        Under the terms of the IP Licenses, following the Closing Date, the
Company Entities shall be permitted to continue exercising all material rights
of the Company Entities under the IP Licenses to the same extent the Company
Entities would have been able to had the Transactions not occurred and without
the payment of any material additional amounts or consideration other than
ongoing fees, royalties or payments that the Company Entities would otherwise be
required to pay. The Transactions shall not result in any third party being
granted any rights to any Company Intellectual Property Rights that are in
addition to, or greater than, the rights such third party currently has under
such IP Licenses, including any access to or release of any source code owned by
or licensed to the Company Entities.

 

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Section 4.11.    Litigation. There are no Legal Proceedings pending or, to the
Knowledge of the Company, threatened against or affecting the Company Entities,
in each case that (a) challenge or seek to enjoin, alter or materially delay the
Transactions or (b) would reasonably be expected to be, individually or in the
aggregate, material to the Company Entities taken as a whole. There are no
settlement agreements or similar written Contracts with any Governmental Entity,
and no outstanding Orders entered or issued by or subject to any Governmental
Entity, against or affecting the Company Entities, in each case that
(i) challenge or seek to enjoin, alter or materially delay the Transactions or
(ii) would reasonably be expected to be, individually or in the aggregate,
material to the Company Entities taken as a whole.

Section 4.12.    Compliance with Laws; Consents.

(a)        The conduct by the Company Entities of their businesses is and, since
January 1, 2015, has been in compliance in all material respects with all
applicable Laws, except for violations or failures to comply, if any, that,
individually and in the aggregate, have not had and would not reasonably be
expected to (i) give rise to material fines or other material civil penalties or
any criminal Liabilities; or (ii) cause the Company Entities to lose any
material benefit or incur any material Liability. None of the Company Entities
has received any written notice relating to any alleged violation of any
applicable Law from any Governmental Entity, or of any investigation with
respect thereto, except for violations, if any, that, individually and in the
aggregate, have not had and would not reasonably be expected to give rise to
material fines or other material civil penalties or any criminal Liabilities.
Without limiting the foregoing, none of the Company Entities or its Affiliates,
nor, to the Knowledge of the Company, any of the Company Entities’ or its
Affiliates’ respective Representatives acting on their behalf, has, in
connection with the operation of the business of the Company Entities, directly
or indirectly:

(i)        improperly or unlawfully made any payment or offered anything of
value to any foreign or domestic officials or employees or to any foreign or
domestic political parties or campaigns for the purpose of (A) influencing any
act or decision of such official, employee, party or campaign, (B) inducing such
official, employee, party or campaign to do or omit to do any act in violation
of a lawful duty, (C) obtaining or retaining business for or with any Person or
(D) any other unlawful purpose;

(ii)      made or authorized any payment, contribution or gift of money,
property or services involving the direct or indirect use of funds of the
Company Entities (including entertainment or other expenses), whether or not in
contravention of applicable Law, (A) as a “kickback” or bribe to any Person; or
(B) to any political organization or the holder of (or person who seeks) any
elective or appointive public office related to political activity or otherwise
related to political activity; or

(iii)      violated any applicable export control, money laundering or
anti-terrorism Law or taken any action that could reasonably be expected,
individually or in the aggregate, to cause any of the Company Entities to be in
violation of the U.S. Foreign Corrupt Practices Act of 1977, as amended, the
U.K. Bribery Act 2010, as amended, any act enforced by the Office of Foreign
Asset Control of the U.S. Department of Treasury or any applicable Law of
similar effect.

 

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(b)        The Company Entities own or possess all Consents required to be held
by the Company Entities in the conduct of their businesses, other than such
Consents the absence of which would not reasonably be expected to, individually
or in the aggregate, materially impair the ability of the Buyer or the Company
Entities to conduct the business of the Company Entities following the Closing
as it is conducted on the date hereof.

Section 4.13.    Environmental Matters.

(a)        The Company Entities are in compliance and, since January 1, 2015,
have complied in all material respects with all applicable Environmental Laws
and have obtained and are in compliance in all material respects with all
applicable Environmental Permits. Since January 1, 2015, no written notice of
violation, notification of Liability or request for information has been
received by the Company Entities, and no Legal Proceeding is pending or, to the
Knowledge of the Company, threatened by any Person against any Company Entity
relating to or arising out of any Environmental Law. Since January 1, 2015, no
Order has been issued and is currently in effect, and no penalty or fine has
been assessed against the Company Entities relating to or arising out of any
Environmental Law.

(b)        No Releases of Hazardous Substances have been caused by the Company
Entities, or to the Knowledge of the Company, otherwise occurred, at, on, above,
under or from the Real Property or any properties currently or formerly owned,
leased or operated by the Company Entities that has resulted or could reasonably
be expected, individually or in the aggregate, to result in any material
Liability of the Company Entities under any Environmental Law.

(c)        No Company Entity nor, to the Knowledge of the Company, any other
Person, has caused or taken any action that has resulted or could reasonably be
expected to result, individually or in the aggregate, in any material Liability
relating to (i) the environmental conditions at, on, above, under, or about the
Real Property or any properties or assets currently or formerly owned, leased or
operated by any Company Entity; (ii) the past or present use, management,
handling, transport, treatment, generation, storage, disposal, Release or
threatened Release of Hazardous Substances; or (iii) any Remedial Action at any
of the Real Property.

(d)        The Company has made available to the Buyer all material
environmental site assessments, audits, investigations and studies in the
possession, custody or control of any Company Entity relating to the Real
Property or properties or assets currently or formerly owned, leased or operated
by the Company Entities.

Section 4.14.    Employees; Labor Matters.

(a)        None of the Company Entities is a party to or bound by any Contract
with any labor union, labor organization, works council or other employee
representatives (collectively, “Company Labor Agreements”) and, since January 1,
2015, there have not been any and there are currently no labor unions or other
organizations or groups representing or purporting or attempting to represent
any employees employed by the Company Entities. Since January 1, 2015, there has
not occurred or, to the Knowledge of the Company, been threatened, any material
strike, slowdown, picketing, work stoppage, concerted refusal to work or other
similar labor activity with respect to any such employees of the Company
Entities. There are no labor disputes currently subject to any grievance
procedure or Legal Proceeding or, to the Knowledge of the Company, threatened
with

 

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respect to any such employee, except for such events or circumstances that would
not reasonably be expected to be, individually or in the aggregate, material to
the Company Entities taken as a whole. None of the Company Entities has engaged
in any unfair labor practices (within the meaning of the National Labor
Relations Act) that would reasonably be expected to, individually or in the
aggregate, directly or indirectly result in a material Liability to the Company
Entities. The Company Entities are in compliance in all material respects with
all statutory obligations to inform and consult with their employees and/or
their representatives as might be imposed under applicable Law. To the Knowledge
of the Company, neither the announcement nor the consummation of the
Transactions will entitle any third party (including any labor union, labor
organization, works council or other employee representatives) to notice or
consultation rights under any labor agreements. A complete and correct copy of
each Company Labor Agreement, including all amendments, side letters and written
understandings relating thereto has been made available to the Buyer.

(b)        There are no terms of employment for employees that provide that a
change in control of the Company Entities (however “change in control” may be
defined in the applicable document, if at all) shall entitle such employees to
treat the change in control as amounting to (i) a breach of the contract,
(ii) entitling him or her to any payment or benefit whatsoever, (iii) entitling
him or her to treat himself as redundant or dismissed or released from any
obligation, or (iv) entitling him or her to the triggering, extending or vesting
of any contractual provision.

(c)        (i) No Key Employee has given or received written notice terminating
his or her employment since January 1, 2018; (ii) there are no employment or
severance contracts with any employee pursuant to which the employee cannot be
terminated upon 60 or fewer days’ prior notice or with severance pay and
benefits not exceeding the aggregate amount thereof for the greater of 60 days
or two weeks of base pay for each year of service up to a maximum of 6 months;
(iii) no material Liability that remains undischarged has been incurred by the
Company Entities for breach of any contract of employment or breach of any
statutory or equivalent employment right; and (iv) none of the Company Entities
is the subject of any pending or threatened action involving one or more
employees of the Company Entities that individually or in the aggregate would be
material.

(d)        No Company Entity is in receipt of a written complaint, demand letter
or charge issued by a Governmental Entity that alleges a material violation by
the Company Entities of any applicable Law respecting employment and employment
practices, terms and conditions of employment, wages and hours, equal
opportunity, civil rights, labor relations, occupational health and safety or
payroll taxes. No Company Entity has, since January 1, 2015, (i) engaged in any
plant closing, work force reduction or other action that has resulted or could
reasonably be expected to result in material Liability under the Workers
Adjustment and Retraining Notification Act or any other applicable foreign,
state or local Law, requiring notice to employees in the event of a plant
closing or layoff; (ii) been issued any written notice that any such action is
to occur in the future with respect to the employees; or (iii) failed to comply
in all material respects with all applicable requirements of the Immigration
Reform and Control Act and the Consolidated Omnibus Budget Reconciliation Act of
1987 with respect to the employees.

 

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(e)        The Company has delivered to the Buyer a list of all Key Employees
and their respective current base compensation.

Section 4.15.    Employee Benefit Plans and Related Matters; ERISA.

(a)        Section 4.15(a) of the Disclosure Schedule sets forth a complete and
correct list of the Company Benefit Plans. With respect to each such Company
Benefit Plan other than a Multiemployer Plan, the Company has made available to
the Buyer, to the extent applicable: (i) each plan document, (including benefit
schedules), trust agreements, and insurance contracts and other funding vehicles
and amendments thereto; (ii) the two most recent Annual Report (Form 5500
Series) and accompanying schedules, if any; (iii) the current summary plan
description, together with the most recent summary of material modifications, if
any; (iv) the most recent annual and periodic financial reports, if any; (v) the
most recent determination letter from the IRS, if any; (vi) where a plan
document for a Company Benefit Plan does not exist, a detailed description of
such Company Benefit Plan; (vii) copies of all applications and material
correspondence to or from the IRS, the U.S. Department of Labor or any other
Governmental Entity with respect to any Company Benefit Plan; and (viii) all
communications material to any employee relating to any Company Benefit Plan
with respect to any amendments, terminations, plan establishments, increases or
decreases in benefits, acceleration of payments or vesting schedules or other
events that could reasonably be expected to result in material Liability to the
Company Entities and which have not otherwise been incorporated into the
applicable Company Benefit Plan document.

(b)        Section 4.15(b) of the Disclosure Schedule identifies each Company
Benefit Plan other than a Multiemployer Plan that is intended to be a “qualified
plan” within the meaning of section 401(a) of the Code (the “Qualified Plans”).
The IRS has issued a favorable determination letter, or, in the case of
prototype or volume submitter plans, an advisory or opinion letter, with respect
to each Qualified Plan that has not been revoked, and, to the Knowledge of the
Company, there are no existing circumstances nor have any events occurred that
could adversely affect the qualified status of any Qualified Plan or the related
trust.

(c)        With respect to the Company Benefit Plans:

(i)        Each Company Benefit Plan other than a Multiemployer Plan is in
compliance in all material respects with all applicable Laws and its terms. No
prohibited transaction within the meaning of section 4975 of the Code or section
406 of ERISA for which there is no exemption has occurred with respect to any
Company Benefit Plan other than a Multiemployer Plan. All material contributions
required to be made by the Company Entities to any Company Benefit Plan by
applicable Law or by any plan document or other contractual undertaking, and all
material premiums due or payable by the Company Entities with respect to
insurance policies funding any Company Benefit Plan, for any period through the
date hereof have been timely made or paid in full or, to the extent not required
to be made or paid on or before the date hereof, have been fully reflected in
the Financial Statements, to the extent required by GAAP.

(ii)        No Company Benefit Plan is subject to Title IV or section 302 of
ERISA or section 412 or 4971 of the Code.

 

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(iii)        None of the Company Entities has contributed to or been obligated
to contribute or incurred any withdrawal Liability to any Multiemployer Plan or
to any plan with two or more contributing sponsors at least two of whom are not
under common control, within the meaning of section 4063 of ERISA. There does
not now exist, nor do any circumstances exist that would reasonably be expected
to result in, any Controlled Group Liability that would reasonably be expected
to be a material Liability of the Company Entities following the Closing.

(iv)        Each Company Benefit Plan that is a “non-qualified deferred
compensation plan” is in material compliance (in operation and in form) with
section 409A of the Code.

(v)        None of the Company Entities has any Liability for life insurance,
health, medical or other welfare benefits to current or future retired or
terminated employees or beneficiaries or dependents thereof, except for
(A) coverage mandated by applicable Law; (B) death benefits under any “employee
pension plan”, as that term is defined in section 3(2) of ERISA; (C) benefits,
the full cost of which is borne by any such current or former employee or
individual (or his or her beneficiary or dependent); or (D) coverage that
continues until the end of the month during which such termination of employment
or separation from service occurs. There does not now exist any circumstances
with respect to any Company Benefit Plan that could subject the Company Entities
to any Tax under section 4980B of the Code.

(vi)        Neither the execution and delivery of this Agreement nor the
consummation of the Transactions will (either alone or in conjunction with any
other event) result in, cause the accelerated vesting or delivery of, or
increase the amount or value of, any payment or benefit to any employee of the
Company Entities or result in payments under any of the Company Benefit Plans or
employment agreements that would not be tax deductible under section 162(m) of
the Code. No payment or benefit provided by the Company Entities in connection
with the Transactions (either solely as a result thereof or as a result of such
transactions in conjunction with any other event) will be an “excess parachute
payment” within the meaning of section 280G of the Code.

(vii)      No Liability under any Company Benefit Plan has been funded, nor has
any such obligation been satisfied, with the purchase of a contract from an
insurance company as to which the Company Entities have received notice that
such insurance company is insolvent or is in rehabilitation or any similar
proceeding.

(viii)      No Company Benefit Plan is funded by a trust described in section
501(c)(9) of the Code.

(d)        There is no pending or, to the Knowledge of the Company, threatened
Legal Proceeding (other than claims for benefits in the Ordinary Course) that
has been asserted or instituted against the Company Benefit Plans, any
fiduciaries thereof with respect to their duties to the Company Benefit Plans or
the assets (including any assets held in trust) of the Company Benefit Plans
that could reasonably be expected to result in any material Liability of the
Company Entities to any Governmental Entity or any Multiemployer Plan.

 

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(e)        Except as required under this Agreement, since January 1, 2017, there
has not been, nor has any commitment or communication been made or plan
undertaken with respect to: (i) any adoption or material amendment by the
Company Entities of any Company Benefit Plans; or (ii) any adoption of, or
amendment to, or change in employee participation or coverage under, any Company
Benefit Plans that, in the case of each of the preceding clauses (i) and (ii),
has not been given effect prior to the Closing Date and would reasonably be
expected, individually or in the aggregate, to increase materially the expense
of maintaining such Company Benefit Plans after the Closing Date.

Section 4.16.    Taxes.

(a)        All material Tax Returns required to be filed by all Company Entities
have been timely filed (taking into account applicable extensions of time to
file), in accordance with applicable Law, and all such Tax Returns are true,
accurate and complete in all material respects and correctly reflect the
material facts regarding the income, properties, operations and status of any
entity required to be shown thereon. True, complete and correct copies of such
Tax Returns have been made available to the Buyer. Section 4.16(a) of the
Disclosure Schedule sets forth a complete and correct list of all Income Tax
Returns filed with respect to the Company Entities for taxable periods ended on
or after January 1, 2012 that have been, or are currently being, audited.

(b)        All material Taxes required to be paid by the Company Entities
(whether or not shown as due on such Tax Returns) have been paid timely in full,
other than Taxes that are (i) not yet due and payable or (ii) being contested in
good faith and, in each case, with respect to which adequate reserves have been
established in the Financial Statements in accordance with GAAP.

(c)        There is no Tax Audit with respect to Taxes, or Tax Returns, of or
with respect to any Company Entity that is currently pending or that has been
proposed in writing.

(d)        No Company Entity has received written notice or otherwise has
Knowledge of any proposed adjustments or claims in respect of any Taxes of any
Company Entity.

(e)        All U.S. federal, state and local income Tax Returns filed with
respect to Taxable Periods ending on or prior to December 31, 2015 have been
examined and closed or are Tax Returns with respect to which the applicable
period for assessment under applicable Law, after giving effect to extensions or
waivers, has expired.

(f)        No Company Entity has received from any Taxing Authority in a
jurisdiction where such Company Entity has not filed any Tax Returns any written
claim that such Company Entity is subject to taxation by that jurisdiction or is
required to file a Tax Return in that jurisdiction. No Company Entity has
engaged in a trade or business, had a permanent establishment or other taxable
presence in any foreign country other than the country in which is organized, as
determined pursuant to applicable Law or any applicable Tax treaty or
convention.

(g)        No Company Entity has any Liability for Taxes of any other Person
(i) under Treasury Regulations Section 1.1502-6 (or any corresponding or similar
provision of applicable Law) (other than solely as relates to a consolidated or
unitary group consisting solely of Company Entities), (ii) as a transferee or
successor, (iii) by Contract or (iv) otherwise.

 

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(h)        No Company Entity has been included in any combined, consolidated,
affiliated, unified or group Tax Return or has had its Tax Liability calculated
on a combined, consolidated, unified, group or affiliated basis other than
solely as relates to a Company Entity as a member of an affiliated group within
the meaning of Section 1504 of the Code (or any corresponding or similar
provision of applicable Law), of which a Company Entity is the common parent.

(i)        No Company Entity is, or owns an interest in, (i) a controlled
foreign corporation as defined in Section 957 of the Code, other than National
Beef de LÉON S.de R.L. de C.V., National Beef Japan, Inc. and NBP Korea Inc.,
none of which has earned any material amount of “subpart F income” (as defined
in Section 952(a) of the Code) or holds a material amount of “United States
property” (within the meaning of Section 956(c) of the Code), or (ii) a passive
foreign investment company as defined in Section 1297 of the Code.

(j)        No Company Entity has participated or engaged in any “reportable
transaction” within the meaning of Treasury Regulation Section 1.6011-4 (or any
corresponding or similar provision of applicable Law).

(k)        No extension or waiver of the limitation period applicable with
respect to Taxes or Tax Returns of, or with respect to, any Company Entity has
been granted (by such Company Entity or any other Person), and no such extension
or waiver has been requested (formally or informally) by or from such Company
Entity, which waiver or extension is still effective and has not lapsed.

(l)        The Company Entities have complied in all material respects with all
applicable Law relating to the collection and withholding of Taxes (including
all information reporting and record keeping requirements) and all such Taxes,
including all such Taxes with respect to amounts paid or owing to any employee,
independent contractor, creditor, stockholder, foreign Person, or other third
party, have been duly paid within the time and in the manner prescribed by
applicable Law by or on behalf of the Company Entities.

(m)        There are no material Liens for Taxes on any of the assets of any
Company Entity, other than Permitted Liens.

(n)        No Company Entity has received, applied for, or requested (i) any Tax
ruling or (ii) any advance pricing agreement, closing agreement or other
agreement or practice relating to Taxes or Tax matters, in each case, with a
Taxing Authority that is currently in force and determines the Tax liabilities
of, or with respect to, such Company Entity. There are no tax allocation or
other agreements with or relating to any income or other Taxes with any other
Person to which the Company Entities is now or ever has been a party.

(o)        No Company Entity or the Buyer will be required to include any
material item of income or gain in, or exclude any material item of loss or
deduction from, the determination of taxable income for any Taxing Period ending
after the Closing Date as a result of any: (i) change in method of accounting
for a Taxing Period ending on or prior to the Closing Date under Section 481 of
the Code (or any similar or corresponding provision of state, local or foreign
Law); (ii) installment sale or open transaction made or entered into on or prior
to the Closing Date; (iii)

 

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prepaid amount received on or prior to the Closing Date; (iv) intercompany
transaction or excess loss account described in Treasury Regulations under
Section 1502 of the Code (or any similar or corresponding provision of state,
local or foreign Law); or (v) any election under Section 108(i) of the Code to
defer the recognition of any cancellation of indebtedness income.

(p)        The Company Entities are in compliance in all material respects with
the provisions of the Code and the Treasury Regulations promulgated thereunder
as necessary to avoid any material redistribution, reapportionment,
reallocation, recharacterization, or adjustment pursuant to Section 482 of the
Code or any similar or corresponding provision of state, local, or foreign Law
(including all contemporaneous transfer pricing documentation requirements and
any provisions of an applicable income tax treaty).

(q)        The Company qualifies as (and has since the date of its formation
qualified) as a partnership for U.S. federal income tax purposes (and not as an
association taxable as a corporation).

(r)        No Company Entity has made an entity classification election pursuant
Treasury Regulation Section 301.7701-3(c).

(s)        No power of attorney has been executed or filed with any Taxing
Authority by or on behalf of any Company Entity that will remain in effect on or
after the Closing Date, other than powers of attorney entered into with tax
preparers in the Ordinary Course of Business.

(t)        Each Company Entity has maintained all material records in relation
to Tax as it is required by applicable laws to maintain.

(u)        No Company Entity is a party to any joint venture, partnership, or
other entity or arrangement that is treated as a partnership for U.S. federal
income tax purposes.

(v)        No Company Entity that is treated as an association taxable as a
corporation for U.S. federal income tax purposes has any net operating loss
carryforwards that are subject to limitations under Section 382 of the Code (or
any similar or corresponding provision of state, local or foreign Law).

(w)        No Company Entity has participated in, or cooperated with, an
international boycott within the meaning of Section 999 of the Code.

(x)        No Company Entity has made an election described in Section 965(h) of
the Code.

(y)        No Company Entity that is treated as a partnership for U.S. federal
income tax purposes has made an election under Section 1101(g)(4) of the
Bipartisan Budget Act of 2015.

(z)        The Company has filed an election under Section 754 of the Code to
provide for an adjustment to the basis of the Company’s assets in connection
with the disposition of an interest in the Company.

 

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Section 4.17.    Insurance. Section 4.17 of the Disclosure Schedule sets forth a
complete and correct list of all current insurance policies relating to the
Company Entities or their respective employees, officers or directors,
including, with respect to each policy, the carrier, policy number, expiration
date and a general description of the type of coverage provided (including
whether it is a “claims made” or an “occurrence based” policy). All such
policies are in full force and effect. There is no material pending claim by the
Company Entities under any of such policies with respect to which coverage has
been questioned, denied or disputed in writing by the underwriters of such
policies (other than a customary reservation of rights notice). All premiums due
and payable under such policies have been timely paid, and the Company Entities
have otherwise complied in all material respects with the terms and conditions
of such policies. To the Knowledge of the Company, there has been no material
threatened termination or non-renewal of, premium increase with respect to, or
alteration of coverage under, any of such policies.

Section 4.18.    Customers and Suppliers.

(a)        Section 4.18(a) of the Disclosure Schedule sets forth a complete and
correct list of (i) the names of the top 10 customers of the Company Entities
(based on the aggregate purchase price of products and services provided) for
the year ended on the Balance Sheet Date; and (ii) the amount of purchases (by
gross sales) by each such customer during such period, expressed as a percentage
of the Company Entities’ consolidated net revenues for such period. No Company
Entity has received any written notice that any such customer (A) has ceased or
will cease to use the products or services of the Company Entities; (B) has
materially reduced or will materially reduce the use of products or services of
the Company Entities; or (C) has sought to reduce the price it will pay for
products or services of the Company Entities, including, in each case, as a
result of this Agreement or the Transactions.

(b)        Section 4.18(b) of the Disclosure Schedule sets forth a complete and
correct list of (i) the names of the top 10 suppliers to the Company Entities
(based on the aggregate purchase price of raw materials, supplies or other
products or services ordered) for the year ended on the Balance Sheet Date; and
(ii) the amount of orders from each such supplier during such period. No Company
Entity has received any written notice that (A) there has been any material
adverse change in the price of any raw materials, supplies or other products or
services provided by any such supplier; or (B) any such supplier will not sell
raw materials, supplies and other products and services to the Company Entities
after the Closing Date on terms and conditions that are substantially similar to
those used in its current sales to the Company Entities, subject to general and
customary price increases, including, in each case, as a result of this
Agreement or the Transactions.

Section 4.19.    Accounts Receivable. All Accounts Receivable reflected on the
Audited Financial Statements and the Unaudited Financial Statements have been
generated in the Ordinary Course of Business and reflect a bona fide obligation
for the payment of goods or services provided by the Company Entities. To the
Knowledge of the Company, as of the date hereof, there are no facts or
circumstances, other than general economic conditions, that would reasonably be
expected to result in any material increase in the uncollectibility of such
receivables in excess of the reserves therefor reflected in the Audited
Financial Statements or the Unaudited Financial Statements, as applicable.

 

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Section 4.20.    Inventories. Except for (a) immaterial or obsolete, damaged or
outdated inventory written down on the Financial Statements or the books and
records of the Company Entities in the Ordinary Course of Business in accordance
with GAAP or (b) inventories, spare parts and other supplies with a value of
less than $2,500,000 in the aggregate, (i) all inventories of the Company
Entities are of good, usable and merchantable quality in all material respects
and do not include obsolete or discontinued items; and (ii) all inventories are
recorded on the books and records of the Company Entities at the lower of cost
or net realizable value.

Section 4.21.    Food Safety. Without limiting the generality of Section 4.12:

(a)        Since January 1, 2015, each Company Entity, and all products
manufactured, marketed, serviced, produced, modified, sold or distributed by or
on behalf of the Company Entities (“Products”) have complied in all material
respects, and are in compliance in all material respects, with (i) all
applicable Food Safety Laws and (ii) all terms and conditions imposed in any
Permits granted to such Company Entities by any Food Authority. The foregoing
includes, but is not limited to, any applicable good manufacturing practices and
sanitation requirements, labeling and advertising requirements, laws or
regulations pertaining to foodborne illnesses, requirements relating to food or
color additives, food standards, product composition requirements, testing
requirements or protocols, recordkeeping or reporting requirements, monitoring
requirements, packaging (including co-packing and re-packing) requirements,
laboratory controls, storage and warehousing procedures, shipping requirements
and shelf-life requirements.

(b)        None of (i) the Company Entities, any Product or the facilities in
which the Products are manufactured, processed, packaged or held or (ii) to the
Knowledge of the Company, with respect to the Products, the Persons that
manufacture, process, package, or supply ingredients and packaging materials for
or distribute the Products, has received or is subject to, or since January 1,
2015 has been subject to, (A) any written warning letter, untitled letter,
notice of inspectional observation (FDA Form 483) or other adverse
correspondence or notice from the FDA, Notice of Suspension or Notice of
Intended Enforcement or other adverse correspondence or notice from the USDA or
state or local authorities with oversight of food safety or (B) any import
detention, investigation, suspension or withdrawal of inspection or
registration, penalty assessment or other compliance or enforcement action by
any Food Authority, except for those to which the Company Entities responded.

(c)        Except as would not reasonably be expected to be, individually or in
the aggregate, material to the Company Entities taken as a whole, none of the
Company Entities or, to the Knowledge of the Company, with respect to the
Products, the Persons that manufacture, process, package, supply ingredients for
or distribute the Products, has, since January 1, 2015, (i) voluntarily or
involuntarily initiated, conducted or issued, or caused to be initiated,
conducted or issued, any recall, field alert, filed correction, market
withdrawal or replacement, safety alert or other notice or action relating to an
alleged lack of safety or regulatory compliance of any Product, or (ii) as a
result of any action taken by a Food Authority or other Governmental Entity
against any Company Entity, (A) made a change in the labeling of any Product, or
(B) terminated or suspended the marketing of any Product. To the Knowledge of
the Company, there are no facts or circumstances that would be reasonably likely
to cause any (I) Food Authority to require the recall, market withdrawal or
replacement of any Product, or (II) Company Entity, as the result of

 

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any action of a Food Authority or other Governmental Entity, to make a material
change in the labeling of any Product, or to terminate or suspend the marketing
of any Product.

(d)        Since January 1, 2015, to the Knowledge of Company, no Company Entity
has received written notice of any class action lawsuit against any Company
Entity related to product liability claims.

Section 4.22.    Affiliate Transactions; Guaranties.

(a)        There are no Contracts between or among any Company Entity, on the
one hand, and any officer, director or member of any Company Entity, or, to the
Knowledge of the Company, any Affiliate of any officer, director or member of
any Company Entity, on the other hand, other than compensatory arrangements in
respect of employment or Contracts entered into on an arm’s length basis with
terms at least as favorable to the applicable Company Entity as a Contracts
reasonably available from any third-party or an existing provider of the Company
Entities.

(b)        None of the Liabilities of the Company Entities is guaranteed by any
other Person (other than another Company Entity). None of the Company Entities
has guaranteed or become subject to a similar contingent obligation in respect
of the obligations or liabilities of any other Person (other than another
Company Entity). There are no outstanding letters of credit, surety bonds or
similar instruments of any member of the Company or any of their respective
Affiliates (other than the Company Entities) serving as credit support in
connection with operation of the business of the Company Entities as currently
conducted.

Section 4.23.    Brokers. Other than fees or commissions for which the Sellers
will be solely responsible, no Company Entity has any Liability or obligation to
pay fees or commissions to any broker, finder or agent with respect to the
Transactions.

Section 4.24.    Disclaimer of Warranties. Except as set forth in Article III
and this Article IV (as qualified or modified by the Disclosure Schedule), (a)
the Purchased Interests (including, indirectly through the sale of the Purchased
Interests, the assets, properties, liabilities, condition, operations or
prospects of the Company Entities) are being sold on an “as is, where is” basis
as of the Closing and (b) no Seller nor any of their respective Affiliates
(except for the Sellers as provided in Article III), nor any of their respective
Representatives, have made, or shall be deemed to have made, any other
representation or warranty, express or implied, at law or in equity, in respect
of the Purchased Interests or the assets, properties, liabilities, condition,
operations or prospects of the Company Entities, including with respect to
(i) merchantability or fitness for any particular purpose, (ii) the operation of
the business of the Company Entities after the Closing, (iii) the probable
success or profitability of the business of the Company Entities after the
Closing or (iv) the accuracy or completeness of any Evaluation Material, or the
appropriateness or suitability of such information for the purposes of enabling
the Buyer to evaluate the consummation of the Transactions. Any such other
representations or warranties are hereby expressly disclaimed. Other than the
indemnification obligations of the Sellers set forth in Section 10.1, none of
the Company, its Affiliates nor any of their respective Representatives will
have or be subject to any liability or indemnification obligation to the Buyer
or any other Person resulting from the

 

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distribution to the Buyer, its Affiliates or their respective Representatives
of, or the Buyer’s use of or reliance on, any Evaluation Material in expectation
of the Transactions.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer represents and warrants to the Sellers and the Company that each
statement contained in this Article V is true and correct as of the date hereof
and as of the Closing Date, except as set forth in the Disclosure Schedule:

Section 5.1.    Organization and Existence. The Buyer is a corporation duly
incorporated, validly existing and in good standing under the Laws of Delaware.

Section 5.2.    Authority and Enforceability. The Buyer has the requisite
corporate power and authority to execute and deliver this Agreement, to perform
its obligations hereunder and to consummate the Transactions. The execution,
delivery and performance by the Buyer of this Agreement, and the consummation by
the Buyer of the Transactions, have been duly authorized by all necessary
corporate action on the part of the Buyer, and no other action is necessary on
the part of the Buyer to authorize this Agreement or to consummate the
Transactions. This Agreement has been, duly executed and delivered by the Buyer,
and, assuming the due authorization, execution and delivery by the Sellers, this
Agreement constitutes a legal, valid and binding obligation of the Buyer,
enforceable against the Buyer, in accordance with its terms, except as limited
by (a) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance
or other similar Laws relating to creditors’ rights generally and (b) general
principles of equity, whether such enforceability is considered in a proceeding
in equity or at Law.

Section 5.3.    Noncontravention.

(a)        Neither the execution, delivery and performance by the Buyer of this
Agreement, nor the consummation of the Transactions by the Buyer, will, with or
without the giving of notice or the lapse of time or both, (i) violate any
provision of the Organizational Documents of the Buyer, (ii) violate any Law or
Order applicable to the Buyer or (iii) result in a breach of or default under,
require consent under or violate any material Contract to which the Buyer is a
party, except in the case of clauses (ii) and (iii) to the extent that any such
breach, default, consent or violation would not reasonably be expected to be,
individually or in the aggregate, material to the Buyer’s ability to timely
perform its obligations hereunder.

(b)        Except as set forth in Section 6.7, no Permit or Filing is required
by the Buyer in connection with the execution and delivery by the Buyer of this
Agreement, the performance by the Buyer of its obligations hereunder and the
consummation by the Buyer of the Transactions, as applicable, other than
(i) Permits and Filings that have been obtained or made by the Buyer prior to
the date hereof and (ii) Permits and Filings the failure of which to obtain or
make would not reasonably be expected to be, individually or in the aggregate,
material to the Buyer’s ability to timely perform its obligations hereunder.

Section 5.4.    Legal Proceedings. There are no Legal Proceedings pending or, to
the Knowledge of the Buyer, threatened against or otherwise relating to the
Buyer that (a)

 

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challenge or seek to enjoin, alter or materially delay the Transactions or
(b) would reasonably be expected to be, individually or in the aggregate,
material to the Buyer’s ability to timely perform its obligations hereunder.

Section 5.5.    Financing.

(a)        The Buyer has delivered to the Sellers’ Representative complete and
correct copy of a commitment letter, dated as of the date hereof, from
Coöperatieve Rabobank U.A., New York branch (together with all associated fee
letters, which may be redacted in customary fashion, the “Financing
Commitment”), pursuant to which Coöperatieve Rabobank U.A., New York branch, has
advised the Buyer that it is prepared to provide up to an aggregate
$1,000,000,000 (inclusive of the Deposit) of debt financing to the Buyer or any
direct or indirect wholly-owned Affiliates of the Guarantor in order to finance
the Transactions, subject to the terms and conditions thereof (the “Debt
Financing”). As of the Closing Date, the Buyer will have sufficient funds
available to enable it to (i) pay the Closing Amount payable under Article II
and to satisfy all other payments required by this Agreement, (ii) pay any
related fees, costs and expenses incurred by the Buyer in connection with the
Transactions and (iii) otherwise consummate the Transactions contemplated by
this Agreement.

(b)        As of the date of this Agreement, the Financing Commitment is in full
force and effect and has not been withdrawn or terminated, or otherwise amended
or modified, in any respect, and no withdrawal, termination, amendment or
modification is contemplated. The Financing Commitment is a legal, valid and
binding obligation of the Buyer, and to the Knowledge of the Buyer, the
Financing Sources. There are no other agreements, side letters, or arrangements
relating to the Financing Commitment that could affect the availability of the
Debt Financing, and the Buyer does not know of any facts or circumstances that
may be expected to result in any of the conditions set forth in the Financing
Commitment not being satisfied, or the Debt Financing not being available to the
Buyer, on the Closing Date. No event has occurred that, with or without notice,
lapse of time or both, would constitute a default or breach on the part of the
Buyer under any term or condition of the Financing Commitment, and the Buyer has
no reason to believe that it will be unable to satisfy on a timely basis any
term or condition of closing to be satisfied by it contained in the Financing
Commitment. The Buyer has fully paid any and all commitment fees or other fees
required by the Financing Commitment to be paid on or before the date of this
Agreement. The Financing Commitment contains all of the conditions precedent to
the obligations of the parties thereunder to make the Debt Financing available
to the Buyer on the terms therein.

(c)        It is acknowledged and agreed by the Parties that the obligations of
the Buyer and the Guarantor under this Agreement are not subject to any
conditions regarding the Buyer’s, its Affiliates’, or any other Person’s ability
to obtain financing for the consummation of the Transactions.

Section 5.6.    Investment Matters. The Buyer acknowledges that the Purchased
Interests being acquired pursuant to this Agreement have not been registered
under the Securities Act of 1933, as amended, or under any state or foreign
securities Laws, and that the Purchased Interests may not be sold, transferred,
assigned, offered for sale, pledged, hypothecated or otherwise disposed of
unless such sale, transfer, assignment, offer for sale, pledge, hypothecation,
or other disposition is completed pursuant to the terms of an effective
registration under the

 

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Securities Act of 1933 and is registered under or pursuant to an exemption from
registration under the Securities Act of 1933 and any applicable state or
foreign securities Laws. The Buyer is purchasing the Purchased Interests for its
own account and not with a view to any public resale or other distribution
thereof, except in compliance with applicable securities Laws, and neither the
admission of the Buyer as a member of the Company, nor the ownership of the
Purchased Interests by the Buyer, will subject the Company to a material
regulatory requirement or obligation to which it was not otherwise subject.

Section 5.7.    Brokers. Other than fees or commissions for which the Buyer will
be solely responsible, the Buyer does not have any Liability to pay fees or
commissions to any broker, finder or agent with respect to the Transactions.

Section 5.8.    Independent Investigation. The Buyer has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of its participation in the Transactions and is able to
bear the economic risk associated with the purchase of the Purchased Interests.
The Buyer has conducted its own independent review and analysis of the
Evaluation Material, and based thereon has formed an independent judgment
concerning, the assets, properties, liabilities, condition, operations and
prospects of the business of the Company Entities and the Purchased Interests.
In entering into this Agreement, the Buyer has relied solely upon its own review
and analysis of the Evaluation Material and the specific representations and
warranties of the Sellers and the Company expressly set forth in Article III
and Article IV and not on any representations, warranties, statements or
omissions by any Person other than the Sellers or the Company, or by the Sellers
or the Company other than those specific representations and warranties
expressly set forth in Article III and Article IV.

ARTICLE VI

COVENANTS

Section 6.1.    Conduct of Business. During the Interim Period, the Company
Entities shall conduct their business in the Ordinary Course, use its
commercially reasonable efforts to preserve intact the business of the Company
Entities, the Assets and the relationships of the Company Entities with their
respective customers and suppliers and others having business dealings with
them, and keep available the services of the present officers and significant
employees of the Company Entities. Without limiting the foregoing, during the
Interim Period, except as (x) required by Law or as otherwise permitted or
required by this Agreement, (y) set forth on Section 6.1 of the Disclosure
Schedule or (z) consented to by the Buyer, which consent shall not be
unreasonably withheld, conditioned or delayed, the Company Entities shall not:

(a)        change or amend its Organizational Documents;

(b)        issue, sell or grant any rights to purchase or subscribe to, or enter
into any Contract with respect to the issuance or sale of, any of Equity
Securities in the Company Entities or make any changes (by stock split, reverse
stock split, combination, recapitalization, reorganization, formation of new
subsidiaries or otherwise) in the corporate or capital structure of the Company
Entities;

 

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(c)        enter into, assume or amend any Material Contract or any Contract
that would be a Material Contract, other than in the Ordinary Course of
Business;

(d)        terminate, cancel, fail to renew in the Ordinary Course of Business
or take or omit to take any action that could reasonably be expected to cause or
result in a material breach of or default under any Material Contract, other
than terminations, cancellations, failures to renew, actions omitted or actions
taken in the Ordinary Course of Business;

(e)        other than in the Ordinary Course of Business, including Ordinary
Course promotions and annual increases of base salary and the payment of
bonuses, or as required pursuant to any Company Benefit Plan or existing
written, binding agreements in effect prior to the date of this Agreement, or as
otherwise required by applicable Law, (i) grant or provide any severance or
termination payments or benefits to any director, officer or employee of the
Company Entities; (ii) materially increase the compensation, bonus or pension,
welfare, severance or other benefits of, pay any bonus to, or make any new
equity awards to any director, officer or employee of the Company Entities;
(iii) establish, adopt, materially amend or terminate any Company Benefit Plan
or any equity-based awards; (iv) take any action to accelerate the vesting or
payment, or fund or in any other way secure the payment, of compensation or
benefits under any Company Benefit Plan, to the extent not already provided in
any such Company Benefit Plan; (v) change any actuarial or other assumptions
used to calculate funding obligations with respect to any Company Benefit Plan
or to change the manner in which contributions to such plans are made or the
basis on which such contributions are determined, except as may be required by
GAAP; (vi) forgive any loans to directors, officers or employees of the Company
Entities; (vii) enter into any Company Labor Agreement; or (viii) hire or
terminate the employment of any Key Employees or any officers of the Company
Entities other than for “cause” (as such term is defined in the applicable
employment agreement, or in the absence thereof, in the applicable policies of
the Company Entities);

(f)        (A) prepare any Tax Return required to be filed in a manner that is
not consistent with past practices (or if there is no past practice with respect
to any item includable in any such Tax Return, take a position take with respect
to such item that would be reasonably expected to have an adverse effect on the
Buyer or on any Company Entity after the Closing Date), (B) fail to duly and
timely file any such Tax Return or (C) fail to pay promptly all Taxes and
governmental charges that are claimed by any Governmental Entity as and when
due, except for such Taxes that are being disputed in good faith and for which
adequate reserves have been set aside in accordance with GAAP;

(g)        (A) adopt or change any Tax or accounting methods, policies or
practices, except as required by a change in GAAP or applicable Tax Law,
(B) make, revoke or amend any Tax election (including any election under
Section 754 of the Code), (C) file any amended Tax Return or claim for a Tax
refund, offset or other reduction in Tax liability, or (D) surrender any claim
for a refund of Taxes, to the extent that any such action (x) will, or is
reasonably likely to, affect an amount of Taxes of the Company Entities or the
Buyer in excess of $200,000 or (y) when taken together with the other actions
described in this subsection (g) will, or is reasonably likely to, affect an
amount of Taxes of the Company Entities or the Buyer in excess of $400,000;

 

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(h)        (A) change any annual Tax accounting period, (B) enter into or
terminate any agreement with a Taxing Authority, (C) request any Tax ruling,
(D) settle or compromise any Tax proceeding over any amount reserved therefor in
the Financial Statements, (E) grant any power of attorney relating to Taxes, or
(F) consent to any extension or waiver of the limitation period applicable with
respect to any Tax claim or assessment;

(i)        forgive, cancel or compromise any Indebtedness, or transfer, waive or
release any right of material value with respect to the business of the Company
Entities, other than in the Ordinary Course of Business;

(j)        fail to pay or satisfy when due any material Liability of the
business of the Company Entities (other than any such Liability that is being
contested in good faith and by appropriate Legal Proceedings);

(k)        fail to maintain all of the material tangible Assets in good repair,
working order and operating condition subject only to ordinary wear and tear;

(l)        make any material change in its selling, distribution or pricing
practices, including by accelerating the delivery or sale of products or the
incurrence of capital expenditures, or offering discounts on sales of products
or premiums on purchases of raw materials, other than in the Ordinary Course of
Business; or

(m)      agree or commit to do any of the foregoing.

Notwithstanding anything to the contrary set forth herein, the Company Entities
shall be permitted to declare, set aside and pay distributions during the
Interim Period; provided, however, that the Company shall not distribute any
Cash, pay any Cash dividend to its equityholders or incur any additional
Indebtedness (other than interest that is accrued in the Ordinary Course of
Business) during the period commencing on 12:01 a.m. Eastern Time on the Closing
Date through the Closing.

Section 6.2.    Access to Information. During the Interim Period, the Sellers
and the Company Entities shall provide the Buyer and its Representatives with
access to information regarding the Company Entities and their operations, in
each case, as reasonably requested by the Buyer, other than information (a) that
any Seller reasonably believes it or any Company Entity is prohibited from
providing to the Buyer by reason of applicable Law, (b) that constitutes or
allows access to information protected by attorney/client privilege or (c) that
any Seller or any Company Entity is required to keep confidential or to prevent
access to by reason of any Contract with a third party; provided, however, that
such access (i) shall be conducted at the Buyer’s expense, during normal
business hours and under the supervision of personnel of the Company Entities,
(ii) does not disrupt the normal operations of the Company Entities and
(iii) shall comply with all applicable Laws, including those regarding the
exchange of competitively sensitive information. All of such information shall
be treated as Evaluation Material subject to the terms of the Confidentiality
Agreement, the provisions of which are hereby incorporated herein and
acknowledged by the Parties as a continuing obligation in accordance with its
terms. Notwithstanding anything to the contrary contained herein, the Buyer
shall not be permitted during the Interim Period to contact any Company Entity’s
vendors, employees, customers or suppliers,

 

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or any Governmental Entities (except in connection with applications for Permits
or Filings required to be made prior to the Closing under this Agreement and, in
such case, only in accordance with the terms of this Agreement) regarding the
operations or legal status of the Company Entities without receiving prior
written consent from the Sellers’ Representative.

Section 6.3.    Financial Statements. During the Interim Period, (a) on or
before the 21st day of each month, the Company shall deliver to the Buyer
unaudited consolidated financial statements of the Company Entities as at and
for the monthly period ending the last Saturday of the preceding calendar month,
each of which shall include a balance sheet and statement of income and (b) on
or before Wednesday of each week, the Company shall deliver to the Buyer
unaudited management accounts of the Company Entities for the previous week in
the form of Section 6.3 of the Disclosure Schedule.

Section 6.4.    Exclusivity. During the Interim Period, none of the Sellers, the
Company Entities nor any of their respective Representatives shall, directly or
indirectly, enter into, solicit, initiate or continue any discussions or
negotiations with, or encourage or respond to any inquiries or proposals by, or
participate in any negotiations with, or provide any information to, or
otherwise cooperate in any way with, any Person or other entity or group,
concerning any sale of all or substantially all of the assets of the Company
Entities, taken as a whole, or any of the Purchased Interests or any conversion,
consolidation, liquidation, dissolution or similar transaction involving the
Company other than with the Buyer and its Representatives.

Section 6.5.    Confidentiality; Publicity. The Buyer and the Sellers’
Representative shall reasonably cooperate to prepare, and mutually agree to the
text of, a public announcement regarding the Transactions promptly following the
date hereof. Notwithstanding the foregoing, none of the Parties will make any
public announcement or issue any public communication regarding this Agreement
or the Transactions or any matter related to the foregoing, without the prior
written consent of the Sellers’ Representative, in the case of a public
announcement by the Buyer, or the Buyer, in the case of a public announcement by
the Sellers (such consents, in either case, not to be unreasonably withheld,
conditioned or delayed), except (a) if such announcement or other communication
is required by applicable Law or Order, in which case the disclosing Party
shall, to the extent permitted by applicable Law or Order, first allow such
other Party to review such announcement or communication and the opportunity to
comment thereon, and the disclosing Party shall consider such comments in good
faith; (b) internal announcements to Employees of the Company Entities; and
(c) announcements and communications to Governmental Entities in connection with
Filings or Permits relating to the Transactions required to be made under this
Agreement.

Section 6.6.    Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the Transactions are consummated, each Party will pay
its own costs and expenses incurred in anticipation of, relating to and in
connection with the negotiation and execution of this Agreement and the
consummation of the Transactions. Notwithstanding the immediately preceding
sentence, (a) the Buyer shall pay (i) all filing fees required by Governmental
Entities, including with respect to Filings or Permits required in connection
with the execution and delivery of this Agreement, the performance of the
obligations hereunder and the consummation of the Transactions, including filing
fees in connection with filings under the HSR Act or other Antitrust Laws, and
(ii) all costs of obtaining the R&W Insurance Policy,

 

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including any premiums, underwriting fees, due diligence fees and other costs or
fees payable in connection therewith, and (b) on or prior to Closing, the
Sellers shall pay or cause to be paid all Company Transaction Expenses without
using Cash or other asset that is held at the Company Entities; provided, that
the Sellers may pay the Company Transaction Expenses out of the Closing Amount
to be paid by the Buyer to the Sellers at Closing; provided, further, that, upon
delivery by the Buyer or the Company Entities of reasonable documentation
thereof to the Sellers’ Representative, the Sellers shall promptly reimburse the
Company in full for any Company Transaction Expense that remains unpaid
following Closing.

Section 6.7.    Governmental Filings.

(a)        Subject to the terms and conditions of this Agreement, each of the
Parties shall, and the Company shall cause the Company Subsidiaries to,
cooperate with each other and shall use (and cause their respective Subsidiaries
to use) their reasonable best efforts to take or cause to be taken all actions,
and do or cause to be done, and reasonably assist and cooperate with the other
Parties in doing, all things necessary, proper or advisable to comply promptly
with all legal requirements that may be imposed on such Party or its
Subsidiaries with respect to the Agreement and, subject to the conditions set
forth in Article VII, to consummate the Transactions as soon as practicable.

(b)        Without limiting the generality of Section 6.7(a), within five
Business Days following the execution of this Agreement, the Parties shall, and
the Company shall cause the Company Subsidiaries to use their best efforts to,
file with (i) the United States Federal Trade Commission and the United States
Department of Justice, the Notification and Report Form required for the
Transactions pursuant to the HSR Act; and (ii) any other Antitrust Authority,
any other Filings, reports, information and documentation required for the
Transactions pursuant to any other applicable Antitrust Laws, as set forth on
Section 6.7(b) of the Disclosure Schedule.

(c)        The Parties shall, and the Company shall cause the Company
Subsidiaries to, supply as promptly as practicable any additional information or
documents that may be requested pursuant to the HSR Act or any other applicable
Antitrust Laws and shall take all other actions necessary to cause the
expiration or termination of the applicable waiting periods and to obtain any
Permit required under any applicable Antitrust Laws as soon as practicable. The
Parties shall, and the Company shall cause the Company Subsidiaries to, comply
substantially with any additional requests for information, including requests
for production of documents and production of witnesses for interviews,
investigational hearings or depositions, made by the Antitrust Authorities and
take all other actions to obtain all applicable consents, approvals, clearances
or waivers from the Antitrust Authorities at the earliest practicable dates and
prior to terminating this Agreement pursuant to Section 9.1. Other than such
Filings under the HSR Act or any other applicable Antitrust Laws, the filing of
which shall be made in accordance with Section 6.7(b), the Parties will, and
will cause the Company to, as soon as reasonably practicable, prepare and file
with each applicable Governmental Entity all Filings and requests for such other
Permits as may be necessary for the consummation of the Transactions in
accordance with the terms of this Agreement. The Parties will, and will cause
the Company Entities to, diligently pursue and use their best efforts to obtain
such Permits as soon as reasonably practical and will cooperate with each other
in seeking such Permits. To such end, the Parties agree to make available the
personnel and other resources of their respective organizations in order to
obtain all such Permits. Each Party

 

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will promptly inform the other Parties of any material communication received by
such Party from, or given by such Party to, any Governmental Entity from which
any such Permit is required and of any material communication received or given
in connection with any Legal Proceeding by a private party, in each case
regarding any of the Transactions, and will permit the other Party to review any
communication given by it to, and consult with each other in advance of any
response to, or meeting or conference with, any such Governmental Entity or, in
connection with any Legal Proceeding by a private party, with such other Person,
and to the extent permitted by such Governmental Entity or other Person, give
the other Party the opportunity to review such response and to attend and to
participate in such meetings and conferences; provided, further, that neither
the Buyer nor its Affiliates shall have any obligation to litigate against the
United States Federal Trade Commission, the United States Department of Justice
or any other Antitrust Authority.

(d)        During the Interim Period, except with the consent of the Sellers’
Representative (which shall not be unreasonably withheld, delayed or
conditioned), the Buyer and its Affiliates shall not take any action, including
entering into any transaction, that would reasonably be expected to prevent or
materially delay the satisfaction of the condition set forth in Section 7.3(a).

(e)        Each of the Parties agrees to instruct its respective counsel to
cooperate with each other and use their best efforts to facilitate and expedite
the identification and resolution of any issues arising under any applicable
Antitrust Laws at the earliest practicable dates. Said reasonable best efforts
and cooperation include counsel’s undertaking (to the extent permitted by
applicable Law and in each case regarding the Transactions and without waiving
attorney-client or any other applicable privilege) to (i) furnish to each
other’s counsel such reasonably necessary information and reasonable assistance
as the other may request in connection with its preparation of any Filing or
submission that is necessary under the HSR Act and any other applicable
Antitrust Laws (except for sharing any Item 4(c) or Item 4(d) documents), and
(ii) cooperate in the filing of any substantive memoranda, white papers,
Filings, correspondence or other written or oral communications explaining or
defending this Agreement or any of the Transactions, articulating any regulatory
or competitive argument or responding to requests or objections made by any
Antitrust Authority or any Person. None of the Sellers, the Buyer or any of
their respective Affiliates or counsel shall independently contact any
Governmental Entity or participate in any meeting or discussion (or any other
communication by any means) with any Governmental Entity in respect of any such
filings, applications, investigation or other inquiry without giving, in the
case of the Buyer and its Affiliates, the Sellers’ Representative, and in the
case of the Sellers and their respective Affiliates, the Buyer, prior notice of
the meeting or discussion, the opportunity to confer with each other regarding
appropriate contacts with and responses to personnel of said Governmental
Entity, the opportunity to review and comment on the contents of any
representations (oral or otherwise) expected to be communicated at the meeting
or discussion, and, to the extent permitted by the relevant Governmental Entity,
the opportunity to attend and participate at the meeting or discussion (which,
at the request of the Buyer or the Sellers’ Representative, as applicable, shall
be limited to outside antitrust counsel only); provided further, however, that
the Buyer and the Sellers’ Representative agree to mutually approve any
substantive comment to be communicated to any Governmental Entity in advance.

 

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Section 6.8.    Further Actions; Financing.

(a)        Subject to the terms and conditions of this Agreement, the Parties
agree to use their reasonable best efforts (except where a different efforts
standard is specifically contemplated by this Agreement, in which case such
different standard shall apply) to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the Transactions prior to the Outside Date;
provided, that, without limitation to the final proviso of Section 6.7(c), in no
event shall the reasonable best efforts of the Buyer (or, if applicable, its
Affiliates) be deemed or construed to require the Buyer or its Affiliates to
initiate, threaten to initiate, maintain or otherwise agree or communicate any
intent to initiate, any Legal Proceeding against any Financing Source or BNDES
Participações S.A. or its Affiliates. For the avoidance of doubt, neither
Guarantor nor any of its Affiliates shall be deemed an Affiliate of BNDES
Participações S.A.

(b)        Subject to the terms and conditions of this Agreement, at any time
and from time to time after the Closing, at a Party’s request and without
further consideration, the other Parties shall execute and deliver to such
requesting Party such other instruments of sale, transfer, conveyance,
assignment and confirmation, provide such materials and information and take
such other actions as such Party may reasonably request in order to consummate
the Transactions.

(c)        Without limiting the foregoing, prior to the Closing, at the request
of the Buyer, the Sellers shall, and the Company shall cause the Company
Subsidiaries to, and shall request their respective Representatives to,
cooperate with the Buyer and its Representatives in connection with the Debt
Financing, which cooperation shall include (i) arranging reasonable
participation (upon prior reasonable notice and during normal business hours) by
appropriate senior officers of the Company Entities to meet with prospective
Financing Sources; (ii) furnishing the Buyer with information reasonably
requested by Buyer to facilitate the preparation of materials required for
lender presentations in connection with the financing and the preparation of
financing documents and other requested certificates and documents in connection
therewith; (iii) providing the financial information necessary for the
satisfaction of the obligations and conditions (if any) set forth in the
Financing Commitment within the time periods required thereby; (iv) issuing
customary letters to the arrangers under the Financing Commitment authorizing
the distribution of information to prospective lenders; (v) assisting with the
pledging of, and the granting and perfection of security interests in, the
Purchased Interests at Closing, as contemplated by the Financing Commitment
(including obtaining any necessary consents from other Persons); and
(vi) providing promptly upon request, all documentation and other information
required by regulatory authorities with respect to the Company and the Sellers
under applicable “know your customer” and anti-money laundering rules and
regulations, including the USA PATRIOT Act. All information provided, pursuant
to this Section 6.8(c) shall be provided without any representation or warranty
of the Sellers or any Company Entity or any of their respective Affiliates to
Buyer (except for any express representations set forth herein) or to any
Financing Sources. Nothing contained in this Section 6.8(c) shall require any
Seller or any Company Entity to: (A) make any representations in connection with
the financing or otherwise incur any actual or potential Liability or cost in
connection with the financing or any other Liabilities, obligations, fees and
expenses; (B) waive or modify any terms of this Agreement, (C) require any
Seller or any Company Entity to be in privity with any Financing Source or
(D) make representations not made or required by this Agreement. Additionally,
the Sellers and Company hereby consent to the use of the

 

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Company’s logos in connection with marketing the financing so long as logos are
used in a manner that is not intended to or reasonably likely to harm or
disparage Company or its reputation or goodwill. The Buyer shall indemnify and
defend the Sellers, the Company Entities, their respective Affiliates and their
respective stockholders, members, partners, managers, officers, directors,
employees and agents against, and shall hold each of them harmless from, any
Loss arising out of or resulting from any act taken by any Seller or any Company
Entity pursuant to this Section 6.8(c); provided, that the Buyer shall not be
obligated to provide such indemnity to the extent arising from information
furnished in writing by or on behalf of any Seller or any Company Entity. The
Buyer shall, promptly upon request by the Sellers’ Representative, reimburse the
Sellers and the relevant Company Entity, as applicable, for any and all
reasonable and documented out-of-pocket costs incurred by such Seller or such
Company Entity, as applicable, in connection with its cooperation pursuant to
this Section 6.8(c).

(d)        Buyer shall use its reasonable best efforts to take, or cause to be
taken, all actions and do, or cause to be done, all things necessary, proper or
advisable (in its reasonable judgment) to arrange the financing on the terms and
conditions described in or contemplated by the Financing Commitment (including
any “flex” provisions), which shall consist of the following: (i) maintaining in
effect the Financing Commitment, except as otherwise expressly provided
thereunder or hereunder; (ii) satisfying (or obtaining a waiver thereof) on a
timely basis all conditions applicable to the Buyer in the Financing Commitment
that are within its control, (iii) entering into definitive agreements with
respect to the Financing Commitment on the terms and conditions contemplated by
the Financing Commitment or on terms and conditions no less favorable (taken as
a whole) to Buyer (in the reasonable judgment of Buyer) than the terms and
conditions in the Financing Commitment; and (iv) in the event that all
conditions in the Financing Commitment (other than conditions with respect to
any equity financing and other than those conditions that by their nature are to
be satisfied at the Closing) have been satisfied or are capable of being
satisfied, and the conditions in Article VII of this Agreement have been
satisfied in accordance with the terms hereof, using reasonable best efforts in
causing the Financing Sources to consummate the Debt Financing contemplated by
the Commitment Letters at or prior to Closing. The Buyer shall give the Sellers’
Representative prompt written notice: (A) of any material breach or material
default by any party to the Financing Commitment of which the Buyer becomes
aware and to the extent such breach or default would reasonably be expected to
materially delay or prevent the Closing; (B) of the receipt of any written
notice or other written communication from any party to the Financing Commitment
with respect to any actual termination or cancellation by any party to any
Financing Commitment and (C) any written communication from any Person
indicating that the “Incremental Amendment” and the “Additional Term Loan
Facility” (as defined in the Financing Commitment) will not be completed on or
before the Closing.

Section 6.9.    R&W Insurance Policy. The Buyer will use commercially reasonable
efforts to negotiate and obtain, as promptly as reasonably practicable after the
date of this Agreement, a representations and warranties insurance policy (the
“R&W Insurance Policy”) for the benefit of the Buyer with a retention amount of
$4,000,000 (the “Retention Amount”) and otherwise on terms and conditions
(including policy liability limit) acceptable to the Buyer. The R&W Insurance
Policy is anticipated to be issued at or prior to the Closing by an insurance
carrier selected by the Buyer in the name and for the benefit of the Buyer
Indemnitees, covering certain potential Losses for which any Buyer Indemnitee
may be entitled to indemnification pursuant to Section 10.1. All premiums, fees,
costs and expenses of such R&W Insurance Policy will be borne

 

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by the Buyer; provided, that if the Sellers’ Representative requests in writing
to the Buyer on or before the date that is ten Business Days after the date
hereof, the Buyer will use commercially reasonable efforts to negotiate and
obtain a R&W Insurance Policy with a Retention Amount lower than $4,000,000
(including zero retention), in which case any increased cost of the premium for
the R&W Insurance Policy as a result of the reduced Retention Amount will be a
Company Transaction Expense. The Sellers and the Company shall provide such
reasonable cooperation to the Buyer and the applicable insurance provider as
reasonably requested by the Buyer and such insurance provider in connection with
obtaining such R&W Insurance Policy; provided, however, that (a) neither the
Company nor any Seller shall be required to incur any costs or expenses related
to such cooperation, and (b) any access or information provided by the Company
Entity or any Seller to the insurance carrier under the R&W Insurance Policy
shall be provided subject to, and in accordance with, Section 6.2. Following the
Closing, the Sellers shall provide reasonable cooperation to the Buyer, the
applicable insurance provider and the Company in connection with pursuing claims
under the R&W Insurance Policy if requested by Buyer or the applicable insurance
provider. Notwithstanding the foregoing or any other provision of this
Agreement, the Buyer acknowledges and agrees that the successful securing of the
R&W Insurance Policy shall not constitute a condition to the obligation of the
Buyer to consummate the Transactions.

Section 6.10.    Further Assurances. Following the Closing, each Seller and the
Buyer shall, and shall cause their respective Affiliates, from time to time, to,
execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably requested by the Buyer or the Sellers’ Representative (as
applicable), to confirm and assure the rights and obligations provided for in
this Agreement and render effective the consummation of the Transactions.

ARTICLE VII

CLOSING CONDITIONS

Section 7.1.    The Buyer’s Conditions to Closing. The obligation of the Buyer
to consummate the Transactions shall be subject to fulfillment at or prior to
the Closing of the following conditions, any one or more of which may be waived
in writing by the Buyer:

(a)        Representations and Warranties.

(i)        The Fundamental Representations of the Sellers and the Company shall
be true and correct in all respects other than de minimis inaccuracies (other
than in the case of the Specified Fundamental Representations, which shall be
true and correct in all respects) as of the date hereof and as of the Closing
Date as though made on and as of the Closing Date (except to the extent that any
such representation and warranty expressly speaks as of an earlier date, in
which case such representation and warranty shall be true and correct as of such
earlier date). For the avoidance of doubt, any failure of Fundamental
Representations of the Sellers and the Company to be true and correct shall be
deemed material (and not de minimis) to the extent such failure would prevent
the Buyer from consolidating with the Company Entities under International
Financial Reporting Standards; and

 

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(ii)        All other representations and warranties of the Sellers and the
Company set forth in Article III and Article IV hereof shall be true and correct
(without giving effect to any limitation as to “materiality” or “Material
Adverse Effect” or any similar limitation contained herein) as of the date
hereof and as of the Closing Date as though made on and as of the Closing Date
(except to the extent that any such representation and warranty expressly speaks
as of an earlier date, in which case such representation and warranty shall be
true and correct as of such earlier date), except where the failure of such
representations and warranties of the Sellers and the Company to be so true and
correct would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.

(b)        Compliance with Agreements. The covenants, agreements and obligations
required by this Agreement to be performed and complied with by the Sellers or
the Company at or prior to the Closing shall have been performed and complied
with in all material respects at or prior to the Closing Date.

(c)        Certificates. The Sellers’ Representative (on behalf of the Sellers)
shall execute and deliver to the Buyer a certificate dated as of the Closing
Date, stating that the conditions specified in Section 7.1(a) and Section 7.1(b)
have been satisfied.

(d)        No Material Adverse Effect. From the date hereof through the Closing
Date, there shall not have occurred any event, change, circumstance, effect,
occurrence, condition, state of facts or development that would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.

(e)        Documents. The Sellers’ Representative shall have delivered to the
Buyer or shall stand ready to deliver all of the certificates, instruments,
Contracts and other documents specified to be delivered by it in Section 2.3(b).

Section 7.2.    The Sellers’ Conditions to Closing. The obligations of the
Sellers to consummate the Transactions shall be subject to fulfillment at or
prior to the Closing of the following conditions, any one or more of which may
be waived in writing by the Sellers’ Representative:

(a)        Representations and Warranties.

(i)        The Fundamental Representations of the Buyer shall be true and
correct in all material respects (without giving effect to any limitation as to
“materiality” or “material adverse effect” or any similar limitation contained
herein) as of the Closing Date as though made on and as of the date hereof and
as of the Closing Date (except to the extent that any such representation and
warranty expressly speaks as of an earlier date, in which case such
representation and warranty shall be true and correct as of such earlier date);
and

(ii)        All other representations and warranties of the Buyer set forth in
Article V hereof and of the Guarantor set forth in Section 11.14(a) shall be
true and correct (without giving effect to any limitation as to “materiality” or
“material adverse effect” or any similar limitation contained herein) as of the
Closing Date as though made on and as of the date hereof and as of the Closing
Date (except to the extent that any such representation and warranty expressly
speaks as of an earlier date, in which case such representation and warranty
shall be true

 

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and correct as of such earlier date), except where the failure of such
representations and warranties of the Buyer or the Guarantor to be so true and
correct, individually or in the aggregate, would not reasonably be expected to
prevent or materially delay the consummation of the Transactions.

(b)        Compliance with Agreements. The covenants, agreements and obligations
required by this Agreement to be performed and complied with by the Buyer or the
Guarantor, as applicable, at or prior to the Closing shall have been performed
and complied with in all material respects at or prior to the Closing Date.

(c)        Certificates. The Buyer shall execute and deliver to the Sellers’
Representative a certificate executed by an authorized officer of the Buyer,
dated as of the Closing Date, stating that the conditions specified in
Section 7.2(a) and Section 7.2(b) have been satisfied.

(d)        Documents. The Buyer shall have delivered or shall stand ready to
deliver all of the certificates, instruments, Contracts and other documents
specified to be delivered by it in Section 2.3(a).

Section 7.3.        Mutual Conditions to Closing. The respective obligations of
the Parties to consummate the Transactions shall be subject to fulfillment at or
prior to the Closing of the following conditions, any one or more of which may
be waived by mutual written agreement of the Parties:

(a)        Governmental Approvals. All applicable waiting periods (and any
extensions thereof) under the HSR Act shall have expired or otherwise been
terminated.

(b)        Absence of Orders. No provision of any applicable Law prohibiting,
enjoining, restricting or making illegal the consummation of the Transactions
shall be in effect and no temporary, preliminary or permanent restraining Order
enjoining, restricting or making illegal the consummation of the Transactions
will be in effect.

(c)        A&R Operating Agreement. Each of USPB, NBPCo and New Kleinco shall
have delivered to the Company counterpart signature pages to the A&R Operating
Agreement, duly executed by such Person.

(d)        BNDES Consent. The Buyer shall have obtained and shall have delivered
to the Sellers’ Representative a complete and correct copy of the unconditional
Consent from BNDES Participações S.A. approving of the Transaction pursuant to
the Shareholders’ Agreement of the Guarantor dated August 5, 2010 as amended
from time to time (the “BNDES Consent”), and such Consent shall be in full force
and effect.

ARTICLE VIII

TAX MATTERS

Section 8.1.    Tax Returns. The Company shall prepare and file, or cause to be
prepared and filed, all Tax Returns required to be filed by it and any other
Company Entity for any Taxable Period ending on or before the Closing Date and
any Straddle Period that are due (taking

 

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into account applicable extensions) after the Closing Date in accordance with
the requirements of this Agreement and the A&R Operating Agreement.

Section 8.2.    Allocation of Straddle Period Taxes. Any Taxes attributable to a
Straddle Period shall be apportioned between the portion of such period ending
on the Closing Date and the portion beginning on the day after the Closing Date
(a) in the case of any Taxes determined on a periodic basis (such as real or
personal property or ad valorem Taxes), by apportioning such Taxes on a per diem
basis, and (b) in the case of all other Taxes (such as Income Taxes), unless
otherwise provided under the A&R Operating Agreement, as if the taxable period
ended as of the end of day on the Closing Date.

Section 8.3.    Transfer Taxes. The cost of all Transfer Taxes that may be
payable in connection with the transactions contemplated by this this Agreement
shall be borne 50% by the Sellers (severally, in proportion to their respective
Pro-Rata Shares, and not jointly) and 50% by the Buyer. The Party required to
file any Tax Return pursuant to applicable Law with respect to a Transfer Tax
shall prepare and timely file all Tax Returns required to be filed in respect of
Transfer Taxes, subject to review and consultation by the other Party, and pay
to the relevant Taxing Authority all Transfer Taxes that are shown as due on
such Tax Returns within the time and in the manner prescribed by applicable Law.
In the case that the Buyer or a Seller pays all of any Transfer Taxes, the Party
making the payment shall be entitled to reimbursement from the non-paying
Parties of the amount of any such Transfer Taxes required to be borne by such
non-paying Parties in accordance with the first sentence of this Section 8.3
within five Business Days after the date such Transfer Taxes are due; provided,
that if any Company Entity is required to pay any Transfer Taxes pursuant to
applicable Law, then each of the Buyer and the Sellers (severally, in proportion
to their respective Pro-Rata Shares, and not jointly) shall pay the relevant
Company Entity its 50% share of the cost of such Transfer Taxes paid by such
Company Entity within five Business Days after the date such Transfer Taxes are
due. Upon the reasonable written request of a Party, the Party so requested
shall execute and deliver all instruments and certificates necessary to enable
the requesting Party to comply with the foregoing.

ARTICLE IX

TERMINATION

Section 9.1.    Grounds for Termination.

This Agreement may be terminated at any time prior to the Closing as follows:

(a)        by either the Buyer (upon written notice from the Buyer to the
Sellers’ Representative) or the Sellers (upon written notice from the Sellers’
Representative to the Buyer) if the Closing shall not have occurred within six
months after the date of this Agreement (the “Outside Date”); provided, that the
terminating Party is not then in breach of any representation, warranty,
covenant or other agreement contained herein such that the conditions to Closing
set forth in Section 7.1(a), Section 7.1(b), Section 7.2(a), Section 7.2(b),
Section 7.3(a), Section 7.3(b) or Section 7.3(d), as applicable, would not have
been satisfied; provided, however, that, if the conditions set forth in
Section 7.3(a) are not satisfied as of the Outside Date, but all of the other
conditions set forth in Article VII are satisfied (other than those conditions
that by their

 

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nature are to be satisfied at the Closing), either Party may elect to extend the
Outside Date by six months;

(b)        by the Buyer (upon written notice from the Buyer to the Sellers’
Representative) if (i) there exists a breach of any representation or warranty
of the Sellers contained in this Agreement such that the closing condition set
forth in Section 7.1(a) would not be satisfied or (ii) the Sellers shall have
breached any of the covenants or agreements contained in this Agreement to be
complied with by the Sellers such that the Closing condition set forth in
Section 7.1(b) would not be satisfied; provided, that (A) the Buyer shall not be
entitled to terminate this Agreement pursuant to this Section 9.1(b) unless, in
the case of the immediately preceding clauses (i) or (ii), such breach is not
cured by the Sellers (including by Leucadia in accordance with Section 2.1(b))
within 30 days after the Sellers’ Representative receives written notice of such
breach from the Buyer (or such lesser period remaining prior to the date that is
one day prior to the Outside Date); and (B) the Buyer shall not be entitled to
terminate this Agreement pursuant to this Section 9.1(b) if, at the time of such
termination, the Buyer is in breach of any representation, warranty, covenant or
other agreement contained herein in a manner such that the conditions to Closing
set forth in Section 7.2(a) or Section 7.2(b), as applicable, would not have
been satisfied;

(c)        by the Sellers (upon written notice from the Sellers’ Representative
to the Buyer) if (i) there exists a breach of any representation or warranty of
the Buyer or the Guarantor contained in this Agreement such that the closing
condition set forth in Section 7.2(a) would not be satisfied, (ii) the Buyer or
the Guarantor shall have breached any of the covenants or agreements contained
in this Agreement to be complied with by the Buyer or the Guarantor, as
applicable, such that the closing condition set forth in Section 7.2(b) would
not be satisfied or (iii) the Guarantor shall have breached the covenant
contained in the last sentence of Section 11.14(b); provided, that (A) the
Sellers shall not be entitled to terminate this Agreement pursuant to this
Section 9.1(c) unless, in the case of the immediately preceding clauses (i) or
(ii), such breach is not cured by the Buyer or the Guarantor, as applicable,
within 30 days after the Buyer receives written notice of such breach from the
Sellers’ Representative (or such lesser period remaining prior to the date that
is one day prior to the Outside Date); and (B) the Sellers shall not be entitled
to terminate this Agreement pursuant to this Section 9.1(c) if, at the time of
such termination, the Sellers is in breach of any representation, warranty,
covenant or other agreement contained herein in a manner such that the
conditions to Closing set forth in Section 7.1(a) or Section 7.1(b), as
applicable, would not have been satisfied;

(d)        by either the Buyer (upon written notice from the Buyer to the
Sellers’ Representative) or by the Sellers (upon written notice from the
Sellers’ Representative to the Buyer) if there shall be in effect a final,
non-appealable Order prohibiting, enjoining, restricting or making illegal the
Transactions;

(e)        by the Sellers (upon written notice from the Sellers’ Representative
to the Buyer) if the condition set forth in Section 7.3(d) shall not have been
satisfied or waived in writing by the Parties by the date that is 135 days from
the date hereof; provided, that notice of such termination may be delivered by
the Sellers’ Representative at any time prior to the Closing; or

(f)        by mutual written agreement of the Parties.

 

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Section 9.2.    Effect of Termination. Termination of this Agreement pursuant to
Section 9.1 shall terminate all obligations of the Parties, except for the
obligations under Section 6.5, Section 6.6, this Section 9.2, Section 9.3,
Article XI and the Confidentiality Agreement; provided, however, that
termination pursuant to Section 9.1 shall not, subject to Section 9.3(e), (a)
relieve a defaulting or breaching Party (whether or not the terminating Party)
from any Liability to the other Party resulting from any intentional default or
breach hereunder or (b) relieve the Guarantor (whether this Agreement is
terminated by the Sellers or the Buyer) from any Liability to the Sellers
resulting from any intentional default or breach hereunder, in each case,
unless, with respect to a termination pursuant to Section 9.1(f), the Parties
have expressly waived such defaulting or breaching Party from any Liability
resulting from any such default or breach hereunder.

Section 9.3.    Deposit.

(a)        In consideration for the Sellers entering into this Agreement,
simultaneously with the execution hereof, the Guarantor has deposited the
Deposit with the Escrow Agent (by wire transfer of immediately available funds
in U.S. dollars to such account specified by the Escrow Agent), to be held by
the Escrow Agent in accordance with this Agreement and the Escrow Agreement.

(b)        If, on or prior to 5:00 p.m. eastern time on the date that is 135
days from the date hereof, the Buyer delivers the BNDES Consent to the Sellers’
Representative and the Deposit continues to be held by the Escrow Agent, the
Guarantor shall be entitled to instruct the Escrow Agent to disburse the Deposit
and the Deposit Interest to the Guarantor (by wire transfer of immediately
available funds in U.S. dollars to such account specified by the Guarantor).

(c)        Upon receipt by the Parties of early termination or expiration of the
applicable waiting period under the HSR Act, if the Deposit continues to be held
by the Escrow Agent, but the Buyer has not delivered the BNDES Consent to the
Sellers’ Representative, the Sellers’ Representative shall be entitled to
instruct the Escrow Agent to disburse the Deposit and the Deposit Interest to
the Sellers’ Representative (on behalf of the Sellers in proportion to their
respective Pro-Rata Shares and by wire transfer of immediately available funds
in U.S. dollars to such account specified by the Sellers’ Representative), and
following such disbursement:

(i)        if the Buyer delivers the BNDES Consent to the Sellers’
Representative on or prior to 5:00 p.m. eastern time on the date that is 135
days from the date hereof and the conditions to Closing set forth in Article VII
have not been satisfied (other than those conditions that by their nature are to
be satisfied at the Closing), the Sellers’ Representative shall refund the
Deposit and the Deposit Interest to the Guarantor (by wire transfer of
immediately available funds in U.S. dollars to such account specified by the
Guarantor) within one Business Day of the date of such delivery;

(ii)      if the Buyer delivers the BNDES Consent to the Sellers’ Representative
on or prior to 5:00 p.m. eastern time on the date that is 135 days from the date
hereof and the conditions to Closing set forth in Article VII have been
satisfied (other than those conditions that by their nature are to be satisfied
at the Closing), the Parties shall cause the Closing

 

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to occur and the Deposit and the Deposit Interest shall be applied to the
Purchase Price at Closing in accordance with Section 2.1; and

(iii)        if the Buyer does not deliver the BNDES Consent to the Sellers’
Representative on or prior to 5:00 p.m. eastern time on the date that is 135
days from the date hereof, the Sellers’ Representative shall have the option, in
its sole and absolute discretion, to terminate this Agreement in accordance with
Section 9.1(e), and retain (on behalf of the Sellers in proportion to their
respective Pro-Rata Shares) the Deposit and the Deposit Interest, and the
Sellers shall have no obligation to refund the Deposit or the Deposit Interest
to the Guarantor under any circumstances; provided, that (A) if the Sellers’
Representative does not so elect to terminate this Agreement and the Closing
occurs, the Deposit and the Deposit Interest shall be applied to the Purchase
Price at Closing in accordance with Section 2.1, and (B) if the Sellers’
Representative does not so elect to terminate this Agreement and this Agreement
is otherwise terminated for any reason pursuant to Section 9.1, the Deposit
shall be retained by the Sellers’ Representative (on behalf of the Sellers in
proportion to their respective Pro-Rata Shares), and the Sellers shall have no
obligation to refund the Deposit to the Buyer under any circumstances.

(d)        In the event that (i) the Buyer does not deliver the BNDES Consent to
the Sellers’ Representative on or prior to 5:00 p.m. eastern time on the date
that is 135 days from the date hereof, and (ii) the condition to Closing set
forth in Section 7.3(a) has not been satisfied, the Sellers’ Representative
shall be entitled to instruct the Escrow Agent to disburse the Deposit and the
Deposit Interest to the Sellers’ Representative (on behalf of the Sellers in
proportion to their respective Pro-Rata Shares) (by wire transfer of immediately
available funds in U.S. dollars to such account specified by the Sellers’
Representative), to be held by the Sellers’ Representative in accordance with
Section 9.3(c)(iii).

(e)        In the event that the Buyer has not delivered the BNDES Consent to
the Sellers’ Representative on or prior to 5:00 p.m. eastern time on the date
that is 135 days from the date hereof, then the Sellers’ Representative (on
behalf of the Sellers in proportion to their respective Pro-Rata Shares) shall
retain the full amount of the Deposit and the Deposit Interest, which such
retention shall be the Sellers’ sole and exclusive remedy under this Agreement;
provided, however, that the limitation contained in this Section 9.3(e) shall
not prevent the Sellers from pursuing (i) any remedy based on willful breach or
fraud by Buyer or its Affiliates, in each case, in connection with the failure
to obtain the BNDES Consent or (ii) Sellers’ right to seek specific performance
pursuant to Section 11.6. The Parties agree that if the Buyer has not delivered
the BNDES Consent to the Sellers’ Representative on or prior to 5:00 p.m.
eastern time on the date that is 135 days from the date hereof, then
notwithstanding anything to the contrary in this Agreement, each Seller and each
Affiliate of a Seller, on the one hand, and the Buyer and each Affiliate of the
Buyer, on the other hand, shall not have any right to, and each Seller and the
Buyer hereby covenant on behalf of itself and its respective Affiliates, not to,
pursue any remedy at law or in equity or otherwise for any and all matters
arising out of this Agreement, the Transactions or the Purchased Interests,
other than the obligations of Section 6.5, Section 6.6, Section 7.3(d),
Section 9.3 and Article XI of this Agreement and the obligations of the
Confidentiality Agreement.

(f)        In the event that either the Buyer or the Sellers’ Representative is
entitled to instruct the Escrow Agent to release the Deposit and the Deposit
Interest to itself (the “Instructing Party”) in accordance with this
Section 9.3, such Instructing Party may deliver a

 

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notice of disbursement (a “Notice”) to the Escrow Agent (with a copy
concurrently delivered to the other Party), instructing the Escrow Agent to
disburse the Deposit and the Deposit Interest to such Instructing Party;
provided, that any such Notice delivered by an Instructing Party to the Escrow
Agent shall be accompanied by a written certification from the Instructing Party
delivering such Notice (with a copy concurrently delivered to the other Party)
attesting that such Instructing Party is entitled to instruct the Escrow Agent
to disburse the Deposit and the Deposit Interest to such Instructing Party in
accordance with this Section 9.3.

(g)        Any distribution of the Deposit and the Deposit Interest to be made
pursuant to this Section 9.3 shall be made within two Business Days of delivery
of such Notice.

(h)        The Parties agree that the Deposit and the Deposit Interest shall be
treated as the property (and income) of the Sellers for all relevant Tax
purposes and the Sellers shall file all relevant Tax returns in a manner
consistent with such treatment; provided that the Sellers shall receive a Tax
distribution (calculated based on an assumed Tax rate as set forth in the Escrow
Agreement) quarterly and prior to the final release of the Deposit and the
Deposit Interest.

(i)        The Parties acknowledge that (i) the agreements contained in this
Section 9.3 are an integral part of the Transactions, and (ii) without the
agreements contained in this Section 9.3, the Sellers and the Company would not
have entered into this Agreement.

(j)        The Parties further agree that, as promptly as practical following
the date hereof, the Buyer and the Sellers’ Representative shall amend the
Escrow Agreement in the form exchanged by the Parties prior to the date hereof
to the extent necessary to reflect the provisions of this Section 9.3.

ARTICLE X

INDEMNIFICATION

Section 10.1.   Indemnification by the Sellers. From and after the Closing, each
of the Sellers, severally (in proportion to their respective Pro-Rata Shares),
but not jointly, shall defend, indemnify and hold harmless each of the Buyer and
its Affiliates and their respective Representatives (collectively, the “Buyer
Indemnitees”) from and against, and pay or reimburse the Buyer Indemnitees for,
any and all Losses resulting from, arising out of or relating to:

(a)        any breach of or inaccuracy in any of the Fundamental Representations
of such Seller or the Company;

(b)        any breach of or inaccuracy in any representation or warranty when
made or deemed made by such Seller in Article III or the Company in Article IV;

(c)        any 280G Amount; or

(d)        any failure of such Seller to perform any covenant or agreement of
such Seller contained in this Agreement.

 

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Section 10.2.   Indemnification by the Buyer. From and after the Closing, the
Buyer shall defend, indemnify and hold harmless the Sellers and its
Representatives (collectively, the “Seller Indemnitees”) from and against any
and all Losses resulting from, arising out of or relating to:

(a)        any breach of or inaccuracy in any of the Fundamental Representations
of the Buyer;

(b)        any breach of or inaccuracy in any representation or warranty when
made or deemed made by the Buyer in Article V or the Guarantor in
Section 11.14(a); or

(c)        any failure of the Buyer or the Guarantor to perform any covenant or
agreement of the Buyer or the Guarantor contained in this Agreement.

Section 10.3.   Certain Limitations.

(a)        Except as set forth in Section 10.3(b) and Section 10.3(f), (i) no
Seller shall be liable for any Loss or Losses under Section 10.1(b) (other than
any Loss or Losses resulting from, arising out of or relating to any breach of
or inaccuracy in any representation or warranty made or deemed made by the
Company in Section 4.16 or Section 4.3(a)(4)(y)) unless and until the amount of
Losses incurred by the Buyer arising from any matter or series of matters
relating to the same underlying fact, circumstance, action or event exceeds
$50,000 (“Covered Losses”), (ii) the aggregate Liability of the Sellers in
respect of indemnification obligations under this Article X shall in no event
exceed an amount equivalent to the Retention Amount, if any (the “Cap”), and
(iii) all claims by any Buyer Indemnitee in respect of the indemnification under
this Article X for an amount in excess of the Cap shall be satisfied solely and
exclusively by recovery under the R&W Insurance Policy.

(b)        Notwithstanding anything to the contrary set forth herein, the Cap
shall not apply to the Buyer Indemnitees’ remedies, claims or indemnities
against each Seller in respect of (i) the indemnities set forth in
Section 10.1(a) and Section 10.1(d) or (ii) knowing and intentional fraud of
such Seller or the Company in connection herewith or the Transactions (which
claims under subsections (i) and (ii) can be asserted by any Buyer Indemnitee
against such Seller directly and will not be limited to the Cap or to recovery
under the R&W Insurance Policy); provided, however, that the indemnification for
subsection (i) shall only be asserted against such Seller for an amount in
excess of the Cap after (A) the coverage under the R&W Insurance Policy has been
exhausted or (B) the insurer providing coverage under the R&W Insurance Policy
has indicated to the Buyer in writing that the claim (which is not a claim that
is wholly excluded on the face of the R&W Insurance Policy) the Buyer submitted
for coverage will not be paid, but only after the Buyer has used commercially
reasonable efforts to pursue coverage for such claim under the R&W Insurance
Policy; provided, further, that the cumulative indemnification obligations of
such Seller under this Agreement (except for claims for knowing and intentional
fraud of the Sellers) shall in no event exceed the Purchase Price proceeds
actually received by such Seller.

(c)        Except as set forth in Section 10.3(d) and Section 10.3(f), (i) the
Buyer shall not be liable for any Loss or Losses under Section 10.2(b) unless
the Loss is a Covered Loss, and

 

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(ii) the aggregate Liability of the Buyer in respect of indemnification
obligations under this Article X shall in no event exceed the Cap.

(d)        Notwithstanding anything to the contrary set forth herein, the Cap
shall not apply to, the Seller Indemnitees’ remedies, claims or indemnities
against the Buyer in respect of (i) the indemnities set forth in Section 10.2(a)
and Section 10.2(c) or (ii) knowing and intentional fraud of the Buyer or the
Guarantor in connection herewith or the Transactions (which claims under
subsections (i) and (ii) can be asserted by any such Seller Indemnitee against
the Buyer directly and will not be limited to the Cap); provided, however, that
the cumulative indemnification obligations of the Buyer under this Agreement
(except for knowing and intentional fraud claims) shall in no event exceed the
Purchase Price.

(e)        For purposes of this Article X, any breach of or inaccuracy in any
representation or warranty shall be determined without regard to any materiality
or Material Adverse Effect and any qualification or requirement that a matter be
or not be reasonably expected to occur.

(f)        Each of the Parties acknowledges and agrees that (except for (i) any
recourse under available under the R&W Insurance Policy, (ii) disputes under
Section 2.4, which disputes will be resolved in accordance with the dispute
mechanism set forth in Section 2.4, (iii) breach of or failure to perform any
covenant, and the rights of the Parties under Section 9.3) the rights to
indemnification provided for in this Article X shall be the sole and exclusive
remedy of the Parties after the Closing for any and all matters arising out of
this Agreement, the Transactions and the Purchased Interests; provided, that
nothing herein shall limit in any way any such Party’s remedies in respect of
knowing and intentional fraud by the other Party in connection herewith or the
Transactions (which claims, for the avoidance of doubt, can be asserted by any
Buyer Indemnitee or Seller Indemnitee, as applicable, directly against the
applicable Seller or Buyer, respectively, and will not be limited to the Cap or
the R&W Insurance Policy, but will be subject to the last proviso in
Section 10.3(b) and Section 10.3(d)).

(g)        For the avoidance of doubt, (i) nothing contained in this this
Article X shall restrict or prohibit the Buyer from making and pursuing any
claim under the R&W Insurance Policy obtained by the Buyer in connection with
this Agreement, (ii) nothing in this Article X shall be deemed to limit any
rights of any Buyer Indemnitee against the insurance carrier under the R&W
Insurance Policy, (iii) the claims period and limitations under the R&W
Insurance Policy may differ from the terms herein but shall have no effect on
the indemnification obligations of the Sellers hereunder and (iv) the R&W
Insurance Policy shall give the insurer thereunder no greater rights of recovery
against any Seller (by subrogation or otherwise) than provided to the Buyer
hereunder.

(h)        If a Buyer Indemnitee is seeking recovery for such Losses under the
R&W Insurance Policy for which any Seller could have Liability, the Buyer shall,
upon receipt of any indication of coverage from the insurance carrier under the
R&W Insurance Policy, promptly deliver a copy thereof to the Sellers’
Representative.

(i)        The rights and remedies of any Party based upon, arising out of or
otherwise in respect of any inaccuracy or breach of any representation,
warranty, covenant or agreement or

 

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failure to fulfill any condition shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement as to which there is no
inaccuracy or breach. The representations and warranties of the Sellers shall
not be affected or deemed waived by reason of any investigation made by or on
behalf of the Buyer (including by any of its Representatives) or by reason of
the fact that the Buyer or any of such Representatives knew or should have known
that any such representation or warranty is or might be inaccurate.

Section 10.4.   Payment Adjustments.

(a)        Each Indemnified Party shall use its commercially reasonable efforts
to pursue and collect on any recovery available under any applicable insurance
policies (including under the R&W Insurance Policy). Any indemnity payment made
by any Seller to the Buyer Indemnitees, on the one hand, or by the Buyer to the
Seller Indemnitees, on the other hand, pursuant to this Article X in respect of
any claim shall be reduced by an amount equal to (i) any insurance proceeds
actually received by the Indemnified Party in respect of such claim (including
proceeds actually received by the Buyer under the R&W Insurance Policy), minus
(ii) any related costs and expenses, including the aggregate cost of pursuing
any related insurance claims and any correspondent increases in insurance
premiums. If the Indemnified Party receives any amounts under applicable
insurance policies or from any other Person alleged to be responsible for any
Losses, subsequent to an indemnification payment by the Indemnifying Party, then
such Indemnified Party shall promptly reimburse the Indemnifying Party for any
payment made or reasonable and out-of-pocket expense incurred by such
Indemnifying Party in connection with providing such indemnification up to the
amount received by the Indemnified Party, net of the amounts referred to in the
immediately preceding clause (ii).

(b)        Any indemnification payment due under this Agreement shall be treated
for all Tax purposes as an adjustment to the Purchase Price payable by the Buyer
hereunder, except as otherwise required by applicable Law.

(c)        In no event shall any Party have any Liability to any Person for
(i) any consequential, special, incidental, indirect or punitive damages,
damages based on a multiple of any financial measure or similar items (including
loss of revenue, income or profits, loss of business reputation, goodwill or
opportunity relating to a breach or alleged breach hereof), except (A) if
reasonably foreseeable or (B) in the case of a Party’s obligation to indemnify
an Indemnified Party for amounts paid to a third party where such amounts are
awarded pursuant to a Third Party Claim (or settlement thereof) that is subject
to indemnification in accordance with, and subject to the limitations set forth
in, this Article X, or (ii) any Loss that was included in determining the
Purchase Price Adjustment in accordance with Section 2.4.

Section 10.5.   Indemnification Procedures.

(a)        In the event that any claim or demand, or other circumstance or state
of facts that could give rise to any claim or demand, for which an Indemnifying
Party may be liable to an Indemnitee hereunder, is asserted or sought to be
collected by a Person who is not a Party or an Affiliate thereof or any Tax
Claim by a Taxing Authority (other than a Tax Claim with respect to

 

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Taxes imposed or assessed on, or asserted against, any Company Entity) (such
Legal Proceeding or Tax Claim, a “Third Party Claim”) against a Person entitled
to indemnification under this Article X (the “Indemnified Party”), written
notice (a “Notice of Claim”) shall be given by the Indemnified Party to the
Party required to provide indemnification (the “Indemnifying Party”) as promptly
as practicable after such Indemnified Party has actual knowledge of such Third
Party Claim or should have known a Third Party Claim existed by knowing the
circumstances or state of facts that could give rise to any such Third Party
Claim. The failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its indemnification obligation under
this Article X, except to the extent that such failure results in a lack of
actual notice to the Indemnifying Party and such Indemnifying Party is
materially prejudiced thereby. The Notice of Claim shall (i) state that the
Indemnified Party has paid or properly accrued Losses or anticipates that it
will incur Liability for Losses for which such Indemnified Party is entitled to
indemnification pursuant to this Agreement, and (ii) describe the Loss in
reasonable detail. The Indemnified Party shall enclose with the Notice of Claim
a copy of all papers served with respect to such Third Party Claim, if any, and
any other documents evidencing such Third Party Claim.

(b)        The Indemnifying Party shall have the right, but not the obligation,
to assume the defense of such Third Party Claim, at the expense of the
Indemnifying Party, by written notice to the Indemnified Party within 20 days
after the Indemnified Party has provided the Indemnifying Party with a Notice of
Claim; provided, that (A) counsel for the Indemnifying Party who shall conduct
the defense of such Third Party Claim shall be reasonably satisfactory to the
Indemnified Party, and (B) the Indemnified Party may participate in such defense
at such Indemnified Party’s expense, but the Indemnified Party shall control the
investigation, defense and settlement thereof, and the Indemnified Party
Indemnified Party will not file any papers or consent to the entry of any
judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnified Party (not to be
unreasonably withheld, conditioned or delayed). Except with the prior written
consent of the Indemnified Party (not to be unreasonably withheld, conditioned
or delayed), no Indemnifying Party, in the defense of any such Third Party
Claim, shall consent to entry of any judgment or enter into any settlement that
provides for injunctive or other non-monetary relief affecting the Indemnified
Party or that does not include, as an unconditional term thereof, the giving by
each claimant or plaintiff to such Indemnified Party of an irrevocable release
from all Liability with respect to such Third Party Claim. Notwithstanding the
foregoing, in the event that the Indemnified Party shall have been advised in
writing by counsel that there is a conflict of interest between the Indemnified
Party and the Indemnifying Party in respect of such Third Party Claim or that
one or more defenses or counterclaims available to the Indemnified Party is
inconsistent with one or more of those that may be available to the Indemnifying
Party, the Indemnified Party shall have the right, but not the obligation, at
all times to take over and assume control over the defense, settlement,
negotiations or Legal Proceeding relating to any such Third Party Claim at the
expense of the Indemnifying Party, upon delivery of notice to such effect to the
Indemnifying Party; provided, however, that (i) the Indemnifying Party shall
have the right to participate in the Third Party Claim at its sole cost and
expense, but the Indemnified Party shall control the investigation, defense and
settlement thereof, and (ii) if the Indemnified Party does so take over and
assume control, the Indemnified Party shall not settle such Third Party Claim
without the prior written consent of the Indemnifying Party, such consent not to
be unreasonably withheld or delayed.

 

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(c)        If the Indemnifying Party does not assume the defense of such Third
Party Claim in accordance with the preceding paragraph, the Indemnified Party
shall be entitled to assume and control such defense and to settle or agree to
pay in full such Third Party Claim without the consent of the Indemnifying Party
without prejudice to the ability of the Indemnified Party to enforce its claim
for indemnification against the Indemnifying Party hereunder, but any settlement
entered into or any judgment that was consented to without the Indemnifying
Party’s prior written consent shall not be determinative of the amount of Losses
relating to such matter.

(d)        In all cases, the Parties shall cooperate in the defense of any Third
Party Claim subject to this Article X, and the records of each shall be
available to the other with respect to such defense. The Party controlling the
defense of such Third Party Claim shall keep the other Party reasonably advised
of the status of such Third Party Claim and the defense thereof and shall
consider in good faith any reasonable recommendations made by the
non-controlling Party with respect thereto.

(e)        In the event that an Indemnified Party sustains any Losses not
involving a Third Party Claim that such Indemnified Party believes gives rise to
a claim for indemnification under this Article X, such Indemnified Party shall,
if it intends to make a claim with respect thereto against an Indemnifying
Party, deliver written notice of such claim to the Indemnifying Party promptly
following its discovery of the matter for which it may seek indemnification
under this Article X. The notice shall (i) state that the Indemnified Party has
paid or properly accrued Losses or anticipates that it will incur Liability for
Losses for which such Indemnified Party is entitled to indemnification pursuant
to this Agreement, and (ii) described the Loss in reasonable detail. If the
Indemnifying Party does not notify the Indemnified Party within 30 days after
its receipt of such notice that the Indemnifying Party disputes its liability to
the Indemnified Party, such claim specified by the Indemnified Party in such
notice shall be conclusively deemed a liability of the Indemnifying Party and
the Indemnifying Party shall pay the amount of such claim to the Indemnified
Party promptly after demand therefor or, in the case of any notice in which the
amount of the claim (or any portion thereof) is estimated, on such later date on
which such amount (or such portion) is finally determined. If the Indemnifying
Party has timely disputed its liability with respect to such claim as provided
above, the Indemnifying Party and the Indemnified Party shall promptly proceed
in good faith to negotiate a resolution of such dispute, and if not resolved
through such negotiations, such dispute shall be resolved by litigation in an
appropriate court of competent jurisdiction in accordance with Section 11.5.

(f)        Notwithstanding any of the foregoing and for the avoidance of doubt,
the defense and control of any Tax Claims with respect to Taxes imposed or
assessed on, or asserted against, any Company Entity shall be controlled by the
relevant Company Entity.

Section 10.6.   Survival.

(a)        All claims for indemnification under Section 10.1 or Section 10.2
with respect to the representations and warranties contained herein must be
asserted on or prior to the date that is 60 days after the termination of the
respective survival periods set forth in this Section 10.6. The representations
and warranties contained in this Agreement shall survive the execution and
delivery of this Agreement, any examination by or on behalf of the Parties and
the completion of the Transactions, but only to the extent specified below:

 

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(i)        except as set forth below, the representations and warranties
contained in Article III, Article IV and Article V shall survive for a period
ending on the date that is 24 months following the Closing Date;

(ii)        the representations and warranties of the Company contained in
Section 4.15 shall survive until 60 days after the expiration of the statute of
limitation applicable to the particular provision of ERISA at issue;

(iii)        the representations and warranties of the Company relating to Taxes
or Tax matters shall survive until 60 days after the expiration of the statute
of limitation applicable to the Tax or Tax matter at issue; and

(iv)        the Fundamental Representations shall survive without limitation.

(b)        Notwithstanding the expiration of any survival period referred in
Section 10.6, if the Indemnified Party has provided notice with respect to a
breach of representation or warranty within the applicable survival period, the
relevant representation or warranty shall survive, solely with respect to such
claim as is asserted in such notice, until the claim has been finally resolved.
For the avoidance of doubt, nothing herein shall be deemed to shorten or
accelerate the expiration of any otherwise applicable claim period under the R&W
Insurance Policy or limit the Buyer’s rights thereunder.

(c)        The covenants, obligations and agreements of each Party contained in
this Agreement and any claim for fraud shall survive the Closing in accordance
with their terms until 60 days following the expiration of any applicable
statute of limitations; provided, however, that any such covenant or agreement
that expires on a date certain shall survive until such date certain.

ARTICLE XI

MISCELLANEOUS

Section 11.1.   Notices. Any notice, request, demand, waiver, consent, approval
or other communication that is required or permitted hereunder shall be in
writing and shall be deemed given: (a) on the date established by the sender as
having been delivered personally, (b) on the date delivered by a private courier
as established by the sender by evidence obtained from the courier, (c) on the
date sent by e-mail, with a copy of such notice delivered by registered mail, or
(d) on the fifth Business Day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid. Such communications, to be
valid, must be addressed as follows:

 

  (a)       if to the Buyer or the Guarantor, to:     Marfrig Global Foods S.A.
                    

R. Queiroz Filho, 1.560 – Torre Sabiá

3º andar - Vila Hamburguesa

    CEP: 05319-000 - São Paulo – Brasil     Attention:    Marcos Antonio Molina
dos Santos        marcos@marfrig.com.br

 

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    with a required copy (which shall not constitute notice) to:    

Linklaters LLP

1345 Avenue of the Americas

    New York, New York 10105     Attention:    Matthew Poulter       
matthew.poulter@linklaters.com        and        Gabriel Silva       

gabriel.silva@linklaters.com

(b)         if to the Sellers, the Sellers’ Representative or the Company (prior
to Closing), to the Sellers’ Representative:

   

Leucadia National Corporation

520 Madison Avenue, 12th Floor

    New York, New York 10022     Attention:    Michael J. Sharp       
msharp@jefferies.com     with a required copy (which shall not constitute
notice) to:    

Morgan, Lewis & Bockius LLP

101 Park Avenue

    New York, New York 10178     Attention:    R. Alec Dawson       
alec.dawson@morganlewis.com        and        Sheryl L. Orr       
sheryl.orr@morganlewis.com

or to such other address or to the attention of such Person or Persons as the
recipient Party has specified by prior written notice to the sending Party (or
in the case of counsel, to such other readily ascertainable business address as
such counsel may hereafter maintain). If more than one method for sending notice
as set forth above is used, the earliest notice date established as set forth
above shall control.

Section 11.2.   Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law (a) such
provision will be fully severable, (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance herefrom and (d) in lieu of such
illegal, invalid or unenforceable

 

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provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms of such illegal,
invalid or unenforceable provision as may be possible.

Section 11.3.   Entire Agreement; No Third-Party Beneficiaries.

(a)        This Agreement, the Financing Commitment, the Schedules, Exhibits,
Appendices and the other documents, instruments and agreements specifically
referred to herein or therein or delivered pursuant hereto or thereto set forth
the entire understanding of the Parties with respect to the Transactions. All
Schedules, Exhibits and Appendices referred to herein are intended to be and
hereby are specifically made a part of this Agreement. Any and all previous
agreements and understandings between or among the Parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement, except
for the Confidentiality Agreement.

(b)        Except as provided in Article X with respect to indemnification of
Indemnified Parties hereunder, this Agreement will not confer any rights or
remedies upon any Person other than the Parties hereto and their respective
successors and permitted assigns; provided, however, that (i) the provisions of
Section 6.8, Section 9.2, Section 11.3, Section 11.5, Section 11.7,
Section 11.10 and Section 11.13 will be enforceable by each of the Financing
Sources, and any of their respective former, current or future, direct or
indirect equity holders, controlling persons, stockholders, directors, officers,
employees, agents, Affiliates, members, managers, general or limited partners,
attorneys, advisors or other Representatives, or any of the respective
successors or assigns of any of the foregoing, and (ii) each of the Financing
Sources will be an intended third-party beneficiary of this Section 11.3 and
such Sections and will be entitled to enforce such provisions as if direct
parties to this Agreement.

Section 11.4.   Governing Law. This Agreement and the Exhibits and Schedules
hereto shall be governed by and interpreted and enforced in accordance with the
Laws of the State of New York, without giving effect to any choice of Law or
conflict of Laws rules or provisions (whether of the State of New York or any
other jurisdiction) that would cause the application of the Laws of any
jurisdiction other than the State of New York.

Section 11.5.   Consent to Jurisdiction; Waiver of Jury Trial. Each Party
irrevocably submits to the exclusive jurisdiction of any state or federal court
located within the County of New York in the State of New York for the purposes
of any Legal Proceeding arising out of this Agreement, the Financing Commitment
or the Transactions, and agrees to commence any such Legal Proceeding only in
such courts. Each Party further agrees that service of any process, summons,
notice or document by United States registered mail to such Party’s respective
address set forth herein shall be effective service of process for any such
Legal Proceeding. Each Party irrevocably and unconditionally waives any
objection to the laying of venue of any Legal Proceeding arising out of this
Agreement, the Financing Commitment or the Transactions in such courts, and
hereby irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such Legal Proceeding brought in any such court has
been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE FINANCING COMMITMENT OR THE TRANSACTIONS OR THE

 

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ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND
ENFORCEMENT HEREOF OR THEREOF.

Section 11.6.   Right to Specific Performance.

(a)        The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is accordingly agreed
that the Parties shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
of this Agreement, this being in addition to any other remedy to which such
Party is entitled at law, in equity, in contract, in tort or otherwise.

(b)        The Parties hereby agree not to raise any objections to the
availability of the equitable remedy of specific performance to prevent or
restrain breaches of this Agreement by the Buyer or Sellers, as applicable, and
to specifically enforce the terms and provisions of this Agreement to prevent
breaches or threatened breaches of, or to enforce compliance with, the
respective covenants and obligations of the Parties under this Agreement, all in
accordance with the terms of this Section 11.6.

(c)        No Party shall be required to provide any bond or other security in
connection with seeking an injunction or injunctions to prevent breaches of this
Agreement or to specifically enforce the terms and provisions of this Agreement.

Section 11.7.   Assignment. Neither this Agreement nor any of the rights or
obligations hereunder shall be assigned by any of the Parties without the prior
written consent of the other Parties; provided, however, that Buyer may assign
this Agreement to any parties providing financing pursuant to the Financing
Commitment for collateral security purposes. Subject to the preceding sentence
and the rights of persons who are expressly provided to be third-party
beneficiaries pursuant to Section 11.3, this Agreement will be binding upon,
inure to the benefit of, and be enforceable by, the Parties and their respective
successors and permitted assigns. Any attempted assignment in violation of the
terms of this Section 11.7 shall be null and void, ab initio.

Section 11.8.   Headings. All headings contained in this Agreement are for
convenience of reference only, do not form a part of this Agreement and shall
not affect in any way the meaning or interpretation of this Agreement.

Section 11.9.   Construction. For the purposes of this Agreement, except as
otherwise expressly provided herein or unless the context otherwise requires:
(a) the meaning assigned to each term defined herein shall be equally applicable
to both the singular and the plural forms of such term and vice versa, and words
denoting either gender shall include both genders as the context requires;
(b) where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning; (c) the terms “hereof”, “herein”,
“hereunder”, “hereby” and “herewith” and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole and not to
any particular provision of this Agreement; (d) when a reference is made in this
Agreement to an Article, Section, paragraph, Exhibit or Schedule, such reference
is to an Article, Section, paragraph, Exhibit or Schedule to this Agreement
unless

 

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otherwise specified; (e) the word “include”, “includes” and “including” when
used in this Agreement shall be deemed to be followed by the words “without
limitation”, unless otherwise specified; (f) a reference to any Party to this
Agreement or any other agreement or document shall include such Party’s
predecessors, successors and permitted assigns; (g) all accounting terms used
and not defined herein have the respective meanings given to them under GAAP;
(h) any event, the scheduled occurrence of which would fall on a day that is not
a Business Day, shall be deferred until the next succeeding Business Day;
(j) any statement in this Agreement to the effect that any information, document
or other material has been “made available” by the Sellers shall mean such
information, document or material was included in and available at the “Project
Ballet” online datasite hosted by Intralinks, Inc. at least one Business Day
prior to the date hereof; and (k) the word “or” shall be disjunctive and not
exclusive. The Parties agree that the terms of this Agreement and the meaning
assigned to each term defined herein represent a commercial agreement among the
Parties solely in connection with the Transactions, and shall not affect the
Parties’ accounting practices. The Parties have participated jointly in the
negotiation and drafting of this Agreement, and any rule of construction or
interpretation otherwise requiring this Agreement to be construed or interpreted
against any Party by virtue of the authorship of this Agreement shall not apply
to the construction and interpretation hereof.

Section 11.10.   Amendments and Waivers. This Agreement may not be amended,
supplemented or modified except by an instrument in writing signed on behalf of
the Buyer and the Sellers’ Representative. Any term or condition of this
Agreement may be waived at any time by the Party that is entitled to the benefit
thereof, but no such waiver shall be effective, unless set forth in a written
instrument duly executed by the Party against whom enforcement of such waiver is
sought. No waiver by any Party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion.
Notwithstanding the foregoing, no amendment, modification or supplement shall be
made to this Agreement that would adversely affect the rights of the Financing
Sources (including any provision for which any Financing Source is a third-party
beneficiary) without the consent of the Financing Sources.

Section 11.11.   Schedules and Exhibits. Except as otherwise provided in this
Agreement, all Exhibits and Schedules referred to herein are intended to be and
hereby are made a part of this Agreement. The Disclosure Schedule has been
arranged, for purposes of convenience only, in sections corresponding to the
Sections of this Agreement. Unless otherwise noted in the Disclosure Schedule,
the disclosure of any item in any section or subsection of Disclosure Schedule
will be deemed disclosure with respect to each other section and subsection of
the Disclosure Schedule to which the relevance of such item is reasonably
apparent. Certain information set forth in the Disclosure Schedule is or may be
included solely for informational purposes, is not an admission of Liability
with respect to the matters covered by the information, and may not be required
to be disclosed pursuant to this Agreement. The specification of any dollar
amount in the representations and warranties contained in this Agreement or the
inclusion of any specific item in the Disclosure Schedule is not intended to
imply that such amounts (or higher or lower amounts) or items (a) are or are not
material to the business, assets, liabilities, financial condition, results of
operation or prospects of the Company, (b) amount to a Material Adverse Effect
or (c) occurred outside of the Ordinary Course of Business. No Party shall use
the fact of the setting of such amounts or the fact of the inclusion of any such
item in the Disclosure Schedule in any dispute or controversy between the
Parties as to whether any obligation, item or

 

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matter not described herein or included in a Disclosure Schedule is or is not
material for purposes of this Agreement.

Section 11.12.   Counterparts. This Agreement, and the other documents,
agreements and instruments to be delivered in connection herewith, may be
executed in counterparts, and any Party may execute any such counterpart, each
of which when executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become effective when each Party shall have
received a counterpart hereof signed by the other Parties. The Parties agree
that the delivery of this Agreement, and the other documents, agreements and
instruments to be delivered in connection herewith, may be effected by means of
an exchange of facsimile or electronically transmitted signatures (such as by
electronic mail in “.pdf” form).

Section 11.13.   Financing Sources. Subject, in each case, to the rights of the
Buyer under the terms of the Financing Commitment, (a) each of the Parties and
their respective Affiliates, directors, officers, employees, agents, partners,
managers, members or stockholders shall not have any rights or claims against
any of the Financing Sources in any way relating to this Agreement or any of the
Transactions, including any dispute arising out of or relating in any way to the
performance of the Financing Commitment or any other financing commitments of
such Financing Sources with respect to the Transactions, whether at law or
equity, in contract, in tort or otherwise, and (b) no Financing Sources shall
have any Liability (whether in contract, tort or otherwise) to any of the
Parties or any of their respective Affiliates, directors, officers, employees,
agents, partners, managers, members or stockholders for any Liabilities of any
Party hereto under this Agreement or for any claim based on, in respect of, or
by reason of, the Transactions, including any dispute arising out of or relating
in any way to the performance of any financing commitments.

Section 11.14.   Guarantee.

(a)        The Guarantor hereby absolutely, unconditionally and irrevocably
guarantees (the “Guarantee”) to the Sellers the due and punctual performance of
all of the Buyer’s obligations under this Agreement, including the payment of
the Closing Amount pursuant to Article II and satisfaction of all other payments
required by this Agreement (the “Guaranteed Obligations”). The Guarantee of the
Guaranteed Obligations is one of payment, not collection, and a separate Legal
Proceeding to enforce the Guarantee may be brought and prosecuted against the
Guarantor, irrespective of whether any Legal Proceeding is brought against the
Buyer or any other Person or whether the Buyer and/or any other Person is joined
in any such Legal Proceeding. Should the Buyer default in the discharge or
performance of all or any portion of the Guaranteed Obligations, the obligations
of the Guarantor hereunder shall become immediately due and, if applicable,
payable. The Guarantor represents and warrants to the Sellers and the Companies
as follows: (i) the Guarantor is a corporation (sociedade por ações) duly
incorporated and validly existing under the Laws of the Federative Republic of
Brazil, (ii) the Guarantor has the requisite corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder,
including to perform its obligation hereunder to pay, when and if due, the
Guaranteed Obligations, (iii) the execution, delivery and performance by the
Guarantor of this Agreement, and the performance by the Guarantor of its
obligation to pay, when and if due, the Guaranteed Obligations, have been duly
authorized by all necessary corporate action on the part of the Guarantor, and
no other action is necessary on the part of the Buyer to authorize this
Agreement

 

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or the payment, when due, of the Guaranteed Obligations, and (iv) this Agreement
has been duly executed and delivered by the Guarantor, and, assuming the due
authorization, execution and delivery by the Sellers and the Buyer, this
Agreement constitutes a legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor, in accordance with its terms, except as
limited by (A) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other similar Laws relating to creditors’ rights generally and
(B) general principles of equity, whether such enforceability is considered in a
proceeding in equity or at Law.

(b)        The liability of the Guarantor under the Guarantee shall, to the
fullest extent permitted under applicable Law, be absolute and unconditional,
irrespective of: (i) the validity, legality or enforceability of this Agreement
against the Buyer; (ii) any release or discharge of any obligation of the Buyer
under this Agreement resulting from any change in the corporate existence,
structure or ownership of the Buyer, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Buyer or any of its
assets; (iii) any amendment or modification of this Agreement, or any change in
the manner, place or terms of payment or performance of the Guaranteed
Obligations or any other obligation of the Buyer hereunder, or any change or
extension of the time of payment or performance of, alteration of, the
Guaranteed Obligations or any other obligation of the Buyer hereunder, any
Liability incurred directly or indirectly in respect thereof, or any amendment
or waiver of, or any consent to, any departure from the terms of this Agreement
or the documents entered into in connection herewith; (iv) the existence of any
claim, setoff or other right that the Buyer or the Guarantor may have at any
time against the Sellers, whether in connection with the Guaranteed Obligations
or otherwise; or (v) any other act or omission that may or might in any manner
or to any extent vary the risk of the Guarantor or otherwise operate as a
discharge of the Guarantor as a matter of Law or equity, other than any defenses
under this Agreement available to the Buyer. The Guarantor hereby waives any and
all notice of the creation, extension or accrual of the Guaranteed Obligations
under the Guarantee and notice of or proof of reliance by the Sellers upon the
Guarantee or acceptance of the Guarantee. The Guaranteed Obligations under the
Guarantee shall conclusively be deemed to have been created, contracted or
incurred in reliance upon the Guarantee, and all dealings between the Guarantor
and the Sellers shall likewise be conclusively presumed to have been had or
consummated in reliance upon the Guarantee. When the Sellers are pursuing their
rights and remedies hereunder against the Guarantor, the Sellers shall be under
no obligation to pursue any rights and remedies they may have against the Buyer
or any other Person for the Guaranteed Obligations or any right of offset with
respect thereto, and any failure by the Sellers to pursue such other rights or
remedies or to collect any payments from the Buyer or any other Person or to
realize upon or to exercise any such right of offset, and any release by the
Sellers of the Buyer or any other Person or any right of offset, shall not
relieve the Guarantor of any liability hereunder, and shall not impair or affect
the rights and remedies of the Sellers, whether express, implied or available as
a matter of Law. The Sellers shall not be obligated to file any claim relating
to the Guaranteed Obligations in the event that the Buyer or Guarantor becomes
subject to a bankruptcy, reorganization or similar proceeding, and the failure
of the Sellers to so file shall not affect the Guarantor’s obligations
hereunder. In the event that any payment to the Sellers in respect of the
Guaranteed Obligations is rescinded or must otherwise be returned for any reason
whatsoever, the Guarantor shall remain liable hereunder with respect to the
Guaranteed Obligations as if such payment had not been made. The Guarantor
irrevocably waives acceptance, presentment, demand, protest and any notice in
respect of the Guarantee not provided for herein. So long as the Guarantee
remains in full force and effect, in the event the Guarantor or any of its
successors or assigns (A) consolidates with or merges into

 

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any other Person and shall not be the continuing or surviving corporation or
entity in such consolidation or merger or (B) transfers all or substantially all
of its properties and assets to any Person, then, and in either such case,
proper provision shall be made so that the successors and assigns of the
Guarantor shall assume the obligations set forth in this Section 11.14. The
Guarantor may not exercise any rights of subrogation or contribution, whether
arising by contract or operation of law (including, without limitation, any such
right arising under bankruptcy or insolvency Laws) or otherwise, by reason of
any payment by it in respect of the Guarantee unless and until the Guaranteed
Obligations have been satisfied in full. The Guarantor has, and through the
earlier of the Closing Date and the termination of this Agreement pursuant to
Section 9.1 will have, capital or available capital commitments which together
are sufficient to enable it to satisfy its obligations under this Section 11.14,
and the Guarantor shall not take any action to make such capital not available
and knows of no fact or circumstance that would cause such capital to not be
available.

(c)        The Guarantee shall remain in full force and effect and shall be
binding on the Guarantor until the earlier of the Closing Date and the
termination of this Agreement pursuant to Section 9.1, and after such
occurrence, the Guarantee shall automatically terminate, shall have no further
force and effect, and shall no longer be binding on the Guarantor; provided,
however, that the Guarantee shall remain in effect with respect to (i) any claim
based upon any act, omission, fact or circumstance occurring or in existence on
or prior to the earlier of the Closing Date and the termination of this
Agreement pursuant to Section 9.1 if the Sellers’ Representative give written
notice of such claim within 30 days after such earlier date and (ii) any
post-Closing obligations of the Buyer, including any indemnification obligations
pursuant to Section 10.2. Upon the termination of this Agreement pursuant to
Section 9.1, the Guarantee shall survive in full force and effect and shall be
binding on the Guarantor until the later of (i) 90 days from the date of such
termination and (ii) the final, non-appealable and conclusive resolution of any
and all claims brought under this Agreement.

Section 11.15.    Sellers’ Representative.

(a)        Each Seller hereby irrevocably appoints the Sellers’ Representative
as of the date hereof, with power of designation and assignment as its true and
lawful attorney-in-fact and agent with full power of substitution, to act solely
and exclusively on behalf of, and in the name of, such Seller, with the full
power, without the consent of such Seller, to exercise as the Sellers’
Representative in its sole discretion deems appropriate, the powers that such
Seller could exercise hereunder with respect to all of its rights and
obligations and to take all actions with respect thereto necessary or
appropriate in the judgment of the Sellers’ Representative in connection with
this Agreement and the Escrow Agreement. The appointment of the Sellers’
Representative is coupled with an interest and shall be irrevocable by any
Seller in any manner or for any reason. The Buyer shall be entitled to rely
exclusively upon any notices and other acts of the Sellers’ Representative
relating to the Sellers’ rights and obligations hereunder as being legally
binding acts of each Seller individually and collectively, and the Buyer shall
deliver any notice required or permitted hereunder to be delivered to the
Sellers to the Sellers’ Representative. Each Seller agrees not to institute any
Proceeding against the Buyer alleging that the Sellers’ Representative did not
have the authority to act as the Sellers’ Representative on behalf of such
Seller in connection with any action, omission or execution. No Seller may take
any action with respect to its rights and obligations hereunder without the
express written consent of the Sellers’ Representative.

 

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(b)        The Sellers’ Representative will serve without compensation, but will
be reimbursed on a current basis from the Sellers (in proportion to their
respective Pro-Rata Shares) for any expenses and fees incurred or anticipated to
be incurred without gross negligence on the part of the Sellers’ Representative
and arising out of or in connection with the acceptance or administration of the
Sellers’ Representative’s duties hereunder, including the reasonable fees and
expenses of any legal counsel, accountants and other professionals and experts
retained by the Sellers’ Representative.

(c)        The Sellers’ Representative shall not be liable to any Seller for any
act done or omitted under this Agreement or the Escrow Agreement as the Sellers’
Representative while acting in good faith, and any act done or omitted pursuant
to the advice of counsel shall be conclusive evidence of such good faith. Each
Seller, severally (in proportion to their respective Pro-Rata Shares) and not
jointly, shall indemnify the Sellers’ Representative and hold the Sellers’
Representative harmless from and against any Losses (each, a “Representative
Loss”) arising out of or in connection with any actions taken or omitted to be
taken by the Sellers’ Representative hereunder or under the Escrow Agreement,
including any amounts paid by the Sellers’ Representative on behalf of the
Sellers in accordance with this Agreement, in each case as such Representative
Loss is incurred or suffered; provided, that in the event it is finally
adjudicated that a Representative Loss or any portion thereof was primarily
caused by the gross negligence or bad faith of the Sellers’ Representative, the
Sellers’ Representative will reimburse the Sellers the amount of such
indemnified Representative Loss attributable to such gross negligence or bad
faith.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the day and year first above written.

 

BUYER: NBM US HOLDINGS, INC. By:   /s/ Jose Eduardo de Oliveira Miron   Name:  
Jose Eduardo de Oliveira Miron   Title:   President GUARANTOR: MARFRIG GLOBAL
FOODS S.A. By:   /s/ Jose Eduardo de Oliveira Miron   Name:   Jose Eduardo de
Oliveira Miron   Title:   CFO and Investment Relations Officer By:   /s/ Martin
Secco Arias   Name:   Martin Secco Arias   Title:   CEO

Signature Page to Purchase and Sale Agreement

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SELLERS: LEUCADIA NATIONAL CORPORATION By:   /s/ Michael J.
Sharp                        Name: Michael J. Sharp   Title: EVP, General
Counsel NBPCO HOLDINGS, LLC By:   /s/ Rich Jochum                              
Name: Rich Jochum  

Title: Manager VP, General Counsel

          Beef Products, Inc.

SELLERS’ REPRESENTATIVE: LEUCADIA NATIONAL CORPORATION By:   /s/ Michael J.
Sharp                         Name: Michael J. Sharp   Title: EVP, General
Counsel COMPANY: NATIONAL BEEF PACKING COMPANY, LLC By:   /s/ Timothy M.
Klein                        Name: Timothy M. Klein   Title: Chief Executive
Officer and President

Signature Page to Purchase and Sale Agreement

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Appendix A

Definitions

When used in the Agreement, the following terms have the meanings assigned to
them in this Section:

“280G Amount” means the total amount of the loss of any compensation-related Tax
deduction by the Company or any Company Entity as a result of a compensation
expense constituting an “Excess Parachute Payment” under Section 280G of the
Code.

“A&R Operating Agreement” means the Third Amended and Restated Limited Liability
Company Agreement of the Company to be entered into by the Parties and the other
parties thereto as of the Closing Date substantially in the form attached hereto
as Exhibit B.

“Accounts Receivable” means the amounts owing to the Company Entities as of the
Closing Date for goods sold or services rendered prior to Closing, whether or
not the Company Entities have submitted an invoice for such goods or services,
or for goods to be sold or services to be provided after the Closing for which
the Company Entities have submitted an invoice), in each case, (a) net of all
trade and customary allowances, and (b) together with the full benefit of any
security interest of any Company Entity therein and any claim, remedy or other
right related to the foregoing.

“Affiliate” of any Person means any other Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with such first Person. For purposes of this definition,
“control” (including the terms “controlled by” and “under common control with”)
of a Person means the power to, directly or indirectly, direct or cause the
direction of the management and policies of such Person whether through
ownership of voting securities or other ownership interests, by Contract or
otherwise, including, with respect to a corporation, partnership or limited
liability company, the direct or indirect ownership of more than 50% of the
voting securities in such corporation or of the voting interest in a partnership
or limited liability company. For the avoidance of doubt, the Company Entities
shall be considered Affiliates of (a) the Sellers prior to the Closing and
(b) the Buyer following the Closing.

“Agreement” has the meaning set forth in the preamble to this Agreement.

“Allocation” has the meaning set forth in Section 2.5.

“Antitrust Authorities” shall mean the Federal Trade Commission, the Antitrust
Division of the United States Department of Justice, the attorneys general of
the several states of the United States and any other domestic or foreign
Governmental Entity having jurisdiction with respect to the Transactions
pursuant to applicable Antitrust Laws.

“Antitrust Laws” means the Sherman Act, as amended, the Clayton Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended and all other
applicable merger control, competition, antitrust or foreign investment Laws
issued by a domestic or foreign Governmental Entity that are designed or
intended to prohibit, restrict or regulate actions having

 

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the purpose or effect of monopolization or restraint of trade or lessening of
competition through merger or acquisition.

“Assets” has the meaning set forth in Section 4.9(a).

“Audited Financial Statements” has the meaning set forth in Section 4.5.

“Balance Sheet Date” has the meaning set forth in Section 4.5.

“BNDES Consent” has the meaning set forth in Section 7.3(d).

“Business Day” means any day, other than Saturday, Sunday or any other day on
which banks located in the State of New York or São Paulo, Brazil are authorized
or required to close.

“Buyer” has the meaning set forth in the preamble to this Agreement.

“Buyer Indemnitees” has the meaning set forth in Section 10.1.

“Cash” means, without duplication, cash in hand or credited to any account with
a financial institution and securities with a maturity of less than one month
that are readily convertible into cash (excluding, for the avoidance of doubt,
any restricted cash such as cash held as collateral) to the extent reflected on
the balance sheet of the Company Entities as of the determination date.

“Cap” has the meaning set forth in Section 10.3(a).

“Closing” has the meaning set forth in Section 2.2.

“Closing Amount” has the meaning set forth in Section 2.1(a).

“Closing Date” has the meaning set forth in Section 2.2.

“Closing Net Indebtedness” has the meaning set forth in Section 2.4(a).

“Closing Statement” has the meaning set forth in Section 2.4(a).

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the preamble to this Agreement.

“Company Benefit Plans” means any agreement, plan, program, fund, policy,
contract (either written or unwritten) providing compensation, benefits,
pension, retirement, profit sharing, stock bonus, stock option, stock purchase,
stock ownership, stock appreciation right, phantom or stock equivalent, bonus,
incentive, deferred compensation, hospitalization, medical, dental, vision,
retirement, vacation, insurance, sick pay, disability, death benefit, severance,
worker’s compensation, supplementary unemployment benefits, perquisites, or
similar employee benefits, or any salary reduction agreement, change-of-control
agreement, retention agreement, employment agreement or consulting agreement,
for the benefit of any current or former employee,

 

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officer, director or independent contractor (who is an individual) of the
Company Entities and the beneficiaries and dependents thereof, and (i) which is
maintained or contributed to, as the case may be, or with respect to which any
withdrawal liability (within the meaning of section 4201 of ERISA) has been
incurred, by the Company Entities or any of their ERISA Affiliwates, or
(ii) pursuant to which the Company Entities or any of their ERISA Affiliates has
any Liability, including (A) any “employee benefit plan” (as defined in section
3(3) of ERISA), and (B) any Multiemployer Plan.

“Company Entities” means the Company and the Company Subsidiaries.

“Company Labor Agreements” has the meaning set forth in Section 4.14(a).

“Company Registered Intellectual Property Rights” has the meaning set forth in
Section 4.10(a).

“Company Intellectual Property” means all Intellectual Property that is either
(a) owned by, purported to be owned by or licensed to the Company Entities
(solely or jointly with others) or (b) used in the business of any of the
Company Entities.

“Company Subsidiaries” means each Subsidiary of the Company.

“Company Transaction Expenses” means (a) the out-of-pocket costs, fees and
expenses incurred or payable by the Sellers or the Company Entities in
connection with the Transactions, including (i) any fees and expenses payable to
any investment bankers, third party consultants and legal counsel, including,
without limitation, Morgan, Lewis & Bockius LLP, Pinheiro Neto Advogados, Morgan
Stanley, Jefferies Group LLC or their respective Affiliates and (ii) any Credit
Agreement Amendment Fees, and (b) all employee retention and other
transaction-related bonuses that are payable to any director, officer or
employee of the Company Entities solely as a result of the consummation of the
Transactions (including the employer portion of any Taxes relating thereto).

“Confidentiality Agreement” means that certain Mutual Non Disclosure Agreement,
dated July 25, 2017, by and between Leucadia and Guarantor.

“Consent” means any consent, approval, authorization, novation, waiver, permit,
grant, variance, franchise, concession, agreement, license, exemption or order
of, registration, certificate, declaration or filing with, or notice, any
Person.

“Contract” means any written contract, lease, license, indenture, undertaking or
other agreement that is legally binding.

“Controlled Group Liability” means any and all Liabilities under (i) Title IV of
ERISA, (ii) section 302 of ERISA and (iii) sections 412 and 4971 of the Code,
other than such Liabilities that arise solely out of, or relate solely to, the
Company Benefit Plans.

“Copyrights” means all copyrights, copyrights registrations and applications
therefor and all other rights corresponding thereto throughout the world.

 

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“Covered Losses” has the meaning set forth in Section 10.3(a).

“Credit Agreement Amendment Fees” means any fees and expenses payable to the
lenders, the administrative agent and their respective counsel in connection
with the negotiation of the First Amendment to Third Amended and Restated Credit
Agreement, dated as of March 30, 2018, by and among the Company and the lenders
and agents party thereto, which amended the Third Amended and Restated Credit
Agreement, dated as of June 9, 2017, by and among the Company and the lenders
and agents party thereto.

“Current Operating Agreement” means that certain Second Amended and Restated
Limited Liability Company Agreement of the Company, dated as of December 30,
2011, by and among the Company, Leucadia, USPB, NBPCo, New Kleinco and, solely
for the purposes of Section 14.1.2 thereof, National Beef Pennsylvania, LLC.

“Debt Financing” has the meaning set forth in Section 5.5(a).

“Deposit” has the meaning set forth in the recitals to this Agreement.

“Deposit Interest” means (a) interest earned or accrued on the Deposit pursuant
to the Escrow Agreement for the time the Deposit remains deposited with the
Escrow Agent, and (b) interest at the rate per annum equal to 1.0% from the date
the Deposit is released to the Sellers’ Representative pursuant to
Section 9.3(c) to and including the earlier of the Closing Date (if Closing
occurs) and the date on which the Deposit is refunded to the Guarantor pursuant
to pursuant to Section 9.3(c).

“Disclosure Schedule” has the meaning set forth in the lead in to Article III.

“Dispute Notice” has the meaning set forth in Section 2.4(c).

“Employee” means any employee of the Company as of the applicable date of
determination.

“Environmental Law” means any Law regulating or relating to the protection of
human health and safety, natural resources or the environment, including Laws
relating to contamination and the use, generation, management, handling,
transport, treatment, disposal, storage, Release or threatened Release of
Hazardous Substances.

“Environmental Permit” means any Permit required pursuant to applicable
Environmental Law.

“Equity Interest” has the meaning set forth in the definition of Equity
Securities in Appendix A hereto.

“Equity Securities” means (a) capital stock, partnership or membership interests
or units (whether general or limited), and any other interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distribution of assets of, the issuing entity or a right to control such
entity, including, with respect to the Company, the Units (an “Equity
Interest”), (b) subscriptions, calls, warrants, options, purchase rights or
commitments of any kind

 

A-4

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or character relating to, or entitling any Person to acquire, any Equity
Interest, (c) stock appreciation, phantom stock, equity participation or similar
rights and (d) securities convertible into or exercisable or exchangeable for
any Equity Interests.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the applicable regulations promulgated thereunder.

“ERISA Affiliate” means, with respect to any entity, any other entity that is a
member of a group described in section 414(b) or (c) of the Code or section
4001(b)(1) of ERISA that includes the first entity.

“Escrow Agreement” has the meaning set forth in the recitals to this Agreement.

“Escrow Agent” has the meaning set forth in the recitals to this Agreement.

“Estimated Closing Net Indebtedness” has the meaning set forth in
Section 2.4(a).

“Estimated Statement” has the meaning set forth in Section 2.4(a).

“Evaluation Material” has the meaning set forth in Section 3.7.

“FDA” means the U.S. Food and Drug Administration.

“Filing” means a registration, declaration or filing with a Governmental Entity.

“Final Closing Net Indebtedness” has the meaning set forth in Section 2.4(e).

“Financial Statements” has the meaning set forth in Section 4.5.

“Financing Commitment” has the meaning set forth in Section 5.5(a).

“Financing Sources” means the entities that have committed to provide or
otherwise entered into agreements in connection with the Financing Commitment,
together with their Affiliates, and including the parties to the Financing
Commitment and any related joinder agreements, credit agreements or indentures
(including the definitive agreements relating thereto), any underwriters,
arrangers or lenders in connection with the financing contemplated by the
Financing Commitment and their respective successors and assigns, together with
their respective Affiliates, and their respective Affiliates’ Representatives
and agents and their respective successors and assigns.

“Food Authority” means any Governmental Entity responsible for the regulation of
food products or the enactment, adoption, promulgation or enforcement of Food
Safety Laws, including the USDA and the FDA.

“Food Safety Laws” means all applicable Laws relating to food safety, food
sanitation or the use, manufacture, packaging, storage, labeling, distribution,
marketing, advertising or sale of any food product adopted by any Food
Authority, including the Federal Food,

 

A-5

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Drug, and Cosmetic Act, as amended, the applicable statutes, regulations and
requirements of the USDA and the FDA, all applicable statutes enforced by the
FTC and the applicable FTC regulations and requirements and any applicable
requirements established by any state, local or foreign Governmental Entity
responsible for regulating food products.

“FTC” means the U.S. Federal Trade Commission.

“Fundamental Representations” means the representations and warranties contained
in Section 3.1 (Organization and Existence), Section 3.2 (Authority and
Enforceability), Section 3.5 (Capitalization), Section 3.6 (Brokers),
Section 4.1 (Organization and Existence), Section 4.2 (Authority and
Enforceability), Section 4.3 (Capitalization of the Company Entities),
Section 4.23 (Brokers), Section 5.1 (Organization and Existence), Section 5.2
(Authority and Enforceability) and Section 5.7 (Brokers).

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Entity” means any court, tribunal, arbitrator, authority, agency,
commission, legislative body or official of the United States or any state, or
similar governing entity, in the United States or in a foreign jurisdiction.

“Guarantee” has the meaning set forth in Section 11.14(a).

“Guaranteed Obligations” has the meaning set forth in Section 11.14(a).

“Guarantor” has the meaning set forth in the preamble to this Agreement.

“Hazardous Substances” means any substance, chemical, waste, material, pollutant
or contaminant that: (i) is or contains asbestos, urea formaldehyde insulation,
polychlorinated biphenyls, petroleum or petroleum products, or constituents
thereof; (ii) is defined, listed or identified as a “hazardous waste,”
“hazardous substance,” “toxic substance” or words of similar import under any
Environmental Law; or (iii) is regulated as hazardous under any Environmental
Law.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended and the rules and regulations promulgated thereunder.

“Income Tax” means Tax imposed on net income and franchise Tax imposed in lieu
of Taxes imposed on net income.

“Indebtedness” means any of the following: (a) any indebtedness for borrowed
money, whether current or funded, secured or unsecured, or with respect to
deposits or advances of any kind; (b) any obligations evidenced by bonds,
debentures, notes or other similar instruments, other than (i) any such
instruments owned by a Company Entity and (ii) performance bonds; (c) any
obligations, contingent or otherwise, under acceptance, letters of credit or
similar facilities, in each case, solely to the extent drawn upon; (d) any
prepayment premiums and penalties, and any other fees, expenses, indemnities and
other amounts payable as a result of the prepayment or discharge of any of the
foregoing, in each case solely to the extent payable as a result of the
consummation of the Transactions; (e) obligations of such Person under
conditional

 

A-6

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sale or other title retention agreements relating to any property purchased by
such Person; (f) obligations of such Person issued or assumed as the deferred
purchase price of assets, property or services; (g) lease obligations of such
Person capitalized on the books and records of such Person, which have been, or
must be, recorded as capitalized lease obligations in accordance with GAAP as in
effect on the date hereof; (h) obligations of others secured by a Lien on
property or assets owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed; (i) obligations of such Person
under interest rate or currency hedging transactions; and (j) guarantees and
support and keepwell arrangements having the economic effect of a guarantee of
such Person of any Indebtedness of any other Person (other than, in the case of
a Company Entities, any other Company Entity); in each case, including the
outstanding principal amount of such Indebtedness, together with all interest
accrued thereon and all fees, costs and charges associated therewith, but
excluding any such fees, costs and charges that have been paid prior to Closing;
provided, that nothing herein shall be deemed to limit the Sellers’ obligation
to pay or reimburse the Company Transaction Expenses as set forth in
Section 6.6.

“Indemnified Party” has the meaning set forth in Section 10.5(a).

“Indemnifying Party” has the meaning set forth in Section 10.5(a).

“Independent Accountant” has the meaning set forth in Section 2.4(d).

“Instructing Party” has the meaning set forth in Section 9.3(f).

“Intellectual Property” means any or all of the following: (i) Software;
(ii) inventions (whether or not patentable), improvements, and technology;
(iii) proprietary and confidential information, including pricing and cost
information, business and marketing plans, customer and supplier lists and data,
trade secrets, know-how and techniques; (iv) databases, data compilations and
collections and technical data; (v) tools, methods, processes, specifications,
molds, dies, casts, devices, prototypes, schematics, net lists, mask works, test
methodologies and hardware and Software development tools; (vi) World Wide Web
(“WWW”) addresses, uniform resource locators and domain names; and (vii) all
instantiations of the foregoing in any form and embodied in any media.

“Intellectual Property Rights” means any or all of the following and all rights
in, arising out of, or associated therewith: (i) Patents; (ii) trade secrets and
other rights in privacy, data, know-how and confidential or proprietary
information; (iii) Copyrights; (iv) all industrial designs and any registrations
and applications therefor throughout the world; (v) Internet Properties;
(vi) Trademarks; and (vii) any similar, corresponding or equivalent rights to
any of the foregoing anywhere in the world.

“Internet Properties” means all WWW addresses, uniform resource locators and
domain names and applications and registrations therefor.

“Interest Rate” means (i) the rate of interest published from time to time by
The Wall Street Journal, Eastern Edition, as the “prime rate” at large U.S.
money center banks during the period from the date that payment is due to the
date of payment, plus (ii) 2%.

 

A-7

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“Interim Period” means the period beginning on the date hereof and ending on the
earlier of (a) the Closing and (b) the termination of this Agreement.

“IP Licenses” means all the Contracts to which the any of the Company Entities
is a party with respect to any Intellectual Property or Intellectual Property
Rights licensed to or by, or created for or by, the Company Entities.

“IRS” means the Internal Revenue Service.

“Key Employee” means any (a) senior-level employee of the Company Entities
(senior executive vice president and above) or (b) employee of the Company
Entities with an annual base cash compensation in excess of $500,000 or total
annual cash compensation in excess of $1,000,000.

“Knowledge” means the actual knowledge, after reasonable inquiry, of (a) in the
case of the Company, Timothy Klein, Bret Wilson and Simon McGee, (b) in the case
of the Leucadia, Kieran Mara and Nicholas Daraviras, (c) in the case of NBPCo,
Rich Jochum, and (d) in the case of the Buyer or the Guarantor, Martin Secco and
Eduardo Miron.

“Law” means, with respect to any Person, any statute, law (including common
law), code, treaty, ordinance, rule or regulation of any Governmental Entity
applicable to such Person as of the date hereof.

“Leased Real Property” has the meaning set forth in Section 4.9(d).

“Leases” has the meaning set forth in Section 4.9(d).

“Legal Proceeding” means any action, cause of action, suit, hearing, claim,
lawsuit, litigation, investigation, arbitration or proceeding (in each case,
whether civil, criminal, regulatory, administrative or otherwise, at law or in
equity).

“Leucadia” has the meaning set forth in the preamble to this Agreement.

“Liabilities” means any and all debts, losses, liabilities, Legal Proceeding,
fines, costs, royalties, deficiencies or obligations of any nature, whether
known or unknown, asserted or unasserted, accrued or unaccrued, matured or
unmatured, absolute, off-balance sheet, contingent or otherwise and whether due
or to become due, and any out-of-pocket costs and expenses (including
attorneys’, accountants’ or other fees and expenses).

“Lien” means with respect to any property or asset, any lien, mortgage, pledge,
charge, security interest, option, right of first refusal or first offer,
easement, servitude or other encumbrance in respect of such property or asset.

“Losses” means, with respect to any Indemnified Party, all Liabilities, losses,
damages, claims, costs and expenses, interest, awards, Taxes, demands,
assessments, judgments, fines, penalties and diminution in value (including
reasonable attorneys’ and consultants’ fees and expenses) suffered or incurred
by such Person.

 

A-8

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“Material Adverse Effect” means any change or event that, individually or in the
aggregate, has or would reasonably be expected to have a material adverse effect
on the business, assets, properties or condition of the Company Entities, taken
as a whole; provided, however, that any changes or events resulting from the
following items shall not be considered when determining whether a Material
Adverse Effect has occurred: (a) changes in economic, political, regulatory,
financial or capital market conditions generally or in the industries in which
the Company Entities operate, (b) any acts of war, sabotage, terrorist
activities or changes imposed by a Governmental Entity associated with
additional security, (c) effects of weather or meteorological events, (d) any
change of Law, accounting standards, regulatory policy or industry standards
after the date hereof, (e) the announcement, execution, delivery or performance
of this Agreement or the consummation of the Transactions or the fact that the
prospective owner of the Company is the Buyer, and (f) any actions taken by, or
at the request of, the Buyer; provided, in the case of clauses (a), (b), (c) and
(d), that such conditions or changes do not have a disproportionate impact on
the Company Entities relative to other participants in the industry in which the
Company Entities conduct business.

“Material Contract” has the meaning set forth in Section 4.8(b).

“Missing Units” has the meaning set forth in Section 2.1(b).

“Multiemployer Plan” means a “multiemployer plan” as defined by Section 3(37) of
ERISA.

“NBPCo” has the meaning set forth in the preamble to this Agreement.

“Net Indebtedness” means, as of a given date, the aggregate Indebtedness of the
Company Entities, minus the aggregate Cash of the Company Entities.

“New Kleinco” means TMK Holdings, LLC, a Missouri limited liability company.

“Notice” has the meaning set forth in Section 9.3(f).

“Notice of Claim” has the meaning set forth in Section 10.5(a).

“Order” means any award, injunction, judgment, order, writ, decree or ruling
entered, issued, made, or rendered by any Governmental Entity that possesses
competent jurisdiction.

“Organizational Documents” means, with respect to any Person that is not an
individual, the articles or certificate of incorporation or organization,
by-laws, limited partnership agreement, partnership agreement, limited liability
company agreement, shareholders agreement, operating agreement or such other
organizational documents of such Person.

“Ordinary Course” or “Ordinary Course of Business” means the conduct of the
business of the Company Entities in accordance with the Company Entities’ normal
day-to-day customs, practices and procedures, consistent with past practice
(including with respect to quantity and frequency).

“Outside Date” has the meaning set forth in Section 9.1(a).

 

A-9

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“Owned Real Property” has the meaning set forth in Section 4.9(c).

“Party” or “Parties” has the meaning set forth in the preamble to this
Agreement.

“Patents” means all United States and foreign patents (if any) and utility
models and applications therefor, and all reissues, divisions, re-examinations,
renewals, extensions, provisionals, continuations and continuations-in-part
thereof, and equivalent or similar rights anywhere in the world in inventions
and discoveries, including invention disclosures.

“Permit” means a consent, approval, license, permit, certificate, authorization
or extension of applicable waiting period from any Governmental Entity.

“Permitted Lien” means (a) any Lien for Taxes that are not yet due or delinquent
or that are being contested in good faith, and, in the case of contested Taxes,
with respect to which reserves have been established in the Financial Statements
in accordance with GAAP, (b) any landlords’, mechanics’, workmen’s, repairmen’s,
warehousemen’s, carriers’ or other like Lien arising by operation of Law in the
Ordinary Course of Business, (c) imperfections or irregularities of title and
other Liens that do not and would not, individually or in the aggregate,
materially detract from the value of, or materially interfere with, the present
use and enjoyment of the asset or property subject thereto or affected thereby,
(d) zoning, planning, building and other similar limitations, restrictions and
rights of any Governmental Entity to regulate property, (e) any Lien to be
released in full on or prior to Closing, and (f) any Lien arising pursuant to,
or as a result of the Transactions.

“Person” means any natural person, corporation, general partnership, limited
partnership, limited liability company, joint venture, trust, proprietorship,
other business organization or Governmental Entity.

“Products” has the meaning set forth in Section 4.21(a).

“Pro-Rata Share” means, with respect to each Seller, the percentage expressed
opposite such Seller’s name on Schedule A under the heading of “Pro-Rata Share,”
which Pro-Rata Share shall be adjusted as necessary to account for any Shortfall
Units sold by Leucadia to the Buyer pursuant to Section 2.1(b).

“Purchase Price” means $969,000,000.

“Purchase Price Adjustment” has the meaning set forth in Section 2.4(f).

“Purchased Interests” has the meaning set forth in the recitals to this
Agreement.

“Qualified Plans” has the meaning set forth in Section 4.15(b).

“R&W Insurance Policy” has the meaning set forth in Section 6.9.

“Real Property” means the Owned Real Property and the Leased Real Property.

 

A-10

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“Registered Intellectual Property Rights” means all United States and foreign:
(i) Patents, including applications therefor; (ii) registered Trademarks,
applications to register Trademarks, including intent-to-use applications, other
registrations or applications related to Trademarks; (iii) registrations of, and
applications for the use of, Internet Properties; (iv) Copyrights registrations
and applications to register Copyrights and (v) any other Intellectual Property
that is the subject of an application, certificate, filing, registration or
other document issued by, filed with, or recorded by, any Governmental Entity at
any time.

“Release” means any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, of any Hazardous Substance through, into or upon, any
land, soil, surface water, groundwater or air.

“Remedial Action” means all actions required under Environmental Laws to
(i) clean up, remove, treat or in any other way remediate any Hazardous
Substances; (ii) prevent the Release of Hazardous Substances so that they do not
migrate or endanger or threaten to endanger public health or welfare or the
environment or (iii) perform investigations related to any such Hazardous
Substances.

“Representative Loss” has the meaning set forth in Section 11.15.

“Representatives” means the officers, directors, managers, employees, counsel,
accountants, agents, financial advisers and consultants of a Person.

“Retention Amount” has the meaning set forth in Section 6.9.

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Sellers” has the meaning set forth in the preamble to this Agreement.

“Seller Indemnitees” has the meaning set forth in Section 10.2.

“Sellers’ Representative” has the meaning set forth in the preamble to this
Agreement.

“Shortfall Units” has the meaning set forth in Section 2.1(b).

“Straddle Period” means any Taxable Period beginning on or prior to and ending
after the Closing Date.

“Software” means all works of authorship, including computer programs,
algorithms, routines, source code and executable code, whether embodied in
firmware, software or otherwise, documentation, designs, files, records and
data.

“Specified Fundamental Representations” means the representations and warranties
contained in Section 3.5, Section 4.3(a)(1), Section 4.3(a)(2),
Section 4.3(a)(4)(x) and Section 4.3(b).

 

A-11

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“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, joint venture or other legal entity of which
such Person (either alone or through or together with any other Subsidiary),
owns, directly or indirectly, more than 50% of the Equity Interests the holders
of which are generally entitled to vote for the election of the board of
directors or other governing body of a non-corporate Person.

“Target Closing Net Indebtedness” means $400,000,000.

“Tax” or “Taxes” means (i) any and all United States federal, state or local, or
foreign or other taxes, fees and charges of any nature whatsoever (including
income (net or gross), business and occupation, profits, gains, alternative or
add-on minimum, franchise, license, margin capital, capital stock, intangible,
services, premium, transfer, withholding, ad valorem, personal property
(tangible and intangible), employment, payroll, wage, severance, windfall
profits, import, custom, stamp, sales and use, value added, social security,
disability, occupation, real property, escheat, severance, excise, estimated and
other taxes) imposed by a Taxing Authority, including any interest, penalty or
addition thereto, and (ii) any and all liabilities for any amount described in
the immediately preceding clause (i) as a result of being a transferee or
successor, by contract or otherwise, or as a result of being or having been a
member of an affiliated, consolidated, combined, unitary, aggregate, or similar
group for Tax purposes, or pursuant to any Contract, arrangement or
understanding.

“Tax Audit” means any audit, examination, inquiries, claims, suits,
investigations, or other administrative or court proceeding with respect to
Taxes or Tax matters.

“Tax Claim” means any assessments, adjustments or claims in respect of any
Taxes.

“Tax Purchase Price” has the meaning set forth in Section 2.5.

“Tax Returns” means any return, report, election, notice, form, declaration or
similar statement filed or required to be filed with respect to any Taxes
(including any attached schedules), including any information return, claim for
refund, amended return and declaration of estimated Tax.

“Taxable Period” means any taxable year or any other period with respect to
which any Tax may be imposed under any applicable Law.

“Taxing Authority” means, with respect to any Tax, the Governmental Entity that
imposes, regulate, enforce or administer such Tax, and the agency (if any)
charged with the collection of such Tax for such Governmental Entity.

“Third Party Claim” has the meaning set forth in Section 10.5(a).

“Trademarks” means all trade names, logos, common law trademarks and service
marks, trademark and service mark registrations and applications therefor.

“Transactions” means the transactions contemplated by this Agreement and each
document, instrument or agreement executed and delivered in connection herewith.

 

A-12

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“Transfer Taxes” means any and all transfer, sales, use, real estate, goods and
services, value added, documentary, filing, stamp duty, registration, securities
transactions, gross receipts, excise, conveyance and notarial Taxes and other
similar Taxes, duties, fees or charges (together with any interest, penalty,
addition to Tax, and additional amount imposed in respect thereof); provided,
however, that for the avoidance of doubt, Transfer Taxes do not include any
Income Taxes.

“Treasury Regulations” means the temporary and final regulations promulgated
under the Code by the United States Department of Treasury and the IRS.

“Unaudited Financial Statement” has the meaning set forth in Section 4.5.

“Unit” has the meaning given to such term in the Current Operating Agreement.

“USDA” means the U.S. Department of Agriculture.

“USPB” means U.S. Premium Beef, LLC, a Delaware limited liability company.

“WWW” has the meaning set forth in the definition of Intellectual Property in
Appendix A hereto.

 

A-13

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Schedule A

Currently Owned Units, Purchased Interests and Pro-Rata Shares

 

                                                                               
                                        Member   

 

Currently  

Owned Units  

 

  

Purchased  

Interests  

  

Pro-Rata  

Share  

 

Leucadia National Corporation

 

   8,434.09    5,104.00    93.6788%

 

NBPCo Holdings, LLC

 

   569.11    344.40    6.3212%

 

TOTAL

 

   9,003.20    5,448.40    100.0000%

--------------------------------------------------------------------------------

Exhibit A

Assignment of Purchased Interests

(see attached)

--------------------------------------------------------------------------------

ASSIGNMENT OF PURCHASED INTERESTS

This ASSIGNMENT OF PURCHASED INTERESTS (the “Assignment”) is made and entered
into as of [●], 2018 by [●], a [●] (“Assignor”).

WHEREAS, pursuant to that certain Purchase and Sale Agreement, dated as of April
[●], 2018 (the “Purchase Agreement”), by and among NBM US Holdings, Inc., a
Delaware corporation (the “Buyer”), Marfrig Global Foods S.A., a Brazilian
corporation (sociedade por ações) (the “Guarantor”), Leucadia National
Corporation, a New York corporation (“Leucadia”), [NBPCo Holdings, LLC, a South
Dakota limited liability company (“NBPCo” and together with Leucadia, the
“Sellers”)], Leucadia, in its capacity as the Sellers’ Representative hereunder
(in such capacity, the “Sellers’ Representative”), and National Beef Packing
Company, LLC, a Delaware limited liability company (the “Company”), Assignor
agreed to sell to the Buyer, and the Buyer has agreed to purchase from Assignor,
[●] Units of the Company (the “Purchased Interests”).

NOW, THEREFORE, for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees as follows:

1.        Definitions. Unless the terms or context of this Assignment otherwise
require or provide, each capitalized term used in this Assignment shall have the
meaning given to such term in the Purchase Agreement.

2.        Assignment of Purchased Interests. Effective as of the date hereof,
Assignor hereby conveys, transfers, assigns and delivers to the Buyer, its
successors and assigns, free and clear of all Liens (other than Liens
(A) arising pursuant to, or as a result of, the Transactions (B) arising under
the Organizational Documents of the Company and (C) arising pursuant to
applicable securities Laws), all of Assignor’s right, title and interest in and
to the Purchased Interests.

3.        Governing Law. This Assignment shall be governed by and interpreted
and enforced in accordance with the Laws of the State of New York, without
giving effect to any choice of Law or conflict of Laws rules or provisions
(whether of the State of New York or any other jurisdiction) that would cause
the application of the Laws of any jurisdiction other than the State of
New York.

[Signature Page Follows]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has duly executed this Assignment as of and
on the date first above written.

 

 

ASSIGNOR:

[●]

By:                                                                  

Name:

Title:

Signature Page to Assignment of Purchased Interests

--------------------------------------------------------------------------------

Exhibit B

A&R Operating Agreement

(see attached)

--------------------------------------------------------------------------------

EXHIBIT B

 

 

NATIONAL BEEF PACKING COMPANY, LLC

THIRD AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

DATED AS OF [●], 2018

 

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

       Page  

1.

 

DEFINITIONS

     2  

2.

 

FORMATION AND PURPOSE

     11    

2.1

    

Conversion; Formation

     11    

2.2

    

Name

     11    

2.3

    

Registered Office/Agent

     11    

2.4

    

Term

     12    

2.5

    

Purpose

     12    

2.6

    

Powers

     12    

2.7

    

Certificates

     13    

2.8

    

Principal Office

     13    

2.9

    

No State-Law Partnership

     13  

3.

 

MEMBERSHIP, CAPITAL CONTRIBUTIONS AND UNITS

     13    

3.1

    

Members

     13    

3.2

    

Member Interests and Units

     13    

3.3

    

Additional Members and Units

     14    

3.4

    

Capital Contributions

     14    

3.5

    

Termination of Governance Rights

     14    

3.6

    

Additional Issuances of Units

     14  

4.

 

CAPITAL ACCOUNTS

     15    

4.1

    

Allocations

     15    

4.2

    

Capital Accounts

     15    

4.3

    

Revaluations of Assets and Capital Account Adjustments

     16    

4.4

    

Additional Capital Account Adjustments

     16    

4.5

    

Additional Capital Account Provisions

     17  

5.

 

DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS

     17    

5.1

    

Board of Managers Determination; Annual Distribution

     17    

5.2

    

Distributions

     17    

5.3

    

No Violation

     18    

5.4

    

Withholdings

     18    

5.5

    

Property Distributions and Installment Sales

     19    

5.6

    

Net Profit or Net Loss

     20  

 

i

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(continued)

 

 

5.7

    

Regulatory Allocations

     21    

5.8

    

Tax Allocations

     22    

5.9

    

Imputed Tax Underpayment

     22  

6.

  STATUS, RIGHTS AND POWERS OF MEMBERS AND CERTAIN MEMBER AGREEMENTS      23    

6.1

    

Limited Liability

     23    

6.2

     Return of Distributions of Capital      23    

6.3

     No Management or Control      23    

6.4

     Specific Limitations      23    

6.5

     Member Voting      24    

6.6

     Required Consents; Modification of Unit Terms      24    

6.7

     Restrictions on Member Competition      24    

6.8

     Agreement for NBPCo to Negotiate Certain Requirements Contracts in Good
Faith      26    

6.9

     Agreement Regarding NBPCo Waiver of Right of Set-off      27    

6.10

     Contracts with Managers or their Affiliates      27    

6.11

     Member Compensation; Expenses; Loans      27  

7.

  DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF THE
BOARD OF MANAGERS      27    

7.1

     Board of Managers      27    

7.2

     Managers      28    

7.3

     Number and Designation Rights      28    

7.4

     Voting and Act of the Board of Managers; Actions Requiring Leucadia
Consent; Action without a Meeting      29    

7.5

     Tenure      30    

7.6

     Resignation      30    

7.7

     Removal      30    

7.8

     Vacancies      30    

7.9

     Meetings      30    

7.10

     Notice      30    

7.11

     Waiver      30    

7.12

     Quorum; Attendance by Proxy      31    

7.13

     Compensation      31  

 

ii

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TABLE OF CONTENTS

(continued)

 

 

7.14

     Authority of Board of Managers      31    

7.15

     Reliance by Third Parties      32  

8.

  DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF
OFFICERS AND AGENTS      32    

8.1

     Officers, Agents      32    

8.2

     Election      33    

8.3

     Tenure      33    

8.4

     Chairman of the Board of Managers, Chief Executive Officer, President and
Vice President      33    

8.5

     Chief Financial Officer      33    

8.6

     Secretary and Assistant Secretaries      33    

8.7

     Vacancies      34    

8.8

     Resignation and Removal      34    

8.9

     Compensation      34    

8.10

     Certain Actions Requiring Board of Managers Consent      34  

9.

  BOOKS, RECORDS, ACCOUNTING AND REPORTS      36    

9.1

     Books and Records      36    

9.2

     Delivery to Member, Inspection; etc      36    

9.3

     Accounting; Fiscal Year      37    

9.4

     Reports      37    

9.5

     Filings      38    

9.6

     Non-Disclosure      38    

9.7

     Restrictions on Receipt      39  

10.

 

TAX MATTERS

     39    

10.1

     Tax Matters Member      39    

10.2

     Partnership Representative      40    

10.3

     Tax Returns      43    

10.4

     Tax Elections      43    

10.5

     Tax Information      43  

11.

 

TRANSFER OF INTERESTS

     44    

11.1

     Transfer      44    

11.2

     Permitted Transferees      44  

 

iii

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TABLE OF CONTENTS

(continued)

 

 

11.3

     Transfer Requirements      44    

11.4

     Consent      45    

11.5

     Withdrawal of Member      45    

11.6

     Noncomplying Transfers Void      45    

11.7

     Amendment of Exhibit A      45    

11.8

     Limited Interests      46    

11.9

     Permitted Financing Pledge      46    

11.10

     Member Bankruptcy Events      46  

12.

 

RIGHT OF FIRST OFFER; TAG-ALONG RIGHTS; LIQUIDITY OPTION

     47    

12.1

     Right of First Offer      47    

12.2

     Rights of First Refusal      47    

12.3

     Tag-Along Rights      49    

12.4

     Miscellaneous      50    

12.5

     Liquidity Options      52  

13.

 

DISSOLUTION OF COMPANY

     57    

13.1

     Termination of Membership      57    

13.2

     Events of Dissolution      57    

13.3

     Liquidation      57    

13.4

     No Action for Dissolution      57    

13.5

     No Further Claim      57  

14.

 

INDEMNIFICATION

     57    

14.1

     General      57    

14.2

     Exculpation      58    

14.3

     Persons Entitled to Indemnity      58    

14.4

     Procedure Agreements      58    

14.5

     Duties of Board of Managers      58    

14.6

     Interested Transactions      59    

14.7

     Fiduciary and Other Duties      59  

15.

 

REPRESENTATIONS AND COVENANTS BY THE MEMBERS

     60    

15.1

     Investment Intent      60    

15.2

     Securities Regulation      60    

15.3

     Knowledge and Experience      60  

 

iv

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TABLE OF CONTENTS

(continued)

 

 

15.4

     Economic Risk      60    

15.5

     Binding Agreement      60    

15.6

     Tax Position      61    

15.7

     Information      61    

15.8

     Licenses and Permits      61  

16.

 

COMPANY REPRESENTATIONS

     61    

16.1

     Duly Formed      61    

16.2

     Valid Issue      61  

17.

 

AMENDMENTS TO AGREEMENT

     61    

17.1

     Amendments      61    

17.2

     Corresponding Amendment of Certificate      62    

17.3

     Binding Effect      62  

18.

 

GENERAL

     62    

18.1

     Successors; Delaware Law; Etc      62    

18.2

     Notices, Etc      62    

18.3

     Execution of Documents      62    

18.4

     Consent to Jurisdiction      63    

18.5

     Waiver of Jury Trial      64    

18.6

     Specific Enforcement; Remedies; Waiver      64    

18.7

     Severability      64    

18.8

     Table of Contents, Headings      65    

18.9

     No Third Party Rights      65  

 

v

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TABLE OF CONTENTS

(continued)

 

EXHIBIT A             Members and Units

EXHIBIT B             Matters Requiring Leucadia/NBM Approval

 

 

vi

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NATIONAL BEEF PACKING COMPANY, LLC

THIRD AMENDED AND RESTATED LIMITED LIABILITY COMPANY

AGREEMENT

This Third Amended and Restated Limited Liability Company Agreement (this
“Agreement”) of National Beef Packing Company, LLC, a Delaware limited liability
company (the “Company”), is entered into as of [●] , 2018 (the “Effective
Date”), by and among the Company, Leucadia National Corporation, a New York
corporation (“Leucadia”), NBM US Holdings, Inc., a Delaware corporation (“NBM”),
U.S. Premium Beef, LLC, a Delaware limited liability company (“USPB”), NBPCo
Holdings, LLC, a South Dakota limited liability company (“NBPCo”), and TMK
Holdings, LLC, a Missouri limited liability company (“New Kleinco”). Leucadia,
USPB, NBPCo and New Kleinco are referred to herein as the “Minority Members”.

RECITALS

WHEREAS, Farmland National Beef Packing Company, L.P., a Delaware limited
partnership (the “Partnership”), was organized under and in accordance with the
provisions of the Delaware Revised Uniform Limited Partnership Act (the
“Partnership Act”) by the filing of a Certificate of Limited Partnership with
the Secretary of State of the State of Delaware on March 30, 1993, which was
amended from time to time to reflect changes in the names and addresses of the
general partners, and to reflect the change of name from National Beef Packing
Company, L.P. to Farmland National Beef Packing Company, L.P., and the
Partnership was most recently governed by a Third Amended and Restated Agreement
of Limited Partnership, dated as of December 1, 1997, as amended by amendments
dated February 3, 1998, and May 3, 2000;

WHEREAS, the Partnership was converted (the “Conversion”) to the Company as the
result of a statutory conversion of the Partnership under Section 18 214 of the
Act (as defined herein) and Section 17 219 of the Partnership Act as of
August 6, 2003, and in connection with the Conversion, the Company previously
entered into Liability Company Agreement of the Company, dated as of August 6,
2003 (the “Original Agreement”);

WHEREAS, the Original Agreement was amended and restated by that certain Amended
and Restated Limited Liability Company Agreement of the Company, dated as of
December 30, 2011 (the “First Amended Agreement”);

WHEREAS, the First Amended Agreement was amended and restated by that certain
Second Amended and Restated Limited Liability Company Agreement of the Company,
dated as of December 30, 2011 (the “Second Amended Agreement”);

WHEREAS, pursuant to the Second Amended Agreement, (a) it was previously
contemplated that the Company would transfer to National Beef Pennsylvania, LLC
(“Pennsylvania LLC”) all of the Company’s tangible and intangible assets located
in the Commonwealth of Pennsylvania in exchange for 100% of the membership
interests of Pennsylvania LLC, and (b) Pennsylvania LLC was a party to the
Second Amended Agreement for purposes of certain transfer provisions contained
therein related to such contemplated transfer;

--------------------------------------------------------------------------------

WHEREAS, the contemplated transfer to Pennsylvania LLC was never consummated and
Pennsylvania LLC was subsequently dissolved pursuant to a certificate of
cancellation filed with the Secretary of State of the State of Delaware on
October 22, 2013;

WHEREAS, as contemplated by that certain Purchase and Sale Agreement, dated as
of [●], 2018 (the “Purchase Agreement”), by and among Leucadia, NBPCo Holdings,
LLC, the Company, NBM, and the NBM Ultimate Parent (as defined below) the
Minority Members have, immediately prior to the execution hereof, transferred
[●] Units of the Company to NBM;

WHEREAS, in connection with the transactions contemplated by the Purchase
Agreement, the Company and the Minority Members desire to amend and restate the
Second Amended Agreement as of the Effective Date to provide for, among other
things, the admission of NBM as a member of the Company, the management of the
business and affairs of the Company, the allocation of profits and losses among
the Members and the respective rights and obligations of the Members to each
other and to the Company; and

WHEREAS, as of the Effective Date, this Agreement shall amend, restate and
supersede in all respects, the Second Amended Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and conditions herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which hereby are acknowledged by each party
hereto, the Members agree as follows:

 

1.

DEFINITIONS

For purposes of this Agreement: (a) references to “Articles,” “Exhibits” and
“Sections” are to Articles, Exhibits and Sections of this Agreement unless
explicitly indicated otherwise, (b) references to statutes include all rules and
regulations thereunder, and all amendments and successors thereto from time to
time; and (c) the word “including” shall be construed as “including without
limitation.”

“Accredited Investor” has the meaning defined in Regulation D under Section 4(2)
of the Securities Act.

“Act” means the Delaware Limited Liability Company Act (6 Del. C. § 18 101, et
seq.).

“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in such Member’s Capital Account as of the end of the
relevant Fiscal Year, after giving effect to the following adjustments:

(a)    credit to such Capital Account any amounts that such Member is deemed to
be obligated to restore pursuant to the penultimate sentence of each of
Regulations Sections 1.704-2(i)(5) and 1.704-2(g)(1); and

(b)    debit to such Capital Account the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

 

2

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The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted and applied by the Board of Managers consistently therewith.

“Adjustment Year” means: (a) in the case of an adjustment pursuant to the
decision of a court, the Company’s taxable year in which the decision becomes
final, (b) in the case of an administrative adjustment request, the Company’s
taxable year in which the administrative adjustment is made or (c) in any other
case, the Company’s taxable year in which the notice of final partnership
adjustment is mailed.

“Affiliate” means with respect to any specified Person, any Person that directly
or through one or more intermediaries Controls or is Controlled by or is under
common Control with the specified Person.

“Agreement” is defined in the preamble hereto.

“Aggregate Units” means, as to each Member on the Effective Date of this
Agreement, the number of Units held by such Member on the Effective Date of this
Agreement, together with any additional Units subsequently acquired by such
Member.

“Annual Trigger” is defined in Section 12.5.1(b)(i).

“Asset Value” of any property of the Company means its adjusted basis for
federal income tax purposes unless:

(a)    the property was accepted by the Company as a contribution to capital at
a value different from its adjusted basis, in which event the initial Asset
Value for such property shall mean the gross fair market value of the property
agreed to by the Company and the contributing Member; or

(b)    as a consequence of the issuance of additional Units or the redemption of
all or part of the Interest of a Member, the property of the Company is revalued
in accordance with Section 4.3.

As of any date, references to the “then prevailing Asset Value” of any property
shall mean the Asset Value last determined for such property less the
depreciation, amortization and cost recovery deductions taken into account in
computing Net Profit or Net Loss in fiscal periods subsequent to such prior
determination date.

“Assignee” is defined in Section 11.9.

“Base Tax Rate” is defined in Section 5.2.1.

“Board of Managers” means the board of managers of the Company elected and
determined in accordance with Article 7.

 

3

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“Business Day” means any day other than: (a) a Saturday, Sunday or federal
holiday or (b) a day on which commercial banks in New York, New York or São
Paulo, State of São Paulo, Brazil are authorized or required to be closed.

“Call Date” is defined in Section 12.5.2(b).

“Call Election Period” is defined in Section 12.5.2(b).

“Call Member(s)” is defined in Section 12.5.2(a).

“Call Notice” is defined in Section 12.5.2(a).

“Call Units” is defined in Section 12.5.2(a).

“Capital Account” is defined in Section 4.2.

“Capital Contribution” means with respect to any Member, the sum of (a) the
amount of money plus (b) the fair market value of any other property (net of
liabilities assumed or to which the property is subject) contributed to the
Company with respect to the Interest held by such Member pursuant to this
Agreement.

“Cattle Agreement Trigger” is defined in Section 12.5.1(b)(ii).

“Cattle Purchase and Sale Agreement” means the Cattle Purchase and Sale
Agreement dated as of December 30, 2011 by and among the Company and USPB.

“Certificate of Conversion” means the certificate of conversion of the
Partnership to a limited liability company, and any amendments thereto and
restatements thereof filed on behalf of the Company with the Delaware Secretary
of State pursuant to Section 18 214 of the Act.

“Certificate of Formation” means the certificate of formation of the Company,
and any amendments thereto and restatements thereof, filed on behalf of the
Company with the Delaware Secretary of State pursuant to Sections 18 214 and 18
201 of the Act.

“COC Trigger” is defined in Section 12.5.1(b)(i).

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Company” is defined in the preamble hereto.

“Company Minimum Gain” has the meaning ascribed to the term “partnership minimum
gain” set forth in Regulations Section 1.704-2(b)(2) and 1.704-2(d),
substituting the term “Company” for the term “partnership” as the context
requires.

“Competing Business” means, other than as set forth in Section 6.7(b)(vii), any
business or Person that is engaged, directly or indirectly, anywhere in the
world in one or more of the following businesses: cattle slaughter, beef
processing, beef packaging, including for the case ready and portioned beef
market, retail or wholesale marketing of beef, or hide tanning.

 

4

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“Competing Facility” means, other than as set forth in Section 6.7(b)(vii), any
cattle slaughtering facility, any beef processing or beef packaging facility,
any retail or wholesale beef marketing operation or any hide tanning facility
owned by a Competing Business anywhere in the world.

“Confidential Information” is defined in Section 9.6.1

“Control” (including the terms “Controlling”, “Controlled by” and “under common
Control with”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, or otherwise.

“Conversion” is defined in the recitals hereto.

“Credit Documents” means (a) the First Amendment to Third Amended and Restated
Credit Agreement, dated as of March 30, 2018, by and among the Company and the
lenders and agents party thereto, amending the Third Amended and Restated Credit
Agreement, dated as of June 9, 2017, by and among the Company and the lenders
and agents party thereto, and all related documents and any refinancing thereof,
and (b) any other loan document or arrangement and any refinancing thereof.

“Distribution” means cash or property (net of liabilities assumed or to which
the property is subject) distributed to a Member in respect of the Member’s
Interest.

“Effective Date” is defined in the preamble hereto.

“Enforcement Notice” is defined in Section 12.5.1(b).

“Excess Cash”, for any given year, means the amount equal to (a) the net
operating profit after tax and Tax Distributions for such year, plus (b) all
amortization, depreciation and other non-cash charges incurred during such year,
less (c) all capital expenditures incurred during such year, less (d) all
interest and required principal payments made during such year pursuant to the
Credit Documents, plus or minus (e) without duplication, all changes in net
working capital during such year, each as determined in accordance with GAAP.

“Fair Value” is defined in Section 12.5.3(c).

“First Amended Agreement” is defined in the recitals hereto.

“Fiscal Year” means the fiscal year of the Company, which shall be the Company’s
taxable year as determined under Regulations Section 1.441-1 or Section 1.441-2
and the Regulations under Section 706 of the Code, which is the taxable year
ending on the last Saturday of December, or such other Fiscal Year as determined
by the Board of Managers.

“GAAP” means generally accepted accounting principles in effect in the United
States of America from time to time.

 

5

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“Governance Rights” means the rights of a Member or with respect to an Interest,
or benefits accorded to such Member or with respect to such Interest, pursuant
to Section 3.6 (Additional Issuances of Units), Section 6.5 (Member Voting),
Section 6.6 (Required Consents; Modification of Unit Terms), Section 7.3 (Number
and Designation Rights), Section 7.4 (Voting and Act of the Board of Managers;
Actions Requiring Leucadia Consent; Action without a Meeting), Article 9 (Books,
Records, Accounting and Reports), Section 12.3 (Tag-Along Rights), and
Section 12.5 (Liquidity Option); provided, however, that the obligations of such
Member or with respect to such Interest in such designated sections or otherwise
in this Agreement shall not be included in the definition of “Governance
Rights.”

“Guarantees” means the guarantees by the NBM Ultimate Parent and NBM with
respect to the obligations of NBM in Section 12.5.

“Imputed Tax Underpayment” is defined in Section 5.9.

“Indemnified Persons” is defined in Section 14.1.

“Insufficient Rated Party” means any Person that is rated below “BBB-” by S&P or
“Baa3” by Moody’s, as such ratings are composed as of the Effective Date, or any
equivalent successor rating.

“Initiating Seller” is defined in Section 12.3.1, for the purposes of
Section 12.3.

“Interest” means, with respect to any Member as of any time, such Member’s
limited liability company interest in the Company, together with such Member’s
rights and obligations with respect thereto set forth in this Agreement.

“IRS Adjustment” is defined in Section 10.2.3.

“Klein” means Timothy M. Klein.

“Klein Separation Trigger” is defined in Section 12.5.1(b)(ii).

“Leucadia” means Leucadia National Corporation so long as it holds any Units and
thereafter shall mean the Permitted Transferee of Leucadia holding the most
Units of all the Permitted Transferees of Leucadia.

“Leucadia Manager” is defined in Section 7.3(a)(i).

“Lock Up Period” means the period commencing on the Effective Date and ending on
the 5th anniversary of the Effective Date.

“Manager” means any Person that is a member of the Board of Managers.

“Member Consent” means the approval, voting by Units held by the Members, of the
Members holding a majority of the outstanding Units, excluding Units owned and
voting by NBM or Leucadia or of their respective Affiliates; provided that if a
Member is disproportionately adversely affected by any action requiring Member
Consent compared to other Members (other

 

6

--------------------------------------------------------------------------------

than NBM or Leucadia or of their respective Affiliates), such Member’s consent
shall also be required.

“Member Nonrecourse Debt” means “partner nonrecourse debt” as defined under
Regulations Section 1.704-2(b)(4), substituting the term “Member” for the term
“partner” as the context requires.

“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each
“Member Nonrecourse Debt” equal to the Company Minimum Gain that would result if
the Member’s Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).

“Member Nonrecourse Deductions” means “partner nonrecourse deductions” as
defined in Regulations Section 1.704-2(i)(1) and (2), substituting the term
“Member” for the term “partner” as the context requires.

“Members” means the Persons listed as members on Exhibit A and any other Person
that both acquires an Interest in the Company and is admitted to the Company as
a Member.

“Minority Members” is defined in the Preamble hereto.

“Moody’s” means Moody’s Investors Service, Inc.

“Named Competitors” means those Persons identified in the letter agreement,
dated as [●], among NBM and the Minority Members.

“NBM” is defined in the preamble hereto.

“NBM Change of Control” means (a) any Person, other than Marcos Antonio Molina
dos Santos, Marcia Aparecida Pascoal Marçal dos Santos, their respective sons
and daughters, or any of their respective heirs or any affiliate of any of the
foregoing persons, becoming the direct or indirect owner of a majority of the
voting stock of NBM or NBM Ultimate Parent or (b) Marcos Antonio Molina dos
Santos ceases to serve as a director (conselheiro) of NBM Ultimate Parent for a
period in excess of six months.

“NBM Manager” is defined in Section 7.3(a)(iii).

“NBM Ultimate Parent” means Marfrig Global Foods S.A., a Brazilian corporation
(sociedade por ações).

“NBPCo” is defined in the introductory paragraph.

“Net Profit” and “Net Loss” are defined in Section 5.6.1.

“New Kleinco” is defined in the preamble hereto.

“Non-Participating Member” is defined in Section 3.6(b).

 

7

--------------------------------------------------------------------------------

“Nonrecourse Deductions” has the meaning set forth in Regulations Sections
1.704- 2(b)(1) and 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Regulations
Section 1.704-2(b)(3).

“Notice of Proposed Sale” is defined in Section 12.3.2.

“Notice of Sale” is defined in Section 12.1.1.

“Offered Units” is defined in Section 12.1.1.

“Original Agreement” is defined in the recitals hereto.

“Ownership Interest” means any capital stock, share, partnership interest,
membership interest, unit of participation, joint venture interest of any kind
or other similar interest (however designated) in any Person and any option,
warrant, purchase right, conversion right, exchange rights or other contractual
obligation which would entitle any Person to acquire any such interest in such
Person or otherwise entitle any Person to share in the equity, profit, earnings,
losses or gains of such Person (including stock appreciation, phantom stock,
profit participation or other similar rights).

“Partnership” is defined in the recitals hereto.

“Partnership Act” is defined in the recitals hereto.

“Partnership Tax Audit Rules” means Section 6221 through 6241 of the Code, as
amended by the Bipartisan Budget Act of 2015, together with any guidance issued
thereunder or successor provisions and any similar provision of state or local
tax laws.

“Partnership Representative” is defined in Section 10.2.1.

“Pay Date” is defined in Section 12.5.4.

“Pennsylvania LLC” is defined in the recitals hereto.

“Percentage Interest” of a Member as of a particular time means such Member’s
percentage ownership of the Company as designated on Exhibit A (as amended in
conformance with the procedures in Section 3.1).

“Permitted Financing Pledge” means a direct or indirect pledge or grant of
security interest over the Units owned by NBM or its Permitted Transferee that
relates to any financing undertaken by NBM to facilitate the purchase of the
Units by NBM (including any amendments, restatements, refinancings and
replacements thereof).

“Permitted Transferee” is defined in Section 11.2.

“Person” means an individual, partnership, joint venture, association,
corporation, trust, estate, limited liability company, limited liability
partnership, unincorporated entity of any kind, governmental entity, or any
other legal entity, including any Member.

 

8

--------------------------------------------------------------------------------

“Proposed Transferee” means the “Proposed Transferee” as used and defined in
Section 12.2.1 or Section 12.3.1, as applicable.

“Proxy Manager” is defined in Section 7.12.2.

“Purchase Agreement” is defined in the recitals hereto.

“Put Base Amount” means the Aggregate Units owned by the applicable Minority
Member as of the Effective Date.

“Put/Call Date” means a Put Date or a Call Date, as applicable.

“Put/Call Member(s)” means a Put Member(s) or a Call Member(s), as applicable.

“Put/Call Units” means Put Units or Call Units, as applicable.

“Put Date” is defined in Section 12.5.1(b)(ii).

“Put Election Period” is defined in Section 12.5.1(b)(ii).

“Put Fraction” means one third, unless an NBM Change of Control shall have
occurred, in which case it shall be equal to one.

“Put Member(s)” is defined in Section 12.5.1(a).

“Put Notice” is defined in Section 12.5.1(a).

“Put Units” is defined in Section 12.5.1(a).

“Putting Member” is defined in Section 12.5.1(a).

“Regulation D” means Regulation D under the Securities Act.

“Regulations” means the Treasury regulations, including temporary regulations,
promulgated under the Code.

“Regulatory Allocations” is defined in Section 5.7.

“Requisite Percentage” means, with respect to Leucadia, that Leucadia continues
to own [●]% of the total outstanding Units.1

“Resolving Firm” is defined in Section 12.5.3(b)(ii).

“Reviewed Year” means the Company’s taxable year to which the item being
adjusted relates.

 

 

1            Note to Draft: To include percentage that is equivalent to one
third of the number of Units owned by Leucadia as of the Effective Date.

 

9

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“ROFR Final Transfer Date” is defined in Section 12.2.3.

“ROFR Notice of Purchase” is defined in Section 12.2.1.

“ROFR Notice of Sale” is defined in Section 12.2.1.

“ROFR Offeree” is defined in Section 12.2.1.

“ROFR Offer Period” is defined in Section 12.2.1.

“ROFR Offered Units” is defined in Section 12.2.1.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc.

“Sale Percentage” means with respect to the Initiating Seller and each Selling
Member, an amount equal to the product of (i) the quotient obtained by dividing
(A) the number of Units owned by the Initiating Seller or such Selling Member,
as applicable, by (B) the aggregate number of Units owned by the Initiating
Seller and all Selling Members, collectively, and (ii) 100, expressed as a
percentage.

“Second Amended Agreement” is defined in the recitals hereto.

“Securities Act” means the Securities Act of 1933, as amended, and the rules,
regulations and interpretations promulgated pursuant thereto.

“Selling Member” means (a) for purposes of Section 12.1, the “Selling Member” as
defined in Section 12.1.1, (b) for purposes of Section 12.2, the “Selling
Member” as defined in Section 12.2.1, or (c) for purposes of Section 12.3, the
“Selling Member” as defined in Section 12.3.1.

“Senior Management Team” means at any particular time the Chief Executive
Officer and President of the Company.

“Similar Competitor” means any Person other than the Named Competitors that
operates a Competing Business of a type and on a scale similar to that of the
Named Competitors.

“Subsidiary” means, with respect to any Person, any other entity which is
Controlled by such Person.

“Succession Plan” means a plan approved by the Board of Managers for the orderly
succession of the Senior Management Team.

“Tag-Along Notice” is defined in Section 12.3.3.

“Tag-Along Period” is defined in Section 12.3.3.

“Tag-Along Right” is defined in Section 12.3.1.

 

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“Tag-Along Sale” is defined in in Section 12.3.1.

“Tax Distribution” is defined in Section 5.2.1.

“Tax Matters Member” is defined in Section 10.1.1.

“TEFRA Rules” means Section 6221 through 6255 of the Code in effect prior to
amendment by the Bipartisan Budget Act of 2015, together with any guidance
issued thereunder and any similar provision of state or local tax laws.

“Transfer” means to give, sell, assign, pledge, encumber, hypothecate, grant a
security interest in or otherwise dispose of or convey in any manner, directly
or indirectly, including by operation of law or change of ownership; provided
that a change of ownership of Leucadia or the NBM Ultimate Parent that is not
designed by the applicable party to avoid the Transfer restrictions hereunder
will not constitute a Transfer.

“Trigger” means the Annual Trigger, the COC Trigger, the Cattle Agreement
Trigger or the Klein Separation Trigger.

“Units” is defined in Section 3.2.

“USPB” is defined in the preamble hereto.

“Valuator” is defined in Section 12.5.3(b).

“Withholding Indemnified Parties” is defined in Section 5.4.

 

2.

FORMATION AND PURPOSE

2.1    Conversion; Formation. The Company was established as a limited liability
company in accordance with the Act by the filing of the Certificate of
Conversion and Certificate of Formation of the Company with the Delaware
Secretary of State pursuant to Section 18-214 of the Act. The rights and
liabilities of the Members shall be determined pursuant to the Act and this
Agreement. To the extent that the rights or obligations of any Member are
different by reason of any provision of this Agreement than they would be in the
absence of such provision, this Agreement shall, to the extent permitted by the
Act, control.

2.2    Name. The name of the Company is “National Beef Packing Company, LLC”.
The business of the Company may be conducted under that name or, upon compliance
with applicable laws, any other name that the Board of Managers deems
appropriate. The Board of Managers shall file, or shall cause to be filed, any
fictitious name certificates and similar filings, and any amendments thereto,
that the Board of Managers considers appropriate.

2.3    Registered Office/Agent. The registered office required to be maintained
by the Company in the State of Delaware pursuant to the Act shall be c/o The
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The
name and address of the registered agent of the Company pursuant to the Act
shall be The Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The Company may, upon compliance with the applicable

 

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provisions of the Act, change its registered office or registered agent from
time to time in the discretion of the Board of Managers.

2.4    Term. The term of the Company shall continue indefinitely unless sooner
terminated as provided herein. The existence of the Company as a separate legal
entity shall continue until the cancellation of the Certificate of Formation as
provided in the Act.

2.5    Purpose. The Company is formed for the purpose of, and the nature of the
business to be conducted by the Company is, engaging in any lawful act or
activity for which limited liability companies may be formed under the Act and
engaging in any activities necessary, convenient or incidental thereto.

2.6    Powers. Without limiting the generality of Section 2.5, the Company shall
have the power and authority to take any actions necessary, convenient or
incidental to or for the furtherance of the purposes set forth in Section 2.5,
including without limitation the power:

(a)    To conduct its business, carry on its operations and exercise the powers
granted to a limited liability company by the Act in any country, state,
territory, district or other jurisdiction, whether domestic or foreign;

(b)    To acquire by purchase, lease, contribution of property or otherwise,
own, hold, operate, maintain, finance, improve, lease, sell, convey, mortgage,
transfer, demolish or dispose of any real or personal property;

(c)    To negotiate, enter into, renegotiate, extend, renew, terminate, modify,
amend, waive, execute, perform and carry out and take any other action with
respect to contracts or agreements of any kind, and any leases, licenses,
guarantees and other contracts for the benefit of or with any Member or any
Affiliate of any Member, without regard to whether such contracts may be deemed
necessary, convenient or incidental to the accomplishment of the purpose of the
Company;

(d)    To purchase, take, receive, subscribe for or otherwise acquire, own,
hold, vote, use, employ, sell, mortgage, lend, pledge or otherwise dispose of,
and otherwise use and deal in and with, shares or other interests in or
obligations of domestic or foreign corporations, associations, general or
limited partnerships, trusts, limited liability companies, individuals or other
Persons, or direct or indirect obligations of the United States or any
government, state, territory, governmental district or municipality or any
instrumentality of any of them;

(e)    To lend money, to invest and reinvest its funds, and to accept real and
personal property for the payment of funds so loaned or invested;

(f)    To borrow money and issue evidence of indebtedness, and to secure the
same by a mortgage, pledge, security interest or other lien on the assets of the
Company;

(g)    To pay, collect, compromise, litigate, arbitrate or otherwise adjust or
settle any other claims or demands of or against the Company or to hold such
proceeds against the payment of contingent liabilities;

 

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(h)    To sue and be sued, defend and participate in administrative or other
proceedings in its name;

(i)    To appoint employees, officers, agents, consultants and representatives
of the Company, and define their duties and fix their compensation;

(j)    To indemnify any Person in accordance with the Act and this Agreement;

(k)    To cease its activities and cancel its Certificate of Formation; and

(l)    To make, execute, acknowledge and file any documents or instruments
necessary, convenient or incidental to the accomplishment of the purpose of the
Company.

2.7    Certificates. The officers of the Company and such other Persons as may
be designated from time to time by the Board of Managers are hereby designated
as authorized persons, within the meaning of the Act, to execute, deliver and
file any amendments or restatements of the Certificate of Formation or any
certificate of cancellation of the Certificate of Formation and any other
certificates and any amendments or restatements thereof necessary for the
Company to qualify to do business in a jurisdiction in which the Company may
wish to conduct business.

2.8    Principal Office. The principal executive office of the Company shall be
located at such place as the Board of Managers shall establish, and the Board of
Managers may from time to time change the location of the principal executive
office of the Company to any other place within or without the State of
Delaware. The Board of Managers may establish and maintain such additional
offices and places of business of the Company, either within or without the
State of Delaware, as it deems appropriate. The records required to be
maintained by the Act shall be maintained at one of the Company’s principal
offices, except as required by the Act.

2.9    No State-Law Partnership. The Members intend that the Company shall not
constitute or be treated as a partnership (including a limited partnership) or
joint venture, and that no Member or officer shall be a partner or joint
venturer of any other Member or officer, for any purposes other than federal,
state and local income tax purposes, and this Agreement shall not be construed
to the contrary.

 

3.

MEMBERSHIP, CAPITAL CONTRIBUTIONS AND UNITS

3.1    Members. The Members of the Company shall be listed on Exhibit A, as from
time to time amended and supplemented in accordance with this Agreement. Each
Member shall be treated as having contributed to the Company the amounts
indicated on Exhibit A as such Member’s aggregate Capital Contribution (which
amounts shall be the Capital Accounts with respect to such Units) and shall be
the holder of the number of Units set forth in Exhibit A. Exhibit A shall be
amended from time to time so that it sets forth, the then-current list of
Members, the total amount of Capital Contributions made by each such Member, the
number of Units held by such Member, and the Member’s Percentage Interest.

3.2    Member Interests and Units. The Interests of the Members of the Company
shall consist of one class of units (the “Units”).

 

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3.3    Additional Members and Units. Subject to Sections 3.6 and 7.4.2 hereof,
the Board of Managers may issue Units and admit Persons as Members in exchange
for such contributions to capital (including commitments to make contributions
to capital) or such other consideration (including past or future services) and
on such terms and conditions (including in the case of Units issued to employees
and consultants such vesting and forfeiture provisions) as the Board of Managers
determines to be appropriate. If additional Units are subsequently issued by the
Company, the Capital Account (if any) with respect to those Units as of the date
of issuance and the Capital Contributions (if any) that shall be deemed to be
made by the Member receiving such Units as of the date of issuance shall be set
forth in the agreement pursuant to which the additional Units are issued.
Promptly following the issuance of Units, the Board of Managers shall cause the
books and records of the Company, and an amended Exhibit A hereto, to reflect
the number of Units issued, any Members or additional Members holding such Units
and in the case of Units issued other than in connection with the performance of
services, the Capital Contribution per Unit, and the Company shall promptly
provide the amended Exhibit A to each Member. Upon the receipt of approvals as
required under this Agreement, execution of this Agreement or a counterpart of
this Agreement, together with any other documents or instruments required by the
Board of Managers in connection therewith, and the making of the Capital
Contribution (if any) specified to be made at such time, a Person shall be
admitted to the Company as a Member of the Company.

3.4    Capital Contributions. Each Member’s Capital Contribution, if any,
whether in cash or in-kind, and the number of Units issued to such Member shall
be as set forth in Exhibit A. Any Member making an in-kind Capital Contribution
agrees from time to time to do such further acts and execute such further
documents as the Board of Managers may direct to perfect the Company’s interest
in such in-kind Capital Contribution.

3.5    Termination of Governance Rights. Notwithstanding any other provision of
this Agreement, if, without the Board of Managers’ consent, at any time after
the Effective Date, a Competing Business shall acquire (whether effected by
merger, purchase of assets, lease, equity exchange or otherwise) Control of a
Member (or a Member shall Control, be Controlled by or under common Control with
a Competing Business) or any Units from a Member, then upon the occurrence of
such event any Governance Rights of such Member or associated with such Units
shall automatically terminate, subject to Section 11.8; provided that this
Section 3.5 shall not apply to Leucadia or NBM or any of their respective
Permitted Transferees (or an Assignee in a Transfer in connection with a
Permitted Financing Pledge) and shall not be construed to prohibit the
transactions by NBPCo in Sections 6.8 and 6.9.

3.6    Additional Issuances of Units.

(a)    The Board of Managers shall not offer to sell or otherwise issue
additional Units to any Person, including to any other Member, unless: (i) (x)
the Board’s resolutions authorizing the sale or issuance of such additional
Units describe in reasonable detail the Company’s business purpose for
undertaking, and the terms of, such proposed issuance or (y) the Board shall
have determined that such issuance of Units is, in their good faith judgment,
advisable for the Company; and (ii) the Board of Managers shall have complied
with this Section 3.6 and, if applicable, Section 7.4.2.

 

 

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(b)    Prior to offering to sell or otherwise issue additional Units, the Board
of Managers shall first offer to the Members the opportunity to purchase such
offered Units on a pro rata basis in accordance with their Percentage Interests
at the same price, and on the same terms and conditions, as the Board of
Managers is prepared, or proposes, to offer or issue such additional Units to
any other Member or to any Person who, prior to such sale or issuance, is not a
Member of the Company. The Members shall have a period of 30 days to accept such
offer (or, in the case of a sale or issuance to any Person who is not, prior to
such sale or issuance, a Member of the Company, 10 days). In the event any
Member (a “Non-Participating Member”) does not purchase all of the additional
Units offered to such Member pursuant to the first sentence of this
Section 3.6(b), the Board of Managers shall offer the Members that elect to
purchase their entire pro rata share of the additional Units offered to such
Members pursuant to the first sentence of this Section 3.6(b) the right to
purchase the additional Units not purchased by the Non-Participating Member on a
pro rata basis in accordance with their respective Percentage Interests (or in
any other manner they may unanimously agree upon in writing), which offer the
applicable Members may accept by providing notice of such acceptance to the
Company within five days after such offer. This Section 3.6(b) may not be
amended without the consent of each Member that would be adversely impacted by
such amendment.

(c)    Upon expiration of the periods described in Section 3.6(b), the Company
shall be entitled to offer, issue or sell such additional Units that the Members
have not elected to purchase during the 180 days following such expiration on
terms and conditions not materially more favorable to the purchasers thereof
than those offered to the Members pursuant to Section 3.6(b). Any additional
Units proposed to be offered, issued or sold by the Company after such 180-day
period, or offered, issued or sold by the Company during such 180-day period on
terms or conditions materially more favorable than those offered to the Members
pursuant to Section 3.6(b), must be reoffered to the Members in accordance with
the terms of this Section 3.6 prior to any such offer, issuance or sale.

(d)    The provisions of this Section 3.6 shall not apply to: (i) Units that are
issued in order to acquire the assets or business of another Person; or
(ii) Units that are issued to employees or consultants pursuant to compensation
plans or agreements approved by the Board of Managers.

 

4.

CAPITAL ACCOUNTS

4.1    Allocations. The Net Profits and Net Loss of the Company and any items of
income, gain, deduction or loss that are specially allocated in any Fiscal Year
or other fiscal period shall be allocated among the Members as provided in
Article 5.

4.2    Capital Accounts. A separate account (each a “Capital Account”) shall be
established and maintained on the books of the Company for each Member which:

(a)    shall be increased by (i) the amount of cash and the fair market value of
any other property contributed by such Member to the Company as a Capital
Contribution (net of liabilities secured by such property or that the Company
assumes or takes the property subject to) and (ii) such Member’s distributive
share of the Net Profit of the Company, and

 

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any items in the nature of income or gain that are specially allocated to such
Member pursuant to Article 5 or other provisions of the Agreement,

(b)    shall be reduced by (i) the amount of cash and the fair market value of
any other property distributed to such Member (net of liabilities secured by
such property or that the Member assumes or takes the property subject to) and
(ii) such Member’s distributive share of the Net Loss of the Company and any
items in the nature of expenses or losses that are specially allocated to such
Member pursuant to Article 5 or other provisions of the Agreement, and

(c)    shall take into account in determining the amount of any liability for
purposes of clauses (a) and (b) above, Section 752(c) and any other applicable
provisions of the Code and Regulations.

It is the intention of the Members that the Capital Accounts of the Company be
maintained in accordance with the provisions of Section 704(b) of the Code and
the Regulations thereunder and that this Agreement be interpreted consistently
therewith. No Member shall have an obligation to the Company or to any other
Member to restore any negative balance in the Capital Account of such Member.

4.3    Revaluations of Assets and Capital Account Adjustments. Unless otherwise
determined by the Board of Managers, (i) immediately preceding the issuance of
additional Units in exchange for cash, property or services to a new or existing
Member, (ii) upon the redemption of the Interest of a Member or a portion
thereof, (iii) upon the liquidation of the Company within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g) and (iv) at such other times as are
necessary or advisable, as reasonably determined by the Board of Managers, in
order to comply with Regulations Sections 1.704-1(b) and 1.704-2, the
then-prevailing Asset Values of the Company shall be adjusted to equal their
respective gross fair market values, as determined in good faith by the Board of
Managers, and any increase in the net equity value of the Company (Asset Values
less liabilities) shall be credited to the Capital Accounts of the Members in
the same manner as Net Profits are credited under Section 5.6.2 (or any decrease
in the net equity value of the Company shall be charged in the same manner as
Net Losses are charged under Section 5.6.2). Accordingly, as of the date of (i),
(ii), (iii) or (iv), as applicable, the Capital Accounts of Members will reflect
both realized and unrealized gains and losses through such date and the net fair
market value of the equity of the Company as of such date.

4.4    Additional Capital Account Adjustments. Any income of the Company that is
exempt from federal income tax shall be credited to the Capital Accounts of the
Members in the same manner as Net Profits are credited under Section 5.6.2 when
such income is realized. Any expenses or expenditures of the Company which may
neither be deducted nor capitalized for federal income tax purposes (or are so
treated for federal income tax purposes) shall be charged to the Capital
Accounts of the Members in the same manner as Net Losses are charged under
Section 5.6.2. If the Company is subject to an election under Section 754 of the
Code to provide a special basis adjustment upon the transfer of an Interest in
the Company or the distribution of property by the Company in accordance with
Code Section 734(b) or 743(b), Capital Accounts shall be adjusted to the limited
extent required by the Regulations under Section 704 of the Code following such
transfer or distribution, as reasonably determined by the Board of Managers.

 

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4.5    Additional Capital Account Provisions. No Member shall have the right to
demand a return of all or any part of such Member’s Capital Contributions. Any
return of the Capital Contributions of any Member shall be made solely from the
assets of the Company and only in accordance with the terms of this Agreement.
No interest shall be paid to any Member with respect to such Member’s Capital
Contributions or Capital Account. In the event that all or a portion of the
Units of a Member are transferred in accordance with this Agreement, the
transferee of such Units shall also succeed to all or the relevant portion of
the Capital Account of the transferor. Units held by a Member may not be
transferred independently of the Interest to which the Units relate.

 

5.

DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS

5.1    Board of Managers Determination; Annual Distribution. The Board of
Managers shall determine the timing and the aggregate amount of any
Distributions to Members; provided, however, that:

5.1.1    The Company shall make a Tax Distribution not later than the dates
specified in Section 5.2.1, unless the Members each consent otherwise.

5.1.2    The Board of Managers may make any additional Distributions to the
Members, pro rata in accordance with each Member’s Percentage Interest (except
as set forth in Section 12.5 hereof), in such aggregate amounts and on such
occasions as the Board of Managers may determine; provided that the Board of
Managers shall distribute all Excess Cash, to the extent not previously
distributed, within 60 days after the end of each fiscal year (subject to such
Excess Cash being distributable in accordance with any contractual restrictions
under the Credit Documents and applicable law). Except as set forth in
Section 12.5, no distributions shall be made by the Board of Managers to Members
other than pro rata in accordance with each Member’s Percentage Interest.

5.1.3    Except as set forth in Section 12.5, but notwithstanding any other
provision of this Agreement or the provisions of the Act, no Person shall have
any claim or right of enforcement with respect to or arising out of a Tax
Distribution (whether under Article 5 or otherwise) against (i) any Manager,
(ii) any Member or (iii) any Affiliate of a Manager or a Member, and such
Person’s sole recourse with respect to or arising out of a Tax Distribution
shall be against the Company. For the avoidance of doubt, except for the rights
of the Members pursuant to Article 12, which are not being waived by this
sentence, if and to the extent any such claim or right exists or may be deemed
to exist, each Manager, Member, and any of their respective Affiliates (and any
Person claiming by or through any such member of the Board of Managers, Member
or Affiliate) hereby waives any such claim or right against any Manager, any
Member and each Affiliate of any such member of the Board of Managers or Member,
as the case may be. For purposes of this Section 5.1.3, “Affiliates” of a Person
shall exclude the Company and its Subsidiaries.

5.2    Distributions. Distributions from the Company to its Members shall be
made only after allocating the Net Profit or Net Loss of the Company through the
date as of which the Distribution is being charged to the Capital Accounts of
the Members. Such Distributions shall be charged to the Capital Accounts of the
Members and made in the following order (except that

 

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no Member shall be entitled to receive a Distribution that would create or
increase a deficit balance in such Member’s Capital Account unless the Capital
Accounts of all Members have previously been reduced to zero):

5.2.1      Tax Distributions. Except as set forth in Section 12.5, the Company
shall distribute to all Members prior to the 10th day before the due date of the
federal quarterly estimated tax payments an aggregate amount equal to the Base
Tax Rate times the allocations of taxable income made or expected to be made
pursuant to this Article 5 for such quarter (the “Tax Distribution”). The Board
of Managers shall determine the amount to be distributed to the Members pursuant
to this Section 5.2.1 in its reasonable discretion based on such reasonable
assumptions as the Board of Managers determines in good faith to be appropriate,
including by making reasonable adjustments to each quarter’s Tax Distributions
to take into account the extent to which Tax Distributions paid in prior
quarters are less or more than the amount required to take into account actual
taxable income for such quarters and estimated taxable income for the current
quarter. Except as set forth in Section 12.5, Tax Distributions shall be divided
among the Members pro rata in accordance with their Percentage Interests;
provided that if there is a change in Percentage Interest of any Member during
any taxable period, such allocations shall be based on allocations of taxable
income during each such portion of the taxable period, as determined under
Section 5.6.1(d). The “Base Tax Rate” shall be equal to 54%. The Board of
Managers shall consider adjusting the Base Tax Rate to be above 54% if requested
by a Member upon a determination that the federal and state tax rates affecting
the Member (or the Member’s taxpayers) have increased by more than 1%; provided,
however, the Board of Managers shall have no obligation to increase the Base Tax
Rate. For purposes of computing taxable income under this Section 5.2.1, taxable
income shall be determined without taking account the effect of any benefit to a
Member under Sections 199A, 743(b), or 734(b) of the Code, but after taking into
account the effect of any allocations pursuant to Section 704(c) of the Code.
All Tax Distributions shall be treated as an advance against, and shall be taken
into account in determining, other distributions pursuant to Section 5.2.2 or
Section 13.3.

5.2.2      Other Distributions. Except as set forth in Section 12.5, all other
Distributions (including the annual distribution of Excess Cash pursuant to
Section 5.1.2) shall be allocated among the Members pro rata in accordance with
their Percentage Interests at the time of such Distributions.

5.3    No Violation. Notwithstanding any provision to the contrary contained in
this Agreement, the Company shall not make a Distribution to any Member on
account of such Member’s Interest in the Company if such Distribution would
violate any contractual restriction binding on the Company under the Credit
Documents, Section 18-607 of the Act or other applicable law.

5.4    Withholdings. Subject to the terms of Section 12.5, the Board of Managers
is authorized to withhold from Distributions to Members, or with respect to
allocations to Members and in each case to pay over to the appropriate federal,
state, local or foreign government any amounts required by law to be so
withheld. All amounts withheld pursuant to the Code or any federal, state, local
or foreign tax law with respect to any payment, distribution or allocation to
the

 

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Company shall be treated as amounts paid to the Company and each Member shall be
treated as having received a distribution pursuant to Section 5.2 hereof equal
to the portion of the withholding tax allocable to such Member, as determined by
the Board of Managers. Any taxes withheld on a payment to the Company or a
payment by the Company to a Member pursuant to this Section 5.4 shall be treated
as if distributed to the relevant Member to the extent that an amount equal to
such withheld taxes would then be distributable to such Member, and, to the
extent in excess of such distributable amounts, as a demand loan payable by the
Member to the Company with interest at the prime rate in effect from time to
time plus 2%, compounded annually. The Board of Managers may, in its sole
discretion, either demand payment of the principal and accrued interest on such
demand loan at any time, and enforce payment thereof by legal process, or
withhold from one or more distributions to a Member amounts sufficient to
satisfy such Member’s obligations under any demand loan payable to the Company.
In the event that the Company receives a refund of taxes previously withheld by
a third party from one or more payments to the Company, the economic benefit of
such refund shall be apportioned among the Members in a manner reasonably
determined by the Board of Managers to offset the prior operation of this
Section 5.4 in respect of such withheld taxes. Promptly upon request, each
Member shall provide the Company with any information related to such Member
that is necessary (a) to allow the Company to comply with any tax reporting, tax
withholding, or tax payment obligations of the Company or (b) to establish the
Company’s legal entitlement to an exemption from, or reduction of, or refund or
credit of withholding tax. As a security for any withholding tax or other
liability or obligation to which the Company may be subject as a result of any
act or status of any Member, or to which the Company may become subject with
respect to the Interest of any Member, the Company shall have (and each Member
hereby grants to the Company) a security interest in all distributable assets of
the Company distributable to such Member to the extent of the amount of such
withholding tax or other liability or obligation. Neither the Company nor the
Board of Managers shall be liable for any excess taxes withheld in respect of
any Member’s Interest, and, in the event of overwithholding, a Member’s sole
recourse shall be to apply for a refund from the appropriate governmental
authority. If the Company, the Board of Managers, any Member in such Member’s
capacity acting as the Tax Matters Member or the Partnership Representative (as
applicable), or any of their respective Affiliates, or any of their respective
officers, directors, employees, managers, members and, as determined by the
Board of Managers in its sole and absolute discretion, consultants or agents
(the “Withholding Indemnified Parties” and each a “Withholding Indemnified
Party”), becomes liable as a result of failure to withhold and remit taxes in
respect of any Member, then, in addition to, and without limiting, any
indemnities for which such Member may be liable under this Agreement, unless
otherwise agreed by the Board of Managers in writing, such Member shall, to the
fullest extent permitted by law, indemnify and hold harmless the Withholding
Indemnified Parties, in respect of all taxes, including interest and penalties,
and any expenses incurred in any examination, determination, resolution and
payment of such liability, except with respect to any interest, penalties or
expenses which arise as a result of any act or omission with respect to which a
court of competent jurisdiction has issued a final, nonappealable judgment that
such applicable Withholding Indemnified Party was grossly negligent or engaged
in willful misconduct or fraud. The provisions contained in this Section 5.4
shall survive the termination of the Company and the Transfer of any Interest.

5.5    Property Distributions and Installment Sales. If any assets of the
Company shall be distributed in kind pursuant to this Article 5, such assets
shall be distributed to the Members entitled thereto in the same proportions as
the Members would have been entitled to cash

 

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Distributions. The amount by which the fair market value of any property to be
distributed in kind to the Members exceeds or is less than the then prevailing
Asset Value of such property shall, to the extent not otherwise recognized by
the Company, be taken into account in determining Net Profit and Net Loss and
determining the Capital Accounts of the Members as if such property had been
sold at its fair market value immediately prior to such Distribution. If any
assets are sold in transactions in which, by reason of Section 453 of the Code,
gain is realized but not recognized, such gain shall be taken into account when
realized in computing gain or loss of the Company for purposes of allocation of
Net Profit or Net Loss under this Article 5 and, if such sales shall involve
substantially all the assets of the Company, the Company shall be deemed to have
been dissolved and terminated notwithstanding any election by the Members to
continue the Company for purposes of collecting the proceeds of such sales.

5.6      Net Profit or Net Loss.

5.6.1        The “Net Profit” or “Net Loss” of the Company for each Fiscal Year
or relevant part thereof shall mean the Company’s taxable income or loss for
federal income tax purposes for such period (including all items of income,
gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code) with the following adjustments:

(a)    Gain or loss attributable to the disposition of property of the Company
with an Asset Value different from the adjusted basis of such property for
federal income tax purposes shall be computed with respect to the Asset Value of
such property, and any tax gain or loss not included in Net Profit or Net Loss
shall be taken into account and allocated for federal income tax purposes among
the Members pursuant to Section 5.8.

(b)    Depreciation, amortization or cost recovery deductions with respect to
any property with an Asset Value that differs from its adjusted basis for
federal income tax purposes shall be computed in accordance with Asset Value,
and any depreciation allowable for federal income tax purposes shall be
allocated in accordance with Section 5.8.

(c)    Any items that are required to be allocated pursuant to Section 5.7 shall
not be taken into account in determining Net Profit or Net Loss.

(d)    In the event of a variation of Percentage Interests during a Fiscal Year,
whether as a result of a Transfer of Interests or new issuance or repurchase of
Units or otherwise, Net Profit or Net Loss and any other items of income, gain,
loss, deduction and credit of the Company shall be allocated to the portions of
such Fiscal Year preceding and following such variation based on an interim
closing of the books, except where otherwise required by Section 706 of the Code
and the Regulations thereunder.

5.6.2    General Allocations.

(a)    Hypothetical Liquidation. The items of income, expense, gain and loss of
the Company comprising Net Profit or Net Loss for a Fiscal Year shall be
allocated among the Members that were Members during such Fiscal Year in a
manner that will, as nearly

 

20

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as possible, cause the Capital Account balance of each Member at the end of such
Fiscal Year to equal the excess (which may be negative) of:

(i)    the hypothetical distribution (if any) that such Member would receive if,
on the last day of the Fiscal Year, (x) all Company assets, including cash, were
sold for cash equal to their then-prevailing Asset Values, taking into account
any adjustments thereto for such Fiscal Year, (y) all Company liabilities were
satisfied in cash according to their terms (limited, with respect to each
Nonrecourse Liability, to the then-prevailing Asset Value of the assets securing
such liability) and (z) the net proceeds thereof (after satisfaction of such
liabilities) were distributed in full pursuant to Section 13.3 hereof; over

(ii)    the sum of (x) the amount, if any, which such Member is obligated to
contribute to the capital of the Company, (y) such Member’s share of the Company
Minimum Gain determined pursuant to Regulations Section 1.704-2(g), and (z) such
Member’s Member Nonrecourse Debt Minimum Gain determined pursuant to Regulations
Section 1.704-2(i)(5), all computed immediately prior to the hypothetical sale
described in Section 5.6.2(a)(i) above.

 For purposes of the foregoing hypothetical sale described in
Section 5.6.2(a)(i) above, all assets and liabilities of any entity that is
wholly-owned by the Company and disregarded as an entity separate from the
Company for federal income tax purposes shall be treated as assets and
liabilities of the Company.

  (b)    Loss Limitation. Notwithstanding anything to the contrary in this
Section 5.6.2(b), the amount of items of Company expense and loss allocated
pursuant to this Section 5.6.2(b) to any Member shall not exceed the maximum
amount of such items that can be so allocated without causing such Member to
have an Adjusted Capital Account Deficit at the end of any Fiscal Year, unless
each Member would have an Adjusted Capital Account Deficit. All such items in
excess of the limitation set forth in this Section 5.6.2(b) shall be allocated
first, to Members who would not have an Adjusted Capital Account Deficit, pro
rata, in proportion to their Capital Account balances, adjusted as provided in
clauses (i) and (ii) of the definition of Adjusted Capital Account Deficit,
until no Member would be entitled to any further allocation, and thereafter, to
all Members, pro rata, in proportion to their Percentage Interests.

  5.6.3    Interpretation. The Members intend for the allocation provisions set
forth in this Agreement to comply with Section 704(b) of the Code and the
Regulations thereunder and to appropriately reflect the Members’ rights to
Distributions as set forth in Sections 5.2 and 13.3, and the Board of Managers
shall interpret the provisions in accordance with such intent and make such
adjustments as may be necessary to effect such intent; provided, however, that
any such interpretation or adjustment shall affect only Capital Accounts and
allocations and shall not affect any Member’s rights to Distributions as set
forth in this Agreement.

5.7      Regulatory Allocations. Although the Members do not anticipate that
events will arise that will require application of this Section 5.7, provisions
governing the allocation of taxable

 

21

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income, gain, loss, deduction and credit (and items thereof) are included in
this Agreement as may be necessary to provide that the Company’s allocation
provisions contain a so-called “Qualified Income Offset” within the meaning of
Regulation Section 1.704-1(b)(2)(ii)(d) and comply with all provisions relating
to the allocation of (i) Company Minimum Gain and Member Nonrecourse Debt
Minimum Gain and the chargeback thereof as set forth in the Regulations under
Section 704(b) of the Code and (ii) Nonrecourse Deductions and Member
Nonrecourse Deductions (clauses (i) and (ii) together, the “Regulatory
Allocations”); provided, however, that the Members intend that all Regulatory
Allocations that may be required shall be offset by other Regulatory Allocations
or special allocations of items so that each Member’s share of the Net Profit,
Net Loss and capital of the Company will be the same as it would have been had
the events requiring the Regulatory Allocations not occurred. For this purpose,
the Board of Managers, based on the advice of the Company’s auditors or tax
counsel, is hereby authorized to make such special curative allocations of tax
items as may be necessary to minimize or eliminate any economic distortions that
may result from any required Regulatory Allocations.

5.8      Tax Allocations. Code Section 704(c) and Unrealized Appreciation or
Depreciation.

5.8.1        Contributed Assets. In accordance with Section 704(c) of the Code,
income, gain, loss and deduction with respect to any property contributed to the
Company with an adjusted basis for federal income tax purposes different from
the initial Asset Value at which such property was accepted by the Company
shall, solely for tax purposes, be allocated among the Members so as to take
into account such difference in the manner required by Section 704(c) of the
Code and the applicable Regulations.

5.8.2        Revalued Assets. If upon the acquisition of additional Units in the
Company by a new or existing Member the Asset Value of any the assets of the
Company is adjusted pursuant to Section 4.3, subsequent allocations of income,
gain, loss and deduction with respect to such assets shall, solely for tax
purposes, be allocated among the Members so as to take into account such
adjustment in the same manner as under Section 704(c) of the Code and the
applicable Regulations.

5.8.3        Elections and Limitations. The allocations required by this
Section 5.8 are solely for purposes of federal, state and local income taxes and
shall not affect the allocation of Net Profits or Net Losses as between Members
or any Member’s Capital Account. All tax allocations required by this
Section 5.8 shall be made using the “traditional method” that is described in
the Regulations Section 1.704-3.

5.8.4        Allocations. Except as noted above, all items of income, deduction
and loss shall be allocated for federal, state and local income tax purposes in
the same manner as such items are allocated for purposes of calculating Net
Profits and Net Losses.

5.9      Imputed Tax Underpayment. To the extent there is an adjustment by the
IRS or other taxing authority to an item of income, gain, loss, deduction or
credit of the Company, or an item of income, gain, loss, deduction or credit of
any entity that is treated as a partnership for federal income tax purposes in
which the Company holds an ownership interest that is allocable to the Company
(or, in each case, an adjustment to any Member’s distributive share thereof),
the

 

22

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Partnership Representative shall reallocate the adjusted items among each Member
or former Member in accordance with the final resolution of such audit
adjustment. Notwithstanding any other provision of this Agreement, each Member
(or former Member) shall bear any tax, interest, penalty or “imputed
underpayment” under Code Section 6225 (if applicable) or similar amount
resulting from the final resolution of any audit adjustment (the “Imputed Tax
Underpayment”) to the extent such Imputed Tax Underpayment is attributable to
such Member (or former Member) or results from the status of such Member (or
such former Member) as a Member in the Reviewed Year.

 

6.

STATUS, RIGHTS AND POWERS OF MEMBERS AND CERTAIN MEMBER AGREEMENTS

6.1    Limited Liability. Except as otherwise provided by the Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, expenses, obligations and liabilities of
the Company, and no Member or Indemnified Person shall be obligated personally
for any such debt, expense, obligation or liability of the Company solely by
reason of being a Member or Indemnified Person. All Persons dealing with the
Company shall have recourse solely to the assets of the Company for the payment
of the debts, obligations or liabilities of the Company. In no event shall any
Member be required to make up any deficit balance in such Member’s Capital
Account upon the liquidation of such Member’s Interest or otherwise.

6.2    Return of Distributions of Capital. Except as otherwise expressly
required by law, a Member, in such capacity, shall have no liability for
obligations or liabilities of the Company in excess of (a) the amount of such
Member’s Capital Contributions, (b) such Member’s share of any assets and
undistributed profits of the Company and (c) to the extent required by law, the
amount of any Distributions wrongfully distributed to such Member. Except as
required by law, no Member shall be obligated by this Agreement to return any
Distribution to the Company or pay the amount of any Distribution for the
account of the Company or to any creditor of the Company; provided, however,
that if any court of competent jurisdiction holds that, notwithstanding this
Agreement, any Member is obligated to return or pay any part of any
Distribution, such obligation shall bind such Member alone and not any other
Member or any Manager. The provisions of the immediately preceding sentence are
solely for the benefit of the Members and shall not be construed as benefiting
any third party. The amount of any Distribution returned to the Company by a
Member or paid by a Member for the account of the Company or to a creditor of
the Company shall be added to the account or accounts from which it was
subtracted when it was distributed to such Member.

6.3    No Management or Control. Except as expressly provided in this Agreement
and notwithstanding Section 18-402 of the Act, no Member shall take part in, or
interfere in any manner with, the management of the business and affairs of the
Company or have any right or authority to act for or bind the Company.

6.4    Specific Limitations. No Member shall have the right or power to:
(a) withdraw or reduce such Member’s Capital Contribution except as a result of
the dissolution of the Company or as otherwise provided by law or in this
Agreement; (b) make voluntary Capital Contributions or contribute any property
to the Company other than cash; (c) bring an action for partition against

 

23

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the Company or any Company assets; (d) cause the termination and dissolution of
the Company, except as expressly set forth in this Agreement; or (e) upon the
Distribution of its Capital Contribution, require that property other than cash
be distributed in return for its Capital Contribution. Each Member hereby
irrevocably waives any such rights.

6.5      Member Voting. Except as otherwise set forth in this Agreement or
required by the Act, all powers of the Members shall be exercised in accordance
with Section 7.3 by the appointment of the Board of Managers. To the extent a
vote of, or consent by, “members” is required under the Act, or is otherwise
sought by the Company, the Members shall be entitled to one vote per Unit on all
matters to be so voted on.

6.6      Required Consents; Modification of Unit Terms.

 6.6.1    Until the date on which the Cattle Agreement Trigger occurs, none of
the following actions shall be taken by the Company without prior written Member
Consent:

(a)    Entering into any contracts, agreements or transactions with any of the
Members or their Affiliates that are (i) on an arm’s length basis and would
result in annual payments by or to the Company in excess of $5,000,000 or
(ii) not on an arm’s length basis, other than the issuance of Units or Interests
to Members in compliance with Section 3.6(b). This Section 6.6.1 shall not apply
to any contracts, agreements or transactions between the Company and its
Subsidiaries, including any loans or financing transactions.

(b)    Except as required by the Credit Documents, actions that contractually
restrict (i) the making of distributions to Members as provided for in this
Agreement or (ii) any required or mandatory repurchases by the Company of any
Units as provided for in this Agreement.

(c)    The taking of any of the foregoing actions by any direct or indirect
Subsidiary of the Company.

 6.6.2    Except as set forth in Section 12.5, the Company shall not modify or
alter the rights, preferences or privileges of any Units, including by way of an
amendment to this Agreement, which modification or alteration would adversely
affect the economic entitlements of a holder of a Unit under this Agreement
without the prior written consent of each such affected holder; provided,
however, that the Company may issue Units as provided in Sections 3.6 and 7.4.2.

6.7      Restrictions on Member Competition. In consideration of the mutual
covenants and agreements of the Company and the Members set forth in this
Agreement, the Members set forth below hereby covenant and agree as follows:

(a)    Certain Activities of USPB Prohibited. For so long as USPB or any of its
Affiliates owns or Controls any Units of the Company, but in any event until
December 31, 2021, neither USPB nor any of its Affiliates shall, directly or
indirectly, singularly or in the aggregate, own or Control any Ownership
Interests of, or otherwise run, manage, operate, direct, Control or participate
in the ownership, management, operation or Control

 

24

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of, any Competing Business or any Competing Facility, other than an Ownership
Interest of not more than 2.0% in the aggregate in any publicly traded entity
that is a Competing Business or that owns or Controls a Competing Business or a
Competing Facility.

  (b)      Certain Activities of NBPCo Prohibited.

(i)    Except as otherwise set forth below, for so long as NBPCo or any of its
Affiliates owns or Controls any Units of the Company, neither NBPCo nor any of
its Affiliates shall, directly or indirectly, singularly or in the aggregate,
own or Control more than 5% of the Ownership Interests of, or otherwise run,
manage, operate, direct, Control or participate in the management, operation or
Control of, any Competing Business or any Competing Facility.

(ii)    The Members acknowledge and agree that NBPCo and its Affiliates directly
and indirectly compete with the Company in segments of the beef market not
constituting a Competing Business or a Competing Facility, and nothing in this
Agreement shall in any way limit the ability of NBPCo and its Affiliates to
compete with the Company, subject to clauses (i), (iii), (iv) and (v) of this
Section 6.7(b).

(iii)    For so long as NBPCo or any of its Affiliates owns or Controls any
Units of the Company, if at any time NBPCo or its Affiliates commences a venture
on its own that directly or indirectly competes with the Company in a segment of
the beef market, then NBPCo will offer the Company an opportunity to supply beef
as a raw material to such business activity, on arm’s length terms and
conditions.

(iv)    For so long as NBPCo or any of its Affiliates owns or Controls any Units
of the Company, if at any time NBPCo or its Affiliates commences a venture in
conjunction with a Competing Business or Competing Facility that directly or
indirectly competes with the Company in a segment of the beef market, then NBPCo
or its Affiliate, as applicable, will offer the Company an opportunity to
participate in a comparable venture on terms and conditions that are at least as
favorable as the terms and conditions offered to, and agreed with, such
Competing Business or Competing Facility. If the opportunity is offered to the
Company, and the Company fails, within 30 days after being so presented with
such opportunity, to accept such opportunity, or otherwise fails to pursue such
opportunity with reasonable diligence, then the Company will waive its right to
require NBPCo or its Affiliate, as applicable, to continue such offer and shall
likewise waive any claim that the engagement by NBPCo or its Affiliate in such
activity with a Competing Business or Competing Facility on the terms and
conditions offered to the Company violates this Section 6.7(b) or constitutes a
breach of the fiduciary duties of NBPCo’s Manager designee, if applicable.

(v)    NBPCo will not use its or its Affiliate’s Ownership Interest in the
Company, to gather Confidential Information from the Company or to block
competitive projects of the Company, and NBPCo agrees not to use any
Confidential Information for any purpose not related to the Company’s conduct of
its business or otherwise in a manner detrimental to the Company.
Notwithstanding

 

25

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any other provision of this Agreement, if NBPCo or any of its Affiliates seeks
to, or does acquire, engage in, or operate a venture of the type described above
or that otherwise competes with the Company, the Board of Managers may restrict
the access of NBPCo and its Affiliates to Confidential Information in the Board
of Managers’ sole discretion, and NBPCo agrees that, at the request of the Board
of Managers, neither NBPCo nor any of its Affiliates will participate in or
receive information related to Board of Managers meetings and other discussions
relating to such Confidential Information or the consideration of the Company’s
involvement in such venture, Competing Business or Competing Facility.

(vi)    Section 6.7(b) may not be amended without the consent of NBPCo so long
as NBPCo or any of its Affiliates owns or controls any Units of the Company.

(vii)    For purposes of this Section 6.7(b) only, “Competing Business” means a
business or a Person conducting or Controlling a business that directly or
indirectly competes with the business of the Company by engaging in the business
of cattle slaughtering, beef processing or hide tanning in the United States or
Mexico; and “Competing Facility” means any cattle slaughtering facility, any
beef processing facility or any hide tanning facility owned by a Competing
Business in the United States or Mexico.

(c)      Certain Activities of Klein Prohibited. Until the two-year anniversary
of the date that Klein, New Kleinco and their respective Affiliates no longer
own or Control any of the Units of the Company, none of Klein, New Kleinco or
their respective Affiliates shall, directly or indirectly, own or Control any
Ownership Interests of, or otherwise run, manage, operate, direct, Control or
participate in the ownership, management, operation or Control of, any Competing
Business or any Competing Facility, other than an Ownership Interest of not more
than 2.0% in the aggregate in any publicly traded entity that is a Competing
Business or that owns or Controls a Competing Business or a Competing Facility.

(d)      Severability. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 6.7 is invalid
or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability will have the power to reduce
the scope, duration or area of the term or provision, to delete specific words
or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement will be enforceable as so modified after the expiration of the
time within which the judgment may be appealed.

6.8    Agreement for NBPCo to Negotiate Certain Requirements Contracts in Good
Faith. From and after the Effective Date, the Company and NBPCo agree to
continue to meet and negotiate in good faith and on an arm’s length basis to
ensure the Company’s ability to acquire all its requirements of NBPCo’s finished
product, and NBPCo’s ability to acquire all of its requirements of the Company’s
trim, with equal to or less than 50% lean, each on terms and

 

26

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conditions at least as favorable as the terms and conditions that such party
would permit any other Person to participate in such transactions. This
Section 6.8 may not be amended without the consent of NBPCo so long as NBPCo or
its Affiliates own or control Units of the Company.

6.9    Agreement Regarding NBPCo Waiver of Right of Set-off. Each of NBPCo and
the Company hereby irrevocably waives any right to offset any payment due or
claimed to be due to such party under any agreement entered into between them
against any amounts that are due or claimed to be due by the other party under
any other such agreement. This Section 6.9 may not be amended without the
consent of NBPCo, so long as NBPCo or its Affiliates own or control Units of the
Company.

6.10    Contracts with Managers or their Affiliates. No contract or transaction
between the Company and a Manager or one of its Affiliates, or between the
Company and any other entity in which a Manager or one of its Affiliates has a
material financial interest, shall be void or voidable solely for this reason,
or solely because the Manager is present at or participates in the Board of
Managers meeting at which the contract or transaction is authorized or votes to
authorize such contract or transaction, if: (a) the material facts of such
Manager’s material financial interest are disclosed to the Board of Managers;
and (b) the contract or transaction is otherwise permitted, authorized or
approved in accordance with this Agreement. The presence of the interested
Manager may be counted in determining both the presence of a quorum at any such
meeting at which the contract or transaction is authorized and the vote with
respect thereto.

6.11    Member Compensation; Expenses; Loans.

(a)    Except as otherwise provided in a written agreement approved by the Board
of Managers and with Member Consent, no Member shall receive any salary, fee, or
draw for services rendered to or on behalf of the Company. Except as otherwise
approved, permitted or contemplated by or pursuant to a policy approved by the
Board of Managers and Member Consent, no Member shall be reimbursed for any
expenses incurred by such Member on behalf of the Company.

(b)    Subject to Sections 6.6 and 7.4.2, any Member or Affiliate may, to the
extent authorized by the Board of Managers and not prohibited by the Credit
Documents, lend or advance money to the Company. If any Member or Affiliate
shall make any such permitted loan or loans to the Company or advance money on
its behalf, the amount of any such loan or advance shall not be treated as a
contribution to the capital of the Company but shall be a debt due from the
Company and shall be repayable out of the Company’s cash. None of the Members or
their Affiliates shall be obligated to make any loan or advance to the Company.

 

7.

DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF THE
BOARD OF MANAGERS

7.1      Board of Managers. The business of the Company shall be managed by the
Board of Managers. As of the Effective Date, the Board of Managers shall consist
of the individuals set forth in Section 7.2. Thereafter, the individuals
constituting the Board of Managers shall be designated by the Members in
accordance with the provisions of Section 7.3. Decisions of the

 

27

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Board of Managers shall be decisions of the Company’s “manager” for all purposes
of the Act and shall be carried out by officers or agents of the Company
designated by the Board of Managers in the resolution in question or in one or
more standing resolutions or with the power and authority to do so under
Article 8.

A decision of the Board of Managers may be amended, modified or repealed in the
same manner in which it was adopted or in accordance with the procedures set
forth in this Article 7 as then in effect, but no such amendment, modification
or repeal shall affect any Person who has been furnished a copy of the original
resolution, certified by a duly authorized officer of the Company, until such
Person has been notified in writing of such amendment, modification or repeal.

7.2    Managers. The Managers of the Company comprising the Board of Managers as
of the Effective Date, who shall serve for such terms and in such manner as
prescribed by this Article 7, are the following Persons:2

 

      

Manager Name

 

  

Address

 

  

Designated By

 

1.       

[Marfrig designee] (Chairman)

 

  

[●]

  

NBM

2.       

[Marfrig designee]

 

  

[●]

  

NBM

3.       

[Marfrig designee]

 

  

[●]

  

NBM

4.       

[Marfrig designee]

 

  

[●]

  

NBM

5.       

[Marfrig designee]

 

  

[●]

  

NBM

6.       

[Leucadia designee]

 

  

[●]

  

Leucadia

7.       

[Leucadia designee]

 

  

[●]

  

Leucadia

8.       

Stanley Linville

 

  

12200 N. Ambassador Dr.

Kansas City, MO 64163

 

  

USPB

9.       

Timothy M. Klein

  

10217 Hwy 92

Kearney, MO 64060

 

  

CEO

7.3    Number and Designation Rights.

 

 

2 Note to Draft: Manager names and addresses will be inserted prior to execution
of this Agreement.

 

28

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(a)    The Board of Managers shall consist of up to nine Managers, to be
appointed as follows:

(i)    Leucadia, for so long as Leucadia and its Affiliates hold the Requisite
Percentage, shall have the right to designate two Managers (each such Manager, a
“Leucadia Manager”).

(ii)    USPB, until the earliest to occur of (A) USPB ceasing to own at least
1,068 Units and (B) the date on which the Cattle Agreement Trigger occurs, shall
have the right to designate one Manager.

(iii)    NBM shall have the right to designate five Managers (each, an “NBM
Manager”).

(iv)    The Chief Executive Officer of the Company shall be a Manager.

(b)    Other than with respect to the Managers set forth in Section 7.2, if it
is necessary pursuant to this Article 7 to appoint additional or replacement
Managers, each Member specified to so designate one or more Manager(s) pursuant
to Section 7.3(a) shall designate its Manager(s) by delivering to the Company a
written statement designating its Manager(s) and setting forth the respective
business address and telephone number of each such Manager. The Members, by
signing this Agreement, hereby agree to the designation of the Persons
identified above in Section 7.2 hereto as Managers until their successors are
designated in accordance with this Article 7, each such Manager, being deemed
designated by the Member set forth opposite such Manager indicated above. A
Manager need not be a Member.

7.4    Voting and Act of the Board of Managers; Actions Requiring Leucadia
Consent; Action without a Meeting.

7.4.1    Subject to Section 7.4.2, each Manager shall have one vote on any
matter before the Board of Managers, and any such matter shall be decided by the
Board of Managers by the affirmative vote of a majority of the Managers present
at a duly held meeting at which a quorum is present, and references in this
Agreement to actions by the Board of Managers shall be read accordingly. There
shall be no requirement that any action of the Board of Managers be approved by
the Managers elected or appointed by a certain group of Members.

7.4.2    Notwithstanding Section 7.4.1, the approval of any of the matters set
out on Exhibit B shall require (a) the affirmative vote of a majority of the
Managers present at a duly held meeting at which a quorum is present, (b) for so
long as Leucadia owns the Requisite Percentage, the approval by Leucadia in its
capacity as a Member, and (c) the approval by NBM in its capacity as a Member.
When requested by the Board of Managers pursuant to this Section 7.4.2, each of
Leucadia and NBM shall, within five Business Days of receipt of such request,
provide written notice to the Board of Managers of its determination to consent
or not consent to the actions for which such consent is required pursuant to
Exhibit B.

 

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7.4.3    Any action required or permitted to be taken at a meeting of the Board
of Managers may be taken by unanimous written action signed by all of the
Managers comprising the Board of Managers and such writing or writings shall be
filed with the records of the meetings of the Board of Managers. Such consent
shall be treated for all purposes as the act of the Board of Managers. For the
avoidance of doubt, the vote required for a written action pursuant to this
Section 7.4.3 shall not affect the vote required for an action to be taken at a
meeting of the Board of Managers pursuant to Section 7.4.1.

7.5    Tenure. Except as otherwise provided by law or by this Agreement, each
Manager shall remain in office until such Manager dies, resigns, or is removed
by the Member designating such Manager.

7.6    Resignation. Any Manager may resign at any time. Such resignation shall
be made in writing and shall take effect at the time specified therein or, if no
time be specified then at the time of its receipt by the President or the
Secretary of the Company. The acceptance of a resignation shall not be necessary
to make it effective, unless expressly so provided in the resignation.

7.7    Removal. A Manager may be replaced or removed at any time by the Member
designating such Manager, and may only be removed in accordance with this
Section 7.7.

7.8    Vacancies. Any vacancy occurring on the Board of Managers shall be filled
by the Member designating such Manager having the right to elect or appoint such
Manager. The Board of Managers shall have and may exercise all their powers
notwithstanding the existence of one or more vacancies in their number, subject
to any requirements of law or of this Agreement as to the number of Managers
required for a quorum or for any vote or other action; provided, however, that
the Board of Managers may not take any action without first giving a Member able
to designate a Manager to fill a vacancy at least 48 hours to fill such vacancy.

7.9    Meetings. Regular meetings of the Board of Managers shall be held from
time to time as determined by the Board of Managers. Special meetings of the
Board of Managers shall be held upon the call of the Chairman of the Board of
Managers, the Chief Executive Officer or any Manager designated by NBM. Board of
Managers meetings shall be held at the principal office of the Company or at
such other place, either within or without the State of Delaware, as shall be
designated by the person calling the meeting and stated in the notice of the
meeting. Managers may participate in a Board of Managers meeting by means of
video or audio conferencing or similar communications equipment whereby all
Managers participating in the meeting can hear each other.

7.10    Notice. Notice of each meeting of the Board of Managers, in writing or
by electronic mail, stating the place, day and hour of the meeting, shall be
given to each Manager at least 48 hours before the time at which the meeting is
to be held. The notice or waiver of notice of any special or regular meeting of
the Board of Managers does not need to specify the business to be transacted or
the purpose of the meeting.

7.11    Waiver. Whenever any notice is required to be given to a Manager under
the provisions of this Agreement, a waiver thereof in writing signed by the
Manager, whether before

 

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or after the time stated therein, shall be deemed equivalent to the giving of
such notice. Attendance of a Manager at any meeting of the Board of Managers
shall constitute waiver of notice of such meeting by the Manager, except where
the Manager attends a meeting for the express purpose of stating its objection
to the transaction of any business because the meeting is not lawfully called or
convened.

7.12    Quorum; Attendance by Proxy.

 7.12.1    Attendance by all of the NBM Managers and, for so long as Leucadia
owns the Requisite Percentage, by at least one Leucadia Manager, shall
constitute a quorum necessary for the transaction of business at any regular or
special meeting of the Board of Managers; provided that where the attendance of
a Leucadia Manager or the NBM Managers is required pursuant to the preceding
clause and two consecutive duly-called meetings of the Board of Managers are
adjourned due to failure to achieve a quorum as a result of the non-attendance
of a Leucadia Manager or the NBM Managers, as applicable, such meeting shall be
re-convened again upon two Business Days’ notice to the Managers, and the
presence of a Leucadia Manager or all of the NBM Managers, as applicable, shall
not be required to constitute a quorum at such third duly-called meeting. If
less than a quorum is present, those Managers present may adjourn the meeting
from time to time until a quorum shall be present.

 7.12.2    Any NBM Manager or Leucadia Manager may designate another NBM Manager
or Leucadia Manager, respectively, as his or her proxy to attend a Board of
Managers meeting (the Manager giving such proxy being a “Proxy Manager”). Any
such Proxy Manager shall be counted as present at such Board of Managers meeting
for all purposes under this Agreement, and the vote of such Proxy Manager shall
be deemed given by the Manager designated as the receiver of any such proxy as
if the Proxy Manager had himself or herself attended such meeting and cast his
or her vote in person.

7.13    Compensation. Unless otherwise unanimously approved by the Board of
Managers, Managers who are not employees of the Company shall not be compensated
for serving as Managers; provided that in the event that a Member designates as
a Manager an unrelated third-party (including as to the Member designating such
Manager) to serve as one of its Managers, the Board of Managers may determine to
compensate such Manager for serving as a Manager up to an aggregate compensation
level not to exceed $100,000 per year. Managers shall be entitled to
reimbursement for reasonable expenses incurred in attending meetings of the
Board of Managers.

7.14    Authority of Board of Managers. Subject to the provisions of this
Agreement that require the consent or approval of one or more Members, the Board
of Managers shall have the exclusive power and authority to manage the business
and affairs of the Company and to make all decisions with respect thereto.
Except as otherwise expressly provided in this Agreement, the Board of Managers
or Persons designated by the Board of Managers, including officers and agents
appointed by the Board of Managers, shall be the only Persons authorized to
execute documents which shall be binding on the Company. To the fullest extent
permitted by the Act, but subject to any specific provisions hereof granting
rights to Members, the Board of Managers shall have the power to perform any
acts, statutory or otherwise, with respect to the Company or this Agreement,
which would otherwise be possessed by the Members under the Act, and the Members
shall have

 

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no power whatsoever with respect to the management of the business and affairs
of the Company. All decisions and other matters concerning the computation and
allocation of items of income, gain, loss, deduction, and credit among the
Members, and accounting procedures not specifically and expressly provided for
by the terms of this Agreement, shall be determined by the Board of Managers in
good faith. Any determination made pursuant to this Section 7.14 by the Board of
Managers shall be conclusive and binding on all Members, but subject to written
objection and legal action challenging the decision based on lack of good faith.
The power and authority granted to the Board of Managers shall include all those
necessary, convenient or incidental for the accomplishment of the purposes of
the Company and shall include the power to make all decisions with regard to the
management, operations, assets, financing and capitalization of the Company,
including without limitation, the power and authority to undertake and make
decisions concerning (in each case subject to the terms, conditions, and special
approval requirement of this Agreement): (a) hiring and firing employees,
attorneys, accountants, brokers, investment bankers and other advisors and
consultants, (b) entering into leases for real or personal property, (c) opening
bank and other deposit accounts and operations thereunder, (d) purchasing,
constructing, improving, developing and maintaining real property,
(e) purchasing insurance, goods, supplies, equipment, materials and other
personal property, (f) borrowing money, obtaining credit, issuing notes,
debentures, securities, equity or other interests of or in the Company and
securing the obligations undertaken in connection therewith with mortgages on,
pledges of and security interests in all or any portion of the real or personal
property of the Company, (g) making investments in or the acquisition of
securities of any Person, (h) giving guarantees and indemnities, (i) entering
into contracts or agreements, whether in the ordinary course of business or
otherwise, (j) mergers with or acquisitions of other Persons, (k) dissolution,
(l) the sale or lease of all or any portion of the assets of the Company,
(m) forming subsidiaries or joint ventures, (n) compromising, arbitrating,
adjusting and litigating claims in favor of or against the Company and (o) all
other acts or activities necessary, convenient or incidental for the
accomplishment of the purposes of the Company including any and all actions that
the Company may take as described in Section 2.6.

7.15    Reliance by Third Parties. Any person or entity dealing with the Company
or the Members may rely upon a certificate signed by a Manager as to: (a) the
identity of the Members, (b) the existence or non-existence of any fact or facts
which constitute a condition precedent to acts by Members or are in any other
manner germane to the affairs of the Company, (c) the Persons which are
authorized to execute and deliver any instrument or document of or on behalf of
the Company, (d) the authorization of any action by or on behalf of the Company
by the Board of Managers or any officer or agent acting on behalf of the Company
or (e) any act or failure to act by the Company or as to any other matter
whatsoever involving the Company or the Members.

 

8.

DESIGNATION, RIGHTS, AUTHORITIES, POWERS, RESPONSIBILITIES AND DUTIES OF
OFFICERS AND AGENTS

8.1    Officers, Agents. The Board of Managers by vote or resolution shall have
the power to appoint officers and agents to act for the Company with such
titles, if any, as the Board of Managers deems appropriate and to delegate to
such officers or agents such of the powers as are granted to the Board of
Managers hereunder, including the power to execute documents on behalf of the
Company, as the Board of Managers may in its sole discretion determine;
provided, however, that no such delegation by the of Managers shall cause the
Persons constituting the Board of Managers to cease to be the “managers” of the
Company within the meaning of the Act. The

 

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officers so appointed may include persons holding titles such as Chairman, Chief
Executive Officer, President, Chief Financial Officer, Executive Vice President,
Chief Accounting Officer, Vice President, and Secretary. Unless the authority of
the officer in question is limited or specified in the document appointing such
officer or in such officer’s employment agreement or is otherwise specified or
limited by the Board of Managers, any officer so appointed shall have the same
authority to act for the Company as a corresponding officer of a Delaware
corporation would have to act for a Delaware corporation in the absence of a
specific delegation of authority and as more specifically set forth in this
Article 8; provided, however, that without the required consents pursuant to
Sections 6.6 and 7.4.2 no officer shall take any action for which the consent of
certain Members is required thereunder; and provided, further, that without the
required consent pursuant to Section 8.10, no officer shall take any action for
which consent is required thereunder.

8.2    Election. Officers may be elected by the Board of Managers at any time.
At any time or from time to time the Board of Managers may delegate to any
officer their power to elect or appoint any other officer or any agents.
Officers must be natural persons.

8.3    Tenure. Each officer shall hold office until its respective successor is
chosen and qualified unless a different period shall have been specified by the
terms of its election or appointment, or in each case until he or she sooner
dies, resigns, is removed or becomes disqualified. Each agent shall retain its
authority at the pleasure of the Board of Managers, or the officer by whom he or
she was appointed or by the officer who then holds agent appointive power.

8.4    Chairman of the Board of Managers, Chief Executive Officer, President and
Vice President. The Chairman of the Board of Managers, if any, shall be selected
by NBM for so long as NBM remains a Member and shall not be an officer of the
Company and shall instead have such duties and powers as shall be designated
from time to time by the Board of Managers. Subject to the terms and conditions
of this Agreement, the Chief Executive Officer shall have direct and general
charge and supervision of all business and administrative operations of the
Company and all other such duties, responsibilities authority and privileges as
are set forth in his employment agreement, if any, as amended from time to time,
in addition to those duties, responsibilities, authority and privileges as are
delegated to him by the Board of Managers or that a Chief Executive Officer of a
Delaware corporation would have in respect of a Delaware corporation in the
absence of a specific delegation of such duties, responsibility, authority and
privileges. The Chief Executive Officer shall also perform such other duties
that may be assigned by the Board of Managers to the extent consistent with this
Agreement and his employment agreement, if any, as amended from time to time.
The President and any Vice Presidents, if any, shall have duties as shall be
designated from time to time by the Chief Executive Officer or by the Board of
Managers.

8.5    Chief Financial Officer. Unless the Board of Managers otherwise
specifies, the Chief Financial Officer of the Company shall be in charge of its
funds and valuable papers, its books of account and accounting records, and of
its accounting procedures and shall have such other duties and powers as may be
designated from time to time by the Chief Executive Officer or the Board of
Managers.

8.6    Secretary and Assistant Secretaries. The Secretary shall record all
proceedings of the Members and the Board of Managers in a book or series of
books to be kept therefor and shall file therein all actions by written consent
of the Board of Managers. In the absence of the Secretary

 

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from any meeting, an Assistant Secretary, or if no Assistant Secretary is
present, a temporary secretary chosen at the meeting, shall record the
proceedings thereof. The Secretary shall keep or cause to be kept records, which
shall contain the names and record addresses of all Members. The Secretary shall
have such other duties and powers as may from time to time be designated by the
Board of Managers, the Chair of the Board of Managers or the Chief Executive
Officer. Any Assistant Secretaries shall have such duties and powers as shall be
designated from time to time by the Board of Managers, the Chair of the Board of
Managers, the Chief Executive Officer or the Secretary.

8.7      Vacancies. If the office of any officer becomes vacant, the Board of
Managers may choose a successor. Each such successor shall hold office for the
unexpired term, and until its successor is chosen and qualified or in each case
until he or she sooner dies, resigns, is removed or becomes disqualified.

8.8      Resignation and Removal. Subject to the terms of any applicable
employment agreement of an officer, the Board of Managers may at any time remove
any officer either with or without cause. The Board of Managers may at any time
terminate or modify the authority of any agent. Any officer may resign at any
time by delivering its resignation in writing to the Chairman of the Board of
Managers, the Chief Executive Officer or the Secretary or to a meeting of the
Board of Managers. Such resignation shall be effective upon receipt unless
specified to be effective at some other time, and without in either case the
necessity of its being accepted unless the resignation shall so state.

8.9      Compensation. Officers shall receive such compensation as may be
determined from time to time by resolution of the Board of Managers or as
otherwise provided in a written employment agreement.

8.10    Certain Actions Requiring Board of Managers Consent. Notwithstanding any
delegation of the Board of Managers’ authority to any officer pursuant to the
foregoing provisions of this Article 8 and notwithstanding any other provision
of this Agreement or any employment agreement between such officer and the
Company, the power to take the following actions shall be vested exclusively in
the Managers (subject to Sections 6.6 and 7.4.2), unless the Board of Managers
gives its express prior consent thereto:

(a)    Entering into any contract, agreement or arrangement with any Person
(including with accountants, investment bankers or consultants) where the
aggregate expenditure of the Company with respect to any such Person in any
Fiscal Year will or is reasonably likely to exceed $1,000,000, excluding those
expenditures in the ordinary course of business or that are contemplated in the
annual budget approved by the Board of Managers.

(b)    Entering into any agreement for the borrowing of money (whether in the
public or private markets), obtaining credit (other than trade credit in the
normal course of business) or amending in any material respect any of the terms
and conditions of any of the Credit Documents.

(c)    Issuances of additional Units of the Company.

 

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(d)    Securing any obligations of the Company with any of its assets.

(e)    Distributions of cash (or other Company assets) to Members.

(f)    Acquisitions, disposals or sales of properties or assets (whether
effected by merger, sale of assets, lease or equity exchange or otherwise),
other than in the ordinary course of business or as contemplated in the annual
budget approved by the Board of Managers, and other than in any transaction
involving less than $1,000,000.

(g)    Adoption of or changes in the annual budgets which shall be prepared by
the officers of the Company in detail reasonably satisfactory to, and approved
by, the Board of Managers, and which shall be consistent with the format used by
the Company for preparation of its annual and quarterly financial statements.

(h)    Making unbudgeted expenditures of $1,000,000 or more in any Fiscal Year.

(i)    Approval of any Succession Plan or changes or amendments of the
Succession Plan.

(j)    Hiring, firing, promotion or demotion of any officer on the Senior
Management Team or the Chief Financial Officer.

(k)    Termination and hiring of general legal counsel for the Company and the
hiring of special legal counsel.

(l)    Approval of the Company’s expense reimbursement policies, to the extent
relating to members of the Senior Management Team, and the Company’s currency or
securities hedging and insurance policies.

(m)    The formation of or investment in any Subsidiaries and any agreements
relating thereto, including without limitation any agreements with joint
venturers, partners or co-investors.

(n)    The approval of any employment (or similar) contract or agreement under
which the obligations of the Company exceed (or are expected to exceed)
$1,000,000 over the term of such contract or agreement or exceed (or are
expected to exceed) $333,333 in any Fiscal Year.

(o)    Initiating, revising or eliminating any management bonus program.

(p)    Making any material public announcement outside the normal course of
business, unless the making of such public announcement is: (i) necessary to
prevent a material adverse effect on the business of the Company or is otherwise
required by applicable law; or (ii) deemed necessary and appropriate by the
Senior Management Team to avoid an imminent public health danger.

 

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(q)    Approving all new sites for office space, plants or other operations and
of associated capital expenditures, other than those contemplated in the annual
budget approved by the Board of Managers.

(r)    Indemnifying any officer, manager, employee or agent of the Company or
its Subsidiaries on behalf of the Company or its Subsidiaries.

(s)    Initiating or settling any litigation where the resulting loss or damage
(plus any costs, including attorneys’ fees) will or could reasonably be
anticipated to exceed $1,000,000.

 

9.

BOOKS, RECORDS, ACCOUNTING AND REPORTS

9.1      Books and Records. The books and records of the Company shall reflect
all the Company’s transactions and shall be appropriate and adequate for the
Company’s business. The Company shall maintain at its principal office or such
other office as the Board of Managers shall determine all of the following:

(a)    A current list of the full name and last known business or residential
address of each Member and Manager;

(b)    information regarding the amount of cash and a description and statement
of the agreed value of any other property or services contributed by each Member
and which each Member has agreed to contribute in the future, and the date on
which each Member became a Member of the Company;

(c)    A copy of the Certificate of Formation and this Agreement, including any
amendments to either thereof, together with executed copies of any powers of
attorney pursuant to which the Certificate of Formation, this Agreement or any
amendments have been executed;

(d)    Copies of the Company’s federal, state and local income tax or
information returns and reports;

(e)    The audited financial statements of the Company; and

(f)    The Company’s books and records.

9.2      Delivery to Member, Inspection; etc. Upon the request of any Member for
any purpose reasonably related to such Member’s Interest, the Board of Managers
shall allow the Member and its designated representatives or agents, upon at
least two Business Days prior written notice to the Board of Managers and during
reasonable business hours, to examine the Company’s books and records for such
purpose at the Member’s sole cost and expense. A Member requesting such an
examination of the Company’s books and records may also request, and the Board
of Managers shall endeavor to cause, that Managers, members of the Senior
Management Team, and the independent certified public accountants for the
Company be made available to discuss such books and records. In addition, each
Member shall have the right to obtain from the Company such other information
regarding the Company’s affairs and financial condition as is just and

 

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reasonable. The foregoing rights shall be subject to Section 9.6 and to such
reasonable standards as may be established by the Board of Managers from time to
time. Notwithstanding anything to the contrary herein, information obtained in
connection with this Section 9.2 shall be deemed Confidential Information and
not be used in competition with the Company. The rights and privileges set forth
in this Section 9.2 shall not apply (a) to a Member whose Governance Rights have
terminated pursuant to Section 3.5 hereof, (b) to any assignee of a Member
except to the extent required by the Act, (c) in any event to any Member who is
employed by, retained by, Affiliated with or Controlled by a Competing Business
at the time of request or examination, or (d) in the event that the provision of
such information gives rise to or would reasonably be expected to give rise to
U.S. Securities and Exchange Commission reporting obligations.

9.3      Accounting; Fiscal Year. The Company shall use the accrual method of
accounting in preparing its financial reports and for tax purposes and shall
keep its books and records accordingly. The Board of Managers may, without any
further consent of the Members (except as specifically required by the Code),
apply for IRS consent to, and otherwise effect a change in, the Company’s Fiscal
Year.

9.4      Reports.

(a)      In General. The Chief Financial Officer of the Company shall be
responsible for causing the preparation of financial reports of the Company and
the coordination of financial matters of the Company with the Company’s
accountants.

(b)      Periodic and Financial Reports. The Company shall maintain and provide
to each Member upon request, the financial statements listed in clauses (i) and
(ii) below, prepared, in each case (other than Capital Contributions, profits
and losses and other allocations, distributions and Capital Accounts with
respect to Member’s Capital Accounts, which shall construed, determined and
reported to Members in accordance with this Agreement) in accordance with GAAP.

(i)    As soon as practicable following the end of each Fiscal Year (and in any
event within the time frame required by Leucadia for its reporting processes),
an unaudited balance sheet of the Company as of the end of such Fiscal Year and
the related statements of operations and cash flows for such Fiscal Year. As
soon as practicable following the end of each Fiscal Year (and in any event
within the time frame required by Leucadia for its reporting processes), a
balance sheet of the Company as of the end of such Fiscal Year and the related
statements of operations, Members’ Capital Accounts and changes therein, and
cash flows for such Fiscal Year, together with appropriate notes to such
financial statements, all of which shall be audited and certified by the
Company’s accountants, and in each case, to the extent the Company was in
existence, setting forth in comparative form the corresponding figures for the
immediately preceding Fiscal Year.

(ii)    As soon as reasonably practicable following the end of each of the first
three fiscal quarters of each Fiscal Year and following the end of each of the
first 11 fiscal months of each Fiscal Year (and in any event within the time
frame required by Leucadia for its reporting processes), an unaudited balance
sheet of the

 

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Company as of the end of such fiscal quarter or fiscal month, as the case may
be, and the related unaudited statements of operations and cash flows for such
fiscal quarter or fiscal month, as the case may be, and for the Fiscal Year to
date, in each case, to the extent the Company was in existence, setting forth in
comparative form the corresponding figures for the prior Fiscal Year’s fiscal
quarter or fiscal month, as the case may be, and the fiscal quarter or fiscal
month, as the case may be, just completed.

(c)    IFRS. Notwithstanding the above, the Company shall maintain and provide
to each Member upon request (i) such data, and in such format, as may be
required to enable the Investor to prepare financial information under
International Financial Reporting Standards (“IFRS”) and (ii) a reconciliation
between GAAP and IFRS. The Company shall, upon request of any NBM Manager,
prepare or cause to be prepared annual and quarterly financial statements in
accordance with IFRS.

(d)    Other Reports. The Board of Managers shall cause to be delivered promptly
to Members such other information that is customarily provided the shareholders
or members, such as reports of adverse developments, management letters,
communications with Members of Managers, press releases and registration
statements.

9.5      Filings. At the Company’s expense, NBM shall cause all tax returns
required to be filed by the Company to be prepared and timely filed (including
extensions) with the appropriate authorities and to have prepared and to furnish
to each Member such information with respect to the Company (including without
limitation a schedule setting forth such Member’s distributive share of the
Company’s income, gain, loss, deduction and credit as determined for federal
income tax purposes) as is necessary to enable such Member to prepare such
Member’s federal, state and local income tax returns. NBM, at the Company’s
expense, shall also cause to be prepared and timely filed, with appropriate
federal and state regulatory and administrative authorities, all reports
required to be filed by the Company with those entities under then current
applicable laws, rules and regulations.

9.6      Non-Disclosure.

9.6.1    Each Member agrees that, except as otherwise consented to by the Board
of Managers, all non-public information furnished to such Member pursuant to
this Agreement or otherwise regarding the Company or its business that is not
generally available to the public (“Confidential Information”) will be kept
confidential and will not be used by such Member (or its Affiliates, agents,
representatives or employees) in competition with the Company or disclosed by
such Member, or by any of such Member’s agents, representatives or employees, in
any manner, in whole or in part, except that (a) each Member shall be permitted
to disclose such Confidential Information to those of such Member’s agents,
representatives and employees who need to be familiar with such information in
connection with such Member’s investment in the Company and who are charged with
an obligation of confidentiality, (b) each Member shall be permitted to disclose
such Confidential Information to such Member’s partners and equity holders so
long as they agree to keep such information confidential on the terms set forth
herein, (c) each Member shall be permitted to disclose Confidential Information
to the extent required

 

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by law or rules and regulations of any applicable stock exchange on which a
Member’s securities are listed or traded, so long as such Member shall have
first provided the Company a reasonable opportunity to contest the necessity of
disclosing such information, and (d) each Member shall be permitted to disclose
Confidential Information to the extent necessary for the enforcement of any
right of such Member arising under this Agreement. Notwithstanding the
foregoing, each Member (and each employee, representative or other agent of the
Member) may disclose to any and all Persons, without limitation of any kind, the
tax treatment and tax structure of the transaction and all materials of any kind
(including opinions or other tax analyses) that are provided to the Member
relating to such tax treatment and tax structure.

9.6.2    Each Member agrees that it shall be liable for any breach or violation
of the provisions of Section 9.6.1 by any Person to whom such Member provides
Confidential Information (other than the Company). The covenants and
undertakings contained in Section 9.6.1 relate to matters which are of a
special, unique and extraordinary character and a violation of any of the terms
of Section 9.6.1 will cause irreparable injury to the Company, the amount of
which will be impossible to estimate or determine and which cannot be adequately
compensated. Accordingly, the remedy at law for any breach of Section 9.6.1 may
be inadequate. Therefore, notwithstanding anything to the contrary, the Company
shall be entitled to an injunction, restraining order or other equitable relief
from any court of competent jurisdiction in the event of any breach of any
provision of Section 9.6.1 without the necessity of proving actual damages or
posting any bond whatsoever. The rights and remedies provided by Section 9.6.1
are cumulative and in addition to any other rights and remedies which the
Company may have hereunder or at law or in equity.

9.6.3    Each Member is aware that (i) Leucadia is an “issuer” of securities
under United States securities laws and NBM Ultimate Parent is an “issuer” of
securities under Brazilian securities laws and (ii) that United States and
Brazilian securities laws prohibit any individual who has received from an
issuer or any of its Affiliates (including the Company) any material, non-public
information regarding such issuer or any of its Affiliates from purchasing or
selling securities of such issuer or from communicating such information to any
other individual under circumstances in which it is reasonably foreseeable that
such individual is likely to purchase or sell securities of such issuer. As a
consequence of its respective investments in the Company, each Member will from
time to time receive confidential information concerning the Company that will
constitute material, non-public information concerning Leucadia and NBM Ultimate
Parent. Each Member acknowledges this prohibition and agrees to advise its
respective Affiliates of this prohibition.

9.7      Restrictions on Receipt. The rights of Members to receive reports or to
request information pursuant to this Article 9 shall be subject to Section 3.5.

 

10.

TAX MATTERS

10.1    Tax Matters Member. The provisions of this Section 10.1 shall apply for
and with respect to taxable years ending on or prior to December 31, 2017, and
all references to the “Code”

 

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herein are as the Code in effect prior to amendment by the Bipartisan Budget Act
of 2015 (and any similar provision under state or local law).

10.1.1    Leucadia shall designate a qualifying Member to act as the tax matters
partner of the Company (the “Tax Matters Member”) as defined in
Section 6231(a)(7) of the Code. The Tax Matters Member will represent the
Company in any audits, disputes or controversies or proceedings under the TEFRA
Rules; provided, however, that the Tax Matters Member shall keep the Board of
Managers informed as to all material developments with respect to such audits,
disputes or controversies and shall not have any right to settle or compromise
any such audits, disputes, controversies or proceedings without approval of the
Board of Managers. The Tax Matters Member shall (a) furnish to each Member
affected by an audit of Company income tax returns a copy of each notice or
other communication received from the IRS or applicable state authority and
(b) keep such Members informed of any administrative or judicial proceeding, as
required by Section 6223(g) of the Code.

10.1.2    The Company shall not be obligated to pay any fees or other
compensation to the Tax Matters Member in its capacity as such. However, the
Company shall reimburse the reasonable expenses (including reasonable outside
attorneys’ and other reasonable outside professional fees, and allocated
overhead and internal costs) incurred by the Tax Matters Member in such
capacity. The cost of any resulting audits or adjustments of a Member’s tax
return shall be borne solely by the affected Member.

10.1.3    The Company shall indemnify and hold harmless the Tax Matters Member
from and against any loss, liability, damage, cost or expense (including
reasonable attorneys’ and accountants’ fees) sustained or incurred as a result
of any act or decision concerning Company tax matters and within the scope of
such Member’s responsibilities as Tax Matters Member, so long as such act or
decision was not the result of gross negligence, fraud or willful misconduct by
the Tax Matters Member. The Tax Matters Member shall be entitled to rely on the
advice of outside legal counsel and accountants as to the nature and scope of
its responsibilities and authority as Tax Matters Member, and any act or
omission of the Tax Matters Member pursuant to such advice in no event shall
subject the Tax Matters Member to liability to the Company or any Member, unless
such act or omission pursuant to such advice is as a result of gross negligence,
fraud or willful misconduct by the Tax Matters Member.

10.2    Partnership Representative. The provisions of this Section 10.2 shall
apply for and with respect to taxable years beginning after December 31, 2017,
and all references to the “Code” herein are as amended by the Bipartisan Budget
Act of 2015 (or any successor thereto and any similar provision under state or
local law).

10.2.1    Partnership Representative. NBM (or, if NBM no longer has the right to
designate a majority of the Managers, the Board of Managers) shall designate the
Company’s partnership representative (the “Partnership Representative”) under
Section 6223 of the Code (which may be NBM or any other person designated by NBM
or the Board of Managers, as applicable). Each Member hereby consents to such
designation and agrees that, upon the request of NBM, it will execute, certify,
acknowledge, deliver, swear

 

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to, file and record at the appropriate public offices such documents as may be
necessary or appropriate to evidence such consent. The Partnership
Representative shall be promptly reimbursed for all reasonable expenses
(including reasonable outside attorneys’ and other reasonable outside
professional fees, and allocated overhead and internal costs) incurred by it in
connection with service as Partnership Representative (as applicable) to the
extent such reimbursement is not prohibited by applicable law. Nothing herein
shall be construed to restrict NBM from causing the Company to engage an
accounting firm or legal counsel to assist the Partnership Representative in
discharging its duties hereunder. The Partnership Representative will represent
the Company in any audits, disputes, controversies or proceedings under the
Partnership Tax Audit Rules; provided, however, that the Partnership
Representative shall keep the Board of Managers informed as to all material
developments with respect to such audits, disputes or controversies and shall
not have any right to settle or compromise any such audits, disputes,
controversies or proceedings without approval of the Board of Managers. The
Company and the Partnership Representative shall keep the Members informed of
any inquiries, audits, other proceedings or tax deficiencies assessed or
proposed to be assessed (of which the Company or Partnership Representative is
actually aware) by any taxing authority against the Company or the Members.

10.2.2    Election Out of Partnership Audit Procedures. So long as the Company
satisfies the provisions of Sections 6221(b)(1)(B) through (D), the Partnership
Representative, with the approval of the Board of Managers, may cause the
Company to make the election set forth in Section 6221(b)(1) of the Code so that
the Partnership Tax Audit Rules shall not apply to the Company. If such election
is made, the Partnership Representative shall provide the proper notice to each
Member in accordance with Section 6221(b)(1)(E).

10.2.3    Partnership Level Assessments. Provided the election described in
Section 10.2.2 is not in effect, in the case of any adjustment by the IRS in the
amount of any item of income, gain, loss, deduction, or credit of the Company or
any Member’s distributive share thereof (“IRS Adjustment”), the Partnership
Representative, acting at the direction of NBM or the Board of Managers, as
applicable, shall respond to such IRS Adjustment in accordance with either
10.2.3(a) or (b).

(a)    In accordance with Section 6225 of the Code, the Partnership
Representative may cause the Company to pay any Imputed Tax Underpayment imposed
in the Adjustment Year. The Partnership Representative shall use reasonable
efforts to pursue available procedures to reduce any Imputed Tax Underpayment on
account of any Member’s tax status.

(b)    Alternatively, the Partnership Representative may elect under
Section 6226 of the Code to cause the Company to issue adjusted IRS Schedules
“K-1” (or such other form as applicable) reflecting a Member’s shares of any IRS
Adjustment for the Adjustment Year.

(c)    In connection with any decision by the Partnership Representative, acting
at the direction of the Board of Managers, regarding whether to make the
election described

 

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in Section 6226 of the Code pursuant to this Section 10.2.3(b), the Partnership
Representative shall use commercially reasonable efforts to take into
consideration the relative costs and the tax consequences to the Company and the
Members of making or not making such election. If the Partnership Representative
determines not to make the election described in Section 6226 of the Code, the
Partnership Representative will use commercially reasonable efforts to (i) take
into account the tax status of each Member, when determining the amount of the
Company’s Imputed Tax Underpayment that is attributable to each Member, to the
extent permitted by applicable law, and (ii) allocate such amount in such manner
that no Member will bear the economic burden of any Imputed Tax Underpayment
that is not attributable to such Member to the extent practicable. For purposes
of the preceding sentence, the Partnership Representative shall use commercially
reasonable efforts to take into account amended tax returns timely filed by each
Member, as described in Section 6225(c)(2) of the Code, to the extent permitted
by applicable law, and the Partnership Representative shall use commercially
reasonable efforts to furnish to each Member, in a timely manner and to the
extent reasonably available to the Partnership Representative, such information
as such Member may reasonably request to prepare such amended tax returns to the
extent practicable.

(d)    Each Member agrees to (i) treat each item of income, gain, loss,
deduction, or credit attributable to the Company in a manner which is consistent
with the treatment of such item on the tax returns of the Company and
(ii) provide the Company and the Partnership Representative with any
information, documentation, or certification that the Company or Partnership
Representative reasonably requests in connection with an audit, dispute,
controversy or other tax proceeding relating to the Company, including any
information or certifications that may be necessary for the Partnership
Representative to reduce Imputed Tax Underpayment or make an election under
Section 6226 of the Code.

10.2.4    Indemnification for Partnership Adjustments. Each Member hereby agrees
to indemnify and hold harmless the Company, the Board of Managers, the
Partnership Representative (including NBM in its capacity as such) or any of
their respective Affiliates, or any of their respective officers, directors,
employees, managers, members and, as determined by the Board of Managers in its
sole and absolute discretion, consultants or agents, from and against any
liability, cost, penalty, interest or expense (including, but not limited to,
legal and accounting fees) with respect to any Imputed Tax Underpayment or other
IRS Adjustment, regardless of whether such Member is a Member of the Company in
an Adjustment Year, with such proportionate share as reasonably determined by
the Board of Managers, including the Board of Managers’ reasonable discretion,
based on each Member’s interest in the Company in the Reviewed Year, each
Member’s tax status and a Member’s timely provision of information necessary to
reduce the amount of Imputed Tax Underpayment set forth in Section 6225(c) of
the Code. A Member’s reimbursement obligation pursuant to this Section 10.2.4
shall be effected, at the sole option of NBM or such other indemnified person,
either by (i) the Member’s immediate payment in cash to the Company or such
other indemnified person and/or (ii) the Company’s retention of amounts of
distributable cash that would otherwise be distributable to such Member (any
amount so retained shall be treated as distributed to such Member for purposes
of Section 5.2) and/or (iii) the Company’s making of the relevant payment on
behalf of such Member (any amount so paid, together with any costs and

 

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expenses incurred by the Company in relation to such payment, to be repaid by
reducing the amount of the next succeeding distribution or distributions that
would otherwise have been made to such Member or, if such distributions are not
sufficient for that purpose, by reimbursement by such Member). NBM and the
Company will be entitled to take any other action determined to be necessary or
appropriate in connection with any obligation or possible obligation to impose
withholding pursuant to any tax law or to pay any tax with respect to a Member.

10.2.5    The obligations under this Section 10.2 shall survive a Member’s
ceasing to be a Member of the Company and/or the termination, dissolution,
liquidation and winding up of the Company.

10.3    Tax Returns. Unless otherwise agreed by the Board of Managers, all
returns of the Company shall be prepared by the Company’s independent certified
tax accountants under the direction of the Board of Managers, with such returns
being prepared consistent with past practice except to the extent otherwise
required by applicable law.

10.4    Tax Elections. Subject to Section 7.4.2, NBM shall, without any further
consent of the Members being required (except as specifically required herein),
cause the Company to make any and all elections for federal, state, local, and
foreign tax purposes including, without limitation, any election, if permitted
by applicable law: (i) to make the election provided for in Code
Section 6231(a)(1)(B)(ii) (prior to amendment under to the Bipartisan Budget Act
of 2015) or take any other action necessary to cause the provisions of Code
Sections 6221 through 6231 (as amended by the Bipartisan Budget Act of 2015) to
apply to the Company (ii) to take any action necessary or appropriate to
continue the election made by the Company pursuant to Code Section 754 as in
effect on the Effective Date, including making a new or a protective Section 754
election, to ensure that such Section 754 election is and remains effective and
that the Section 754 election is not revoked without the consent of all Members,
and to adjust the basis of Property pursuant to Code Sections 734(b) and 743(b),
or comparable provisions of state, local or foreign law, in connection with
Transfers of Interests and Company distributions; (iii) to extend the statute of
limitations for assessment of tax deficiencies against the Members with respect
to adjustments to the Company’s federal, state, local or foreign tax returns;
and (iv) acting at the direction of the Board of Managers, and keeping the Board
of Managers informed as to all material developments with respect thereto, to
represent the Company and the Members before taxing authorities or courts of
competent jurisdiction in tax matters affecting the Company or the Members in
their capacities as Members (other than those matters described in Sections 10.1
and 10.2 that are represented by the Tax Matters Member or the Partnership
Representative, as applicable), and to file any tax returns and execute any
agreements or other documents relating to or affecting such tax matters,
including agreements or other documents that bind the Members with respect to
such tax matters or otherwise affect the rights of the Company and the Members.

10.5    Tax Information. Necessary tax information shall be delivered to each
Member as soon as practicable after the end of each Fiscal Year of the Company
but not later than 5 months after the end of each Fiscal Year.

 

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11.

TRANSFER OF INTERESTS

11.1    Transfer.

11.1.1    During the Lock Up Period, except for Transfers pursuant to
Section 11.2 to a Permitted Transferee, for a Permitted Financing Pledge or
pursuant to Article 12, no Member shall Transfer all or any part of its Units,
or the economic or other rights that comprise such Member’s Interest, unless
such Transfer is first approved by a majority of the Managers who were not
appointed by the Member seeking approval for such Transfer, which approval may
be granted or withheld in the sole discretion of such Managers.

11.1.2    A Minority Member may not Transfer all or any part of its Units, or
the economic or other rights that comprise such Member’s Interest, to any Named
Competitors, unless such Transfer is first approved by a majority of the
Managers who were not appointed by the Member seeking approval for such
Transfer, which approval may be granted or withheld in the sole discretion of
such Managers.

11.1.3    The Company shall maintain a record of the ownership of Units, which
shall be as set forth on Exhibit A and shall be amended from time to time to
reflect permitted Transfers of ownership of Units. Subject to restrictions on
the transferability of Units as set forth herein, Units shall be Transferred by
delivery to the Company of an instruction by the registered owner of a Unit
requesting registration of Transfer of such Units and the recording of such
Transfer in the records of the Company.

11.2    Permitted Transferees. Subject to Sections 11.3 and 11.4, a Member shall
be entitled to Transfer all or any portion of such Member’s Units to a direct or
indirect Subsidiary of such Member; provided that (a) NBM and NBM Ultimate
Parent shall also be permitted to Transfer its Units to another Subsidiary of
NBM Ultimate Parent, and (b) Leucadia shall also be permitted to Transfer its
Units to another Subsidiary of Leucadia (each such Subsidiary is referred to
herein as a “Permitted Transferee”). In no event shall all or any part of a Unit
be Transferred to a minor or incompetent except in trust or pursuant to the
Uniform Gifts to Minors Act.

11.3    Transfer Requirements. No Person to whom any of a Member’s Units are
Transferred (including a Permitted Transferee) shall be admitted to the Company
as a Member (as limited under certain circumstances in accordance with
Section 11.8) unless the following conditions are satisfied or such conditions
are waived by the Board of Managers:

(a)    a duly executed written instrument of Transfer is provided to the Board
of Managers, specifying the Units being Transferred and setting forth the
intention of the Member effecting the Transfer that the transferee succeed to a
portion or all of such Member’s Units;

(b)    an opinion of responsible counsel (who may be counsel for the Company),
reasonably satisfactory in form and substance to the Board of Managers to the
effect that:

 

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(i)    such Transfer would not violate the Securities Act or any state
securities or blue sky laws applicable to the Company or the Interest to be
Transferred;

(ii)    such Transfer would not cause the Company to be considered a publicly
traded partnership under Section 7704(b) of the Code; and

(iii)    such Transfer would not cause the Company to lose its status as a
partnership for federal income tax purposes; and

(c)    the transferee provides a statement, in form and substance reasonably
satisfactory to the Board of Managers, certifying that it has complied with its
withholding obligations under Section 1446(f) of the Code (including having
obtained an executed affidavit described in Section 1446(f)(2) of the Code from
the Member effecting the Transfer, if applicable);

(d)    the Member effecting the Transfer and the transferee, as applicable,
execute and deliver to the Board of Managers a joinder hereto, a special power
of attorney as provided in Section 18.3 and any other instruments reasonably
necessary to evidence acceptance by the transferee of this Agreement and such
transferee’s agreement to be bound by and comply with the provisions hereof; and

(e)    the Member effecting the Transfer or the transferee pays to the Company a
transfer fee in an amount sufficient to cover the reasonable expenses incurred
by the Company in connection with the admission of the transferee.

11.4    Consent. Subject to Section 11.8, each Member hereby agrees that upon
satisfaction of the terms and conditions of this Article 11 with respect to any
proposed Transfer, the Person proposed to be such transferee may be admitted as
a Member.

11.5    Withdrawal of Member. If a Member Transfers all of its Units pursuant to
Section 11.1 and the transferee of such interest is admitted as a Member
pursuant to Section 11.3 (whether or not such Member’s status is limited
pursuant to Section 11.8), such transferee shall be admitted to the Company as a
Member effective on the effective date of the Transfer or such other date as may
be specified when the transferee is admitted and, immediately following such
admission, the transferor Member shall cease to be a Member of the Company. Upon
the transferor Member’s withdrawal from the Company, the withdrawing Member
shall not be entitled to any Distributions, or any other rights associated with
an Interest in the Company, from and after the date of such withdrawal or
Transfer.

11.6    Noncomplying Transfers Void. Any Transfer in contravention of this
Article 11 shall be void ab initio and of no force or effect, and shall not bind
nor be recognized by the Company.

11.7    Amendment of Exhibit A. In the event of the admission of any transferee
as a Member of the Company, the Board of Managers shall promptly amend Exhibit A
to reflect such Transfer or admission, as the case may be, and it shall deliver
promptly to each Member a copy of such amended Exhibit A.

 

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11.8    Limited Interests. If the Interests with respect to Units held by a
Member have been limited as required by Section 3.5 and such Member shall wish
to Transfer, or shall have Transferred, Units in accordance with this
Article 11, the limitations imposed by Section 3.5 on such Interests shall be
removed only with the consent of the Board of Managers.

11.9    Permitted Financing Pledge. The Units owned by NBM or its Permitted
Transferee and all associated rights and powers may be pledged or assigned to
any lender or lenders (or an agent therefor) in a Permitted Financing Pledge as
collateral for the indebtedness, liabilities and obligations of NBM or such
Permitted Transferee to such lender or lenders, and any such pledged or assigned
Units and all associated rights and powers shall be subject to such lender’s or
lenders’ (or agent’s) rights under any collateral documentation governing or
pertaining to the Permitted Financing Pledge. The Permitted Financing Pledge
shall not, except as otherwise may result due to an exercise of rights and
remedies under such collateral documentation, cause NBM or its Permitted
Transferee to cease to be a Member or to have the power to exercise any rights
or powers of a Member and, except as provided in such collateral documentation,
such lender or lenders (and agent therefor) shall not have any liability solely
as a result of such Permitted Financing Pledge. Without limiting the generality
of the foregoing, the right of such lender or lenders (or an agent therefor) to
enforce and exercise their rights and remedies under such collateral
documentation is hereby acknowledged and, subject to compliance with the terms
and conditions of Section 11.3 of this Agreement, any such action taken in
accordance therewith shall be valid and effective for all purposes under this
Agreement, the Certificate (in each case, regardless of any restrictions or
procedures otherwise herein or therein contained) and applicable law (including
the Act), and any Transfer of the Units to or by such lender or lenders (or an
agent therefor) pursuant to any such collateral documentation in connection with
the exercise of any such lender’s or lenders’ or agent’s rights under the
Permitted Financing Pledge shall be valid and effective for all purposes,
including, without limitation, under Sections 18-702 and 18-704 of the Act, this
Agreement, the Certificate and other applicable law, to transfer all right,
title and interest (including all rights, powers, liabilities and obligations)
of NBM or its Permitted Transferee to itself or themselves or its or their owned
and controlled designee or any other Person (each an “Assignee”) in accordance
with such collateral documentation, the terms and conditions of Section 11.3 of
this Agreement and applicable law, and such Assignee shall (without further
requirements or restrictions, including under any other section of Articles 11,
12 and 13 hereof) be a Member of the Company with all rights, powers,
liabilities and obligations that NBM or its Permitted Transferee enjoyed or was
subject to prior to its exercise of its rights under the Permitted Financing
Pledge collateral documents (and, where applicable, as a “member” under the
Act); provided that all Transfers of such Units after the Transfer in which the
Assignee became a Member pursuant to the exercise of the Permitted Financing
Pledge collateral documents shall be subject to all of the terms and conditions
of this Agreement.

11.10    Member Bankruptcy Events. Any Member, or any assignee who becomes a
Member, shall not cease to be a Member upon the occurrence of any of the events
set forth in Section 18-304 of the Delaware Limited Liability Company Act (with
respect to such Member) and shall continue to be a Member until such time as
such Member’s Units are effectively Transferred.

 

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12.

RIGHT OF FIRST OFFER; TAG-ALONG RIGHTS; LIQUIDITY OPTION

12.1    Right of First Offer.

12.1.1    Following the Lock Up Period, if any Member (for purposes of this
Section 12.1, the “Selling Member”), wishes to Transfer all or any portion of
its Units, whether on its own initiative or in response to a bona fide offer
from any Person, such Selling Member shall give written notice (the “Notice of
Sale”) to NBM (if NBM is not the Selling Member) and Leucadia (if Leucadia is
not the Selling Member), with a copy in each case to the other Members, of the
Units subject to such proposed Transfer (the “Offered Units”).

12.1.2    NBM or Leucadia shall have 20 Business Days to evaluate the Offered
Units and to make an irrevocable written offer to the Selling Member to purchase
all and not less than all of the Offered Units at a specified price. The Selling
Member may elect to accept any offer made by NBM or Leucadia, to reject any
offer made by either of them; provided that it may not sell to NBM or Leucadia
if the offer of the other is for better terms, or the Selling Member may seek a
third party offer.

12.1.3    If the Selling Member seeks a third party offer, it shall have 120
days from the time of the delivery of the Notice of Sale to enter into a
definitive binding agreement, subject only to required regulatory approvals,
with a third party buyer for the Offered Units. The Selling Member may only sell
the Offered Units to a third party for a price greater than the higher price
offered by NBM or Leucadia (as applicable), and under terms and conditions
(payment conditions, representations, warranties, indemnities and holdback/
escrow) not more beneficial to such third party than those terms and conditions
offered to NBM or Leucadia (as applicable).

12.1.4    If the Selling Member does not enter into a definitive agreement to
sell the Offered Units prior to the expiration of such 120 day period, or
changes the amount of Offered Units it intends to sell, it must again comply
with the notice and offer requirements of this Section 12.1 prior to offering
the Offered Units to any third party.

12.2    Rights of First Refusal.

12.2.1    In the event that the Right of First Offer set forth in Section 12.1
is not exercised, and (a) any Minority Member wishes to Transfer all or any
portion of its Units to a Similar Competitor, or (b) NBM wishes to Transfer all
or any portion of its Units to an Insufficient Rated Party (in the case of each
of the foregoing clauses (a) and (b)), whether on its own initiative or in
response to a bona fide offer from any Person, to any Person, (for purposes of
this Section 12.2, such Transferring Member being the “Selling Member”), the
Selling Member, in addition to complying with Section 12.1, shall give written
notice (the “ROFR Notice of Sale”) to NBM (if NBM is not the Selling Member)
and/or Leucadia (if Leucadia is not the Selling Member), with a copy in each
case to the other Members, of the price and other terms and conditions of such
sale for the Units (the “ROFR Offered Units”) to a third party, and the name and
address of the proposed transferee (if applicable). The receipt of the ROFR
Notice of Sale by NBM or Leucadia, as

 

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applicable (the “ROFR Offerees”), shall constitute an offer by the Selling
Member to sell the Offered Units to the ROFR Offerees. Such offer, unless
revoked by written notice given by the Selling Member to the ROFR Offerees prior
to acceptance by ROFR Offerees shall remain outstanding for a period of
20 Business Days after receipt of the ROFR Notice of Sale by ROFR Offerees (the
“ROFR Offer Period”). The ROFR Offeree may accept such offer as to all of the
ROFR Offered Units by giving written notice to the Selling Member (with a copy
to the other Members) (a “ROFR Notice of Purchase”) of its intention to purchase
such Offered Units at the same price and on the same terms specified in the ROFR
Notice of Sale. If the Selling Member is Leucadia or a Permitted Transferee of
Leucadia, the proposed transferee is a Similar Competitor and NBM does not
exercise its right of first refusal under this Section 12.2.1, the transferee
will not assume Leucadia’s right to approve any of the matters set out on
Exhibit B pursuant to Section 7.4.2.

12.2.2    Closing. If the ROFR Offeree gives a ROFR Notice of Purchase for the
ROFR Offered Units pursuant to this Section 12.2, the closing of the purchase by
ROFR Offeree of the ROFR Offered Units shall take place as soon as reasonably
practicable and in no event later than 60 days after the date of such ROFR
Notice of Purchase or such longer period of time as may be required to obtain
final regulatory approval, which the ROFR Offeree and the Selling Member agree
to use their respective commercially reasonable efforts to obtain, at the
principal office of the Company, or at such other time and location as the
parties to such purchase may mutually determine at the same price and on terms
identical in all material respects to the terms as specified in the ROFR Notice
of Sale.

12.2.3    Transfer. If, at the close of the ROFR Offer Period, the ROFR Offeree
has not given a ROFR Notice of Purchase for all of the Offered Units, or if
payment therefor has not been made within 60 days (or such longer period of time
as authorized under Section 12.2.2) after receipt of the ROFR Notice of Purchase
(or such longer period as authorized under Section 12.2.2) from the ROFR
Offeree, the Selling Member shall have 90 days (the conclusion of such period,
the “ROFR Final Transfer Date”) in which to Transfer the ROFR Offered Units to
the purchaser specified in the ROFR Notice of Sale, if one was specified, at a
price not less than 100% of the price specified in the ROFR Notice of Sale and
on terms and conditions not materially more favorable to the transferee than the
terms and conditions specified in the ROFR Notice of Sale. If the Selling Member
is NBM or a Permitted Transferee of NBM, and the purchaser specified in the ROFR
Notice of Sale is rated BB or above by S&P or Ba2 by Moody’s, then the
Guarantees shall terminate with respect to such Units being sold and be of no
further force or effect with respect to such Units being sold following
completion of such sale.

12.2.4    New Notice of Sale Required if Reduction in Price. If (a) after the
close of the ROFR Offer Period and prior to the consummation of the Transfer
permitted by Section 12.2.3, the Selling Member wishes to Transfer the ROFR
Offered Units at a price that is lower than 100% of the price stated in the ROFR
Notice of Sale or on terms and conditions materially more favorable to the
transferee than the price and other terms and conditions contained in the ROFR
Notice of Sale or the identity of the proposed transferee shall change, or
(b) the Selling Member shall not have completed the proposed Transfer on or
before the ROFR Final Transfer Date, then the ROFR Notice of Sale shall be null
and

 

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void, and the Selling Member shall be required to separately comply with the
provisions of this Section 12.2 (including re-offering the ROFR Offered Units to
ROFR Offeree on such new terms and conditions, if applicable.)

12.2.5    Remain Subject. Units transferred pursuant to this Section 12.2 shall
remain subject to the terms of this Agreement (including this Section 12.2), and
such Transfers shall be subject to Section 11.3.

12.2.6    Right to Delegate. ROFR Offeree shall have the right to delegate all
or part of its rights and obligations pursuant to this Section 12.1 to any
Permitted Transferee or to the Company; provided, however, that in the event
that after any such delegation from ROFR Offeree to such Permitted Transferee or
the Company, such Permitted Transferee or the Company fails to perform its
obligations hereunder in accordance with the provisions of this Section 12.1,
ROFR Offeree shall be responsible to perform and complete such Permitted
Transferee’s or the Company’s obligations contained in this Section 12.2.

12.3    Tag-Along Rights.

12.3.1    Tag-Along Right. In the event of a Transfer by NBM (or its Permitted
Transferees) (a “Tag-Along Sale”) to a Person other than a Permitted Transferee
(for purposes of this Section 12.3, the “Proposed Transferee”), each Member
other than the Member initiating such Tag-Along Sale (such Member for the
purposes of this Section 12.3, the “Initiating Seller”) shall have the right
(the “Tag-Along Right”, and each Member electing to exercise its Tag-Along
Right, a “Selling Member”) to include in the Tag-Along Sale a number of Units
equal to such Selling Member’s Sale Percentage multiplied by the total number of
Units proposed to be Transferred by the Initiating Seller as set forth in the
Notice of Proposed Sale. Any Units purchased from a Selling Member pursuant to
this Section 12.3 shall be purchased at the same price per Unit and for the same
form of consideration, and shall be purchased on the same terms and conditions,
as the Units being transferred by the Initiating Seller.

12.3.2    Notice of Proposed Sale. The Initiating Seller shall, not less than 30
days prior to a proposed Tag-Along Sale to which Section 12.3.1 is applicable,
give written notice to each other Member of such proposed Tag-Along Sale. Such
notice (the “Notice of Proposed Sale”) shall set forth: (a) the number of Units
proposed to be Transferred, (b) the name and address of the Proposed Transferee,
(c) the maximum and minimum per Unit purchase price or, if not in cash, proposed
consideration and the other principal terms and conditions of the proposed
Tag-Along Sale, (d) that the Proposed Transferee has been informed of the
Tag-Along Right provided for in Section 12.3.1 and has agreed to purchase Units
in accordance with the terms of this Section 12.3 and (e) that the Initiating
Seller has agreed to consummate the Tag-Along Sale, subject only to any required
regulatory approvals, this Section 12.3 and Article 11 of this Agreement.

12.3.3    Exercise of Tag Along Right. The Tag-Along Right may be exercised by a
Selling Member by giving written notice to the Initiating Seller (the “Tag-Along
Notice”) within 15 days following such Selling Member’s receipt of the Notice of
Proposed Sale (the “Tag-Along Period”). Each Member who does not deliver a
Tag-Along Notice

 

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to the Initiating Seller within the Tag-Along Period shall be deemed to have
waived all of such Member’s rights under this Section 12.3 with respect to
inclusion of such Member’s Units in such proposed Tag-Along Sale, and the
Initiating Seller, subject to the participation of the Selling Members, if any,
shall have the right, for a 180- day period after the expiration of the
Tag-Along Period (or for such longer period of time as may be required to obtain
any final regulatory approvals, which the Initiating Seller agrees to use its
commercially reasonable efforts to obtain) to Transfer the Units specified in
the Notice of Proposed Sale to the Proposed Transferee at a per Unit purchase
price no greater than the maximum (and no less than the minimum) per Unit
purchase price set forth in the Notice of Proposed Sale and on other principal
terms that are not materially more favorable to the Initiating Seller and the
Selling Members than those set forth in the Notice of Proposed Sale.

12.3.4    Irrevocable Offer. The offer of each Selling Member contained in such
Selling Member’s Tag-Along Notice shall be irrevocable, and, to the extent such
offer is accepted, such Selling Member shall be bound and obligated to Transfer
in the proposed Tag-Along Sale on the same terms and conditions, as the
Initiating Seller, up to such amount of Units as such Selling Member shall have
specified in such Selling Members Tag-Along Notice; provided, however, that
(a) if the principal terms of the proposed sale change with the result that the
per Unit purchase price shall be less than the minimum per Unit purchase price
set forth in the Notice of Proposed Sale to Members or the other principal terms
shall be materially less favorable to the Initiating Seller and the Selling
Members than those set forth in the Notice of Proposed Sale to Members, each
Selling Member shall be permitted to withdraw the offer contained in such
Selling Members Tag-Along Notice and shall be released from such Selling
Member’s obligations thereunder, and (b) if at the end of the 180th day
following the date of the effectiveness of the Notice of Proposed Sale (or for
such longer period of time as may be required to obtain any final regulatory
approvals, which the Initiating Seller agrees to use its commercially reasonable
efforts to obtain) the Initiating Seller has not completed the proposed
Tag-Along Sale, each Selling Member shall be released from the obligations under
such Member’s respective Tag-Along Notice, any related Notice of Proposed Sale
shall be null and void, and it shall be necessary for separate such notice to be
furnished, and the terms and provisions of this Section 12.3 separately complied
with, in order to consummate such Tag-Along Sale pursuant to this Section 12.3.

12.3.5    Additional Compliance. If, prior to consummation, the terms of the
proposed Tag-Along Sale shall change with the result that the per Unit purchase
price shall be greater than the maximum per Unit purchase price set forth in any
Notice of Proposed Sale or the other principal terms shall be materially more
favorable to the Initiating Seller and the Selling Members than those set forth
in such Notice of Proposed Sale, then, unless all Members have exercised their
Tag-Along Rights, such Notice of Proposed Sale shall be null and void, and it
shall be necessary for a separate such Notice of Proposed Sale to be furnished,
and the terms and provisions of this Section 12.3 separately complied with, in
order to consummate such proposed Tag-Along Sale pursuant to this Section 12.3.

12.4    Miscellaneous. The following provisions shall be applied to any Transfer
to which Section 12.1, 12.2 or 12.3 applies:

 

 

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12.4.1    Consideration. In the event the consideration to be paid in exchange
for the Units in the proposed sale pursuant to Section 12.1, 12.2 or 12.3
includes any securities and the receipt thereof by any Selling Member would
require under applicable law (a) the registration or qualification of such
securities or of any Person as a broker or dealer or agent with respect to such
securities or (b) the provision to any Selling Member of any information other
than such information as a prudent issuer would generally furnish in an offering
made solely to Accredited Investors, the Initiating Seller shall be obligated
only to use its commercially reasonable efforts to cause such requirements to be
complied with to the extent necessary to permit such Selling Member to receive
such securities, it being understood and agreed that the Initiating Seller shall
not be under any obligation to effect a registration of such securities under
the Securities Act or similar statutes. Notwithstanding any provisions of this
Section 12.4, if use of commercially reasonable efforts by the Initiating Seller
shall not have resulted in such requirements being complied with to the extent
necessary to permit such Selling Member to receive such securities, or if
regulatory restrictions prevent a Selling Member from holding such securities
and the Initiating Seller, after using commercially reasonable efforts, is
unable to structure the transaction in a way that meets such regulatory
requirements, the Initiating Seller shall cause to be paid to such Selling
Member in lieu thereof, against surrender of the Interest which would have
otherwise been sold by such Selling Member to the Proposed Transferee in the
sale, an amount in cash equal to the fair market value (as determined by the
Board of Managers in good faith) of the securities which such Selling Member
would otherwise receive as of the date of the issuance of such securities in
exchange for Members’ Units. The obligation of the Initiating Seller to use
commercially reasonable efforts to cause such requirements to have been complied
with to the extent necessary to permit a Selling Member to receive such
securities shall be conditioned on such Selling Member executing such documents
and instruments, and taking such other actions (including without limitation, if
required by the Initiating Seller, agreeing to be represented during the course
of such transaction by a “purchaser representative” (as defined in Regulation D)
in connection with evaluating the merits and risks of the prospective investment
and acknowledging that such Selling Member was so represented), as the
Initiating Seller shall reasonably request in order to permit such requirements
to be complied with. Unless the Selling Member in question shall have taken all
actions reasonably requested by the Initiating Seller in order to comply with
the requirements under Regulation D, such Selling Member shall not have the
right to require the payment of cash in lieu of securities under this
Section 12.4.1.

12.4.2    Cooperation. Each Selling Member in a sale pursuant to Section 12.1,
12.2, or 12.3, as the case may be, whether in its capacity as such or as a
Member, member of the Board of Managers, officer or agent of the Company, or
otherwise, shall to the fullest extent permitted by law take or cause to be
taken all such actions as may be reasonably requested in order expeditiously to
consummate each sale pursuant to Section 12.1, 12.2 or 12.3 hereof and any
related transactions, including, without limitation, executing, acknowledging
and delivering consents, assignments, waivers and other documents or
instruments; furnishing information and copies of documents; filing
applications, reports, returns, filings and other documents or instruments with
governmental authorities; and otherwise cooperating with the Initiating Seller
and the Proposed Transferee; provided, however, that the Selling Members shall
be obligated to become liable (severally and not

 

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jointly) in respect of any representations, warranties, covenants, indemnities
or otherwise to the Proposed Transferee solely to the extent provided in the
immediately following sentence, and not to any non-compete or non-solicit or
strategic covenant. Without limiting the generality of the foregoing, each
Selling Member agrees to execute and deliver such agreements as may be
reasonably specified by the Initiating Seller to which the Initiating Seller
will also be party, including, without limitation, agreements to (a) make
individual representations as to the title to its Interest and the power,
authority and legal right to transfer such Interest to the extent such
agreements are also made by the Initiating Seller and (b) be liable in respect
of any purchase price escrow or adjustment provisions or reduction in purchase
price as may apply to Members generally resulting from representations,
warranties, covenants and indemnities in respect of the Company to the extent
that the Initiating Seller is also liable; provided, however, that, (i) except
with respect to individual representations, warranties, covenants, indemnities
and other agreements of holders of Units, the aggregate amount of such liability
shall not exceed the lesser of (a) such Selling Member’s pro rata portion of any
such liability, in accordance with such Selling Member’s portion of the total
value of Interests included in the sale or (b) the proceeds to such Selling
Member as a result of such sale and (ii) with respect to individual
representations, warranties, covenants, indemnities and other agreements of
holders of Interests, the aggregate amount of such liability shall not exceed
the proceeds to such Selling Member as a result of such sale.

12.4.3    Closing. The closing of a sale pursuant to Section 12.1, 12.2 or 12.3
shall take place at such time and place as the Initiating Seller shall specify
by reasonable advance notice to each Selling Member. It is understood and agreed
that the Initiating Seller shall not have any liability to any other Member
arising from, relating to or in connection with any proposed transaction which
has been the subject of a Tag-Along Notice, whether or not such proposed
transaction is consummated, other than liability for breach of the applicable
provisions of this Agreement.

12.4.4    Remain Subject. Units transferred pursuant to Sections 12.1, 12.2
or 12.3 shall remain subject to the provisions of this Agreement.

12.5    Liquidity Options.

12.5.1    Put.

(a)    Put Notice. Each Minority Member (including for the purposes of this
Section 12.5, their respective Permitted Transferees that have become Members)
may, by giving written notice (the “Put Notice”) to NBM at any time during a Put
Election Period, elect to sell to NBM up to the (x) Put Fraction multiplied by
(y) Put Base Amount of such Member (each such Member delivering a Put Notice,
for purposes of this Section 12.5, a “Putting Member”, and the number of Units
specified in a Put Notice shall be the “Put Units”). All Put Units referred to
in a Put Notice shall be valued at Fair Value as determined pursuant to
Section 12.5.3. Putting Members with respect to a particular Put Date are
referred to herein as the “Put Member(s)”. By delivering a Put Notice, the
Putting Member is, subject to Section 12.5.3(e), irrevocably committing to sell
to NBM (or the Company, as provided in Section 12.4.2 below) the Put Units
specified in the Put Notice. Each

 

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Member hereby agrees to be bound by the terms of any Put Notice delivered in
accordance with this Agreement.

(b)      Put Period.

(i)    Each Putting Member (together with its respective Permitted Transferees
that have become Members) shall be eligible to deliver a Put Notice in
accordance with Section 12.5.1(a) (A) during the period commencing on January 1,
2023, and ending on January 31, 2023, and thereafter, annually during each
January thereafter (the “Annual Trigger”) and (B) to the extent NBM remains a
Member, if a NBM Change of Control occurs, within 60 days of the NBM Change of
Control (the “COC Trigger”); provided, however, that upon delivery of notice to
the Minority Members that a lender or the agent holding a Permitted Financing
Pledge intend to exercise remedies thereunder that will result in an NBM Change
of Control (such notice being an “Enforcement Notice”), each Putting Member
(together with its respective Permitted Transferees that have become Members)
shall instead be required to deliver a Put Notice in accordance with
Section 12.5.1(a) within ten Business Days after the date of the Enforcement
Notice and any failure to deliver such Put Notice within such ten Business Day
period shall be deemed a waiver of the put rights of the Putting Members and
their Permitted Transferees pursuant to this Section 12.5.1(b)(i)(B) (it being
acknowledged that nothing in this Section shall require any holder of a
Permitted Financing Pledge to deliver any Enforcement Notice). Notwithstanding
anything to the contrary herein, (1) no Putting Member may provide a Put Notice
pursuant to this Section 12.5.1 with respect to less than 20% of such Putting
Member’s Put Base Amount, and (2) if NBM or its Permitted Transferee has
notified the Putting Members and their respective Permitted Transferees that
such Person has, in good faith, taken steps to sell the Company, the applicable
Put Election Period shall be tolled for a period not to exceed 120 days to
permit such Person to implement such sale.

(ii)    With respect to USPB, USPB shall also have the right to deliver a Put
Notice to NBM at any time during the period commencing on the date on which USPB
is no longer obligated to deliver cattle to the Company pursuant to the Cattle
Purchase and Sale Agreement (the “Cattle Agreement Trigger”) and ending 180 days
thereafter. With respect to New Kleinco, New Kleinco shall also have the right
to deliver a Put Notice to NBM at any time during the period commencing on the
date on which Klein is no longer employed by the Company (the “Klein Separation
Trigger”) and ending 180 days thereafter. Any Trigger is individually referred
to herein as a “Put Date” and are collectively referred to here as the “Put
Dates.” The applicable period beginning on each Put Date shall be referred to as
a “Put Election Period”; provided that if NBM or its Permitted Transferee has
notified USPB, NBPCo and New Kleinco and their respective Permitted Transferees
that such Person has, in good faith, taken steps to sell the Company, the
applicable Put Election Period shall be tolled for a period not to exceed 120
days to permit such Person to implement such sale.

 

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12.5.2    Call.

(a)    Call Notice. NBM (including, for the purposes of this Section 12.5, its
Permitted Transferees that have become Members) may, upon the occurrence of a
Klein Separation Trigger or the Cattle Agreement Trigger, by giving written
notice (the “Call Notice”) to each of USPB or New Kleinco, as applicable,
(including for purposes of this Section 12.5, their respective Permitted
Transferees that have become Members) following the occurrence of either such
Trigger, elect to purchase from New Kleinco or USPB, respectively, all or any
portion of the Units held by New Kleinco or USPB, respectively, specified in the
Call Notice (each such Member to which NBM delivers a Call Notice, for purposes
of this Section 12.5, a “Call Member”, and the Units identified in a Call Notice
with respect to a particular Member shall be referred to as “Call Units”). All
Call Units referred to in a Call Notice shall be valued at Fair Value as
determined pursuant to Section 12.5.3. By delivering a Call Notice, NBM is
irrevocably committing to purchase the Call Units from the Call Member. Each
Member hereby agrees to be bound by the terms of any Call Notice delivered in
accordance with this Agreement.

(b)    Call Period. NBM shall be eligible to deliver a Call Notice in accordance
with Section 12.5.2(a) with respect to all or any portion of the Units held by
such Member (i) in the case of USPB, at any time (A) during the period
commencing on the date of the Cattle Agreement Trigger and ending 180 days
thereafter and (B) during the period commencing on the date USPB owns less than
20% of USPB’s Aggregate Units and ending 180 days thereafter, and (ii) in the
case of New Kleinco, at any time during the period commencing on the date of the
Klein Separation Trigger and ending 180 days thereafter. The beginning dates of
such periods are individually referred to herein as a “Call Date” and are
collectively referred to here as the “Call Dates.” The 180-day periods beginning
on the Call Dates shall be referred to as a “Call Election Period”; provided
that if NBM or its Permitted Transferee has notified USPB and New Kleinco and
their respective Permitted Transferees that such Person has, in good faith,
taken steps to sell the Company, the applicable Call Election Period shall be
tolled for a period not to exceed 120 days to permit NBM to implement such sale.

12.5.3    Determination of Fair Value; Appraisal.

(a)    The Fair Value of the Put/Call Units shall be as of the applicable
Put/Call Date, which shall be determined by agreement between NBM, on the one
hand, and the Put/Call Member(s) on the other hand, if such agreement can be
reached within ten Business Days after the delivery of the Put Notice or Call
Notice, as the case may be.

(b)    If NBM and the Put/Call Member(s) are unable to agree on the Fair Value
of the Put/Call Units as of the applicable Put/Call Date within such period, NBM
and Leucadia or, if (i) USPB is a Putting Member or a Call Member and
(ii) Leucadia is not a Putting Member, USPB will each designate an investment
bank from the list of advisors identified in the letter agreement, dated as [●],
among NBM and the Minority Members (each, a “Valuator”) to determine their
estimate of the Fair Value of the Put/Call Units as of the applicable Put/Call
Date, such estimate of Fair Value to be delivered by each Valuator no later than
30 Business Days after such Valuator’s engagement.

 

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(i)    If the higher of the estimated Fair Values as determined by the Valuators
is equal to or less than 110% of the lower of the estimated Fair Values as
determined by the Valuators, then the Fair Value shall be finally determined to
be equal to (i) (x) the higher estimate plus (y) the lower estimate divided by
(ii) two.

(ii)    If the higher of the estimated Fair Values as determined by the
Valuators is greater than 110% of the lower of the estimated Fair Values as
determined by the Valuators, then Leucadia shall select a third advisor from a
list of five advisors (excluding the Valuators) to be selected by NBM from the
list of advisors identified in the letter agreement, dated as [●], among NBM and
the Minority Members (the “Resolving Firm”).

(iii)    The Resolving Firm shall determine its estimate of the Fair Value of
the Put/Call Units as of the applicable Put/Call Date, such estimate of Fair
Value to be delivered by the Resolving Firm each advisor no later than 30
Business Days after such Resolving Firm’s engagement.

(iv)    If the Resolving Firm’s estimate of Fair Value is equal to or between
the estimate of Fair Values made by the initial two Valuators, then the
Resolving Firm’s estimate of the Fair Value shall be the finally determined Fair
Value.

(v)    If the Resolving Firm’s estimate of Fair Value is not between the
estimate of Fair Values made by the initial two Valuators, then the finally
determined Fair Value shall be equal to (1) (x) the Resolving Firm’s estimate of
Fair Value plus (y) the estimate of Fair Value by the initial Valuator who was
closest to the estimate of Fair Value by the Resolving Firm divided by two.

(c)    The determination of estimated Fair Value by the Valuators and/or
Resolving Firm shall be final and binding on all parties. In making their
determination, each of the Valuators and the Resolving Firm shall rely solely on
written submissions made by NBM and any Put/Call Member(s). The “Fair Value”
with respect to a Unit shall be the fair market value of a Unit, determined on
the basis of the aggregate equity value of the Company, valuing such Unit as a
proportionate interest in a going concern, but without discount for
marketability, lack of liquidity, minority status or otherwise. The Fair Value
shall not take into account the value of the Company or NBM’s Interests, in each
case, reflected on NBM’s books and records or financial statements, nor shall it
take into account any synergies resulting from exercise of a Put.

(d)    NBM shall pay the cost of the Valuator it appoints, and (i) Leucadia, if
Leucadia is a Put Member, or (ii) USPB, if USPB designates a Valuator pursuant
to Section 12.5.3(b), as applicable, shall pay for the other Valuator (provided
that if (A) (1) Leucadia shall not be a Put Member or (2) the Fair Value is
being calculated with respect to the Call Units, and (B) USPB is not designating
a Valuator pursuant to Section 12.5.3(b), then the Company shall pay for the
second Valuator). The Resolving Firm, if needed, shall be paid by the Company.

 

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(e)    Notwithstanding anything to the contrary herein, once the Fair Value has
been determined pursuant to this Section 12.5, if the applicable Minority Member
is not satisfied with the Fair Value, such Minority Member may determine not to
proceed with the exercise of its put option; provided that if Leucadia did not
submit a notice of exercise with respect to the put option, the Minority Members
that determine not to proceed with the exercise of the put option shall
reimburse the Company for their pro rata portion of the fees and expenses of the
Valuator selected by Leucadia.

12.5.4    Sale Notice. Following the establishment of the Fair Value of the
Put/Call Units, as of the applicable Put/Call Date, the Put/Call Member(s) shall
sell, and NBM shall purchase, all of the Put/Call Units for the Fair Value of
the Put/Call Units, without interest, on a date mutually agreed by NBM and the
applicable Put/Call Members (the “Pay Date”) that is no later than 180 days
following the date that the Put Notice or Call Notice, as the case may be, was
received by the applicable Party,

12.5.5    Default by NBM. In the event that NBM (or its Permitted Transferee)
does not fulfill its obligations with respect to a Put Notice by a Minority
Member, (a) the payment owed by NBM to the applicable Minority Member shall
accrue interest at a rate of 12% per annum from the six-month anniversary of the
date on which NBM receives the Put Notice until paid in full, (b) beginning on
the 12-month anniversary of the date on which NBM receives the Put Notice, the
putting Minority Members will be entitled to receive all distributions from the
Company that would have otherwise been distributed to NBM; provided that (i) if
more than one Minority Member has delivered a Put Notice, each such Minority
Member will be entitled to receive its pro rata share of such distributions
based on the amount of Units it is putting in relation to the total amount of
Units being put by all of the putting Members, and (ii) any such distributions
received by a Minority Member will reduce the amount owed by NBM to such
Minority Member in connection with the Put Notice on a dollar-for-dollar basis,
(c) beginning on the 12-month anniversary of the date on which NBM receives the
Put Notice, Leucadia will be entitled to initiate a sale process (including dual
sale processes with respect to both (x) and (y) below) to (x) sell the Company
or (y) find a third party to purchase NBM’s Units; provided that in the event of
a sale process pursuant to this clause (c) (i) Leucadia will have a right of
first refusal with respect to any proposed transaction under the same terms and
conditions (including price, payment conditions, representations, warranties,
indemnities and holdback/escrow) offered by the proposed purchaser, (ii) NBM
will be obligated to accept the purchase price resulting from any such sale
process, which proceeds will be used to satisfy the outstanding amount owed by
NBM with respect to all previously exercised Put Options, including any interest
accrued with respect thereto (the “Outstanding Balance”), and (A) if the
proceeds from such sale process are in excess of the Outstanding Balance, NBM
will retain any such excess proceeds, and (B) if the proceeds from such sale
process are less than the Outstanding Balance, NBM will remain liable for any
such shortfall, (iii) NBM may terminate such sale process at any time by paying
the Outstanding Balance in full, (iv) during such sale process, NBM will retain
its management rights in the Company, but will, and will cause the Company to,
fully cooperate with Leucadia in support of such sale process and (v) if no
offers are received pursuant to such sale process, Leucadia will have the option
to either (A) release all claims for the Outstanding Balance in exchange for

 

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receipt of NBM’s membership interests or (B) retain the right to pursue NBM for
the Outstanding Balance.

 

13.

DISSOLUTION OF COMPANY

13.1    Termination of Membership. No Member shall resign or withdraw from the
Company except that, subject to the restrictions set forth in Article 11, any
Member may Transfer its Interest in the Company to a transferee and a transferee
may become a Member in place of the Member assigning such Interest.

13.2    Events of Dissolution. The Company shall be dissolved upon the happening
of any of the following events: (a) the entry of a decree of judicial
dissolution under Section 18-802

of the Act, (b) the written determination of the Members holding two-thirds of
the outstanding Units or (c) the disposition of all of the Company’s assets.

13.3    Liquidation. Upon dissolution of the Company for any reason, the Company
shall immediately commence to wind up its affairs. A reasonable period of time
shall be allowed for the orderly termination of the Company’s business,
discharge of its liabilities, and distribution or liquidation of the remaining
assets so as to enable the Company to minimize the normal losses attendant to
the liquidation process. After the payment of the debts and liabilities of the
Company and the establishment of reasonable reserves, any property or assets of
the Company, including proceeds from the liquidation thereof, remaining upon the
dissolution and liquidation of the Company shall be Distributed to the Members
in accordance with Section 5.2.2. A full accounting of the assets and
liabilities of the Company shall be taken and a statement thereof shall be
furnished to each Member promptly after the distribution of all of the assets of
the Company. Such accounting and statements shall be prepared under the
direction of the Board of Managers.

13.4    No Action for Dissolution. The Members acknowledge that irreparable
damage would be done to the goodwill and reputation of the Company if any Member
should bring an action in court to dissolve the Company under circumstances
where dissolution is not required by Section 13.2. This Agreement has been drawn
carefully to provide fair treatment of all parties and equitable payment in
liquidation of the Interests of all Members. Accordingly, except where the Board
of Managers has failed to liquidate the Company as required by Section 13.3 and
except as specifically provided in Section 18 802 of the Act, each Member hereby
waives and renounces its right to initiate legal action to seek dissolution or
to seek the appointment of a receiver or trustee to liquidate the Company.

13.5    No Further Claim. Upon dissolution, each Member shall have recourse
solely to the assets of the Company for the return of such Member’s capital, and
if the Company’s property remaining after payment or discharge of the debts and
liabilities of the Company, including debts and liabilities owed to one or more
of the Members, is insufficient to return the aggregate Capital Contributions of
each Member, such Member shall have no recourse against the Company, the Board
of Managers or any other Member.

 

14.

INDEMNIFICATION

14.1    General. To the fullest extent permitted by law, the Company shall
indemnify, defend and hold harmless the Board of Managers and each Manager, each
Member, including the

 

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Tax Matters Member and Partnership Representative in such Member’s capacities as
such (as applicable), and the officers of the Company (all indemnified persons
being referred to as “Indemnified Persons” for purposes of this Article 14),
from any liability, loss or damage incurred by the Indemnified Person by reason
of any act performed or omitted to be performed by the Indemnified Person in
connection with the business of the Company, from liabilities or obligations of
the Company imposed on such Person by virtue of such Person’s position with the
Company, including reasonable attorneys’ fees and costs and any amounts expended
in the settlement of any such claims of liability, loss or damage; provided,
however, that if the liability, loss, damage or claim arises out of any action
or inaction of an Indemnified Person, indemnification under this Section 14.1
shall be available only if (a) either (i) the Indemnified Person, at the time of
such action or inaction, determined in good faith that its course of conduct was
in, or not opposed to, the best interests of the Company or (ii) in the case of
inaction by the Indemnified Person, the Indemnified Person did not intend its
inaction to be harmful or opposed to the best interests of the Company and
(b) the action or inaction did not constitute fraud or willful misconduct by the
Indemnified Person; provided, further, however, that indemnification under this
Section 14.1 shall be recoverable only from the assets of the Company, and not
from any assets of the Members. The Company shall pay or reimburse reasonable
attorneys’ fees of an Indemnified Person as incurred; provided that such
Indemnified Person executes an undertaking, with appropriate security if
requested by the Board of Managers, to repay the amount so paid or reimbursed in
the event of a final non-appealable determination by a court of competent
jurisdiction that such Indemnified Person is not entitled to indemnification
under this Article 14. The Company may pay for insurance covering liability of
the Indemnified Persons for negligence in operation of the Company’s affairs.

14.2    Exculpation. No Indemnified Person shall be liable, in damages or
otherwise, to the Company or to any Member for any loss that arises out of any
act performed or omitted to be performed by it, him or her pursuant to the
authority granted by this Agreement if (a) either (i) the Indemnified Person, at
the time of such action or inaction, determined in good faith that such
Indemnified Person’s course of conduct was in, or not opposed to, the best
interests of the Company, or (ii) in the case of inaction by the Indemnified
Person, the Indemnified Person did not intend such Indemnified Person’s inaction
to be harmful or opposed to the best interests of the Company and (b) the
conduct of the Indemnified Person did not constitute fraud or willful misconduct
by such Indemnified Person.

14.3    Persons Entitled to Indemnity. Any Person who is within the definition
of Indemnified Person at the time of any action or inaction in connection with
the business of the Company shall be entitled to the benefits of this Article 14
as an Indemnified Person with respect thereto, regardless of whether such Person
continues to be within the definition of Indemnified Person at the time of such
Indemnified Person’s claim for indemnification or exculpation hereunder.

14.4    Procedure Agreements. The Company may enter into an agreement with any
of its officers, or the Managers, setting forth procedures consistent with
applicable law for implementing the indemnities provided in this Article 14.

14.5    Duties of Board of Managers. Without limiting applicability of any other
provision of this Agreement, including without limitation the other provisions
of this Article 14, which shall

 

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control notwithstanding anything to the contrary in this Section 14.5, the
following provisions shall be applicable to the Board of Managers and the
members thereof in their capacity as members of the Board of Managers:

(a)    The Board of Managers and the Managers and the decisions of the Board of
Managers shall have the benefit of the business judgment rule to the same extent
as the Board of Managers, such members and such decisions would have the benefit
of such rule if the Board of Managers were a board of directors of a Delaware
corporation.

(b)    Except as set forth in Section 14.7.3, the Managers shall have the same
duties of care and loyalty as such Persons would have if such Persons were
directors of a Delaware corporation but in no event shall any Manager be liable
for any action or inaction for which exculpation is provided under Section 14.2.

14.6    Interested Transactions. To the fullest extent permitted by law, no
member of the Board of Managers shall be deemed to have breached his duty of
loyalty to the Company or the Members (and such member of the Board of Managers
shall not be liable to the Company or to the Members for breach of any duty of
loyalty or analogous duty) with respect to any action or inaction in connection
with or relating to any transaction that was approved in accordance with
Section 6.11.

14.7    Fiduciary and Other Duties.

14.7.1    An Indemnified Person acting under this Agreement shall not be liable
to the Company or to any other Indemnified Person for his, her or its good faith
reliance on the provisions of this Agreement. The provisions of this Agreement,
to the extent that they restrict the duties (including fiduciary duties) and
liabilities of an Indemnified Person otherwise existing at law or in equity, are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.

14.7.2    Notwithstanding any other provision of this Agreement or otherwise
applicable law, whenever in this Agreement an Indemnified Person is permitted or
required to make a decision (a) in his, her or its discretion or under a grant
of similar authority, the Indemnified Person shall be entitled to consider only
such interests and factors as such Indemnified Person desires, including his,
her or its own interests, and shall, to the fullest extent permitted by
applicable law, have no duty or obligation to give any consideration to any
interest of or factors affecting the Company or any other Person, or (b) in his,
her or its good faith or under another express standard, the Indemnified Person
shall act under such express standard and shall not be subject to any other or
different standards.

14.7.3    Notwithstanding any other provision of this Agreement or otherwise
applicable law, other than corporate opportunities belonging to the Company,
which shall be only acquiring any interest in any cattle slaughtering facilities
in the United States (unless such corporate opportunity is waived by a vote of
the Board of Managers, which vote shall include a majority of the Managers not
appointed by Leucadia or NBM, as applicable), NBM and Leucadia (or any of their
Affiliates) may each engage in any other business activities whatsoever and
engage in or possess an interest in other business

 

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ventures of any nature or description, independently or with others, similar or
dissimilar to the business conducted or proposed to be conducted by the Company
or any of its Affiliates, and none of the Company, any of its Affiliates or any
other Member (including such other Member’s Affiliates) shall have any rights
in, with respect to, or to be informed of such other business activities or
ventures or the income or profits derived therefrom. Other than corporate
opportunities belonging to the Company, which shall be only acquiring any
interest in any cattle slaughtering facilities in the United States (unless such
corporate opportunity is waived by a vote of the Board of Managers, which vote
shall include a majority of the Managers not appointed by Leucadia or NBM, as
applicable), NBM or Leucadia (or any of their Affiliates) shall not be obligated
to present any business or investment opportunity to the Company or its
Affiliates even if such opportunity is of a character that, if presented to the
Company or such Affiliates, could be taken by the Company or such Affiliates,
and NBM or Leucadia (or any of their Affiliates) shall have the right to take
for its own account (individually or as a partner, member, shareholder,
fiduciary or otherwise) or to recommend to any other Person any such particular
business or investment opportunity.

 

15.

REPRESENTATIONS AND COVENANTS BY THE MEMBERS

Each Member hereby represents and warrants to, and agrees with, the Board of
Managers, the other Members and the Company as follows:

15.1    Investment Intent. Such Member is acquiring such Member’s Interest with
the intent of holding the same for investment for such Member’s own account and
without the intent or a view of participating directly or indirectly in any
distribution of such Interests within the meaning of the Securities Act or any
applicable state securities laws.

15.2    Securities Regulation. Such Member acknowledges and agrees that such
Member’s Interest is being issued and sold in reliance on the exemption from
registration under the Securities Act and exemptions contained in applicable
state securities laws, and that such Member’s Interest cannot and will not be
sold or transferred except in a transaction that is exempt under the Securities
Act and applicable state securities laws or pursuant to an effective
registration statement under the Securities Act and applicable state securities
laws. Such Member understands that such Member has no contractual right for the
registration under the Securities Act of such Member’s Interest for public sale
and that, unless such Member’s Interest is registered or an exemption from
registration is available, such Member’s Interests may be required to be held
indefinitely.

15.3    Knowledge and Experience. Such Member has such knowledge and experience
in financial, tax and business matters as to enable such Member to evaluate the
merits and risks of such Member’s investment in the Company and to make an
informed investment decision with respect thereto.

15.4    Economic Risk. Such Member is able to bear the economic risk of such
Member’s investment in such Member’s Interest.

15.5    Binding Agreement. Such Member has all requisite power and authority to
enter into and perform this Agreement and this Agreement is and will remain such
Member’s valid and

 

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binding agreement, enforceable in accordance with its terms (subject, as to the
enforcement of remedies, to any applicable bankruptcy, insolvency or other laws
affecting the enforcement of creditors rights).

15.6    Tax Position. A Member will not take a position on such Member’s tax
returns, in any claim for refund or in any administrative or legal proceedings
that is inconsistent with this Agreement or with any information return filed by
the Company unless such Member provides prior written notice to the Company and
consults with and considers in good faith the suggestions of the Company with
respect to such position.

15.7    Information. Such Member has received all documents, books and records
pertaining to an investment in the Company requested by such Member. Such Member
has had a reasonable opportunity to ask questions of and receive answers
concerning the Company, and all such questions have been answered to such
Member’s satisfaction.

15.8    Licenses and Permits. Such Member will cooperate in providing such
information, in signing such documents and in taking any other action as may
reasonably be requested by the Company in connection with obtaining any foreign,
federal, state or local license or permit needed to operate its business or the
business of any entity in which the Company invests.

 

16.

COMPANY REPRESENTATIONS

In order to induce the Members to enter into this Agreement and to make the
Capital Contributions contemplated hereby, the Company hereby represents and
warrants to each Member as follows:

16.1    Duly Formed. All action of the Company necessary to authorize the
effectiveness of this Agreement has been taken. The Company has been duly formed
and is validly existing limited liability company under the Act, with all
necessary power and authority under the Act to issue the Interests issued to the
Members hereunder.

16.2    Valid Issue. The Interests issued to the Members have been duly and
validly issued, and no liability for any additional Capital Contributions or for
any obligations of the Company will attach thereto.

 

17.

AMENDMENTS TO AGREEMENT

17.1    Amendments. This Agreement may be modified or amended with the prior
written consent of the Board of Managers, subject to Sections 6.6 and 7.4.2.
Notwithstanding the foregoing provisions of this Section 17.1: (1) this
Section 17.1 may not be amended without the approval of each Member; and
(2) other provisions of this Agreement may not be amended without the approval
of each Member affected if the amendment (a) would reduce any such Member’s
Interests or would reduce the allocation to such Member of Net Profit or Net
Loss, or would reduce the Distributions of cash or property to such Member from
that which is provided or contemplated herein, unless such amendment treats all
Members ratably based on their Interests and such amendment is being executed to
reflect (i) any dilution in such Member’s Interest resulting from the issuance
of Units contemplated by Article 3 or (ii) the admission of a new Member
pursuant to Article 11; or (b) would increase such Person’s obligation to make
Capital Contributions or

 

61

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obligation with respect to other liabilities. Sections 14.1, 14.2 and 14.3 of
this Agreement may not be amended in a manner to reduce or restrict the
indemnification rights provided in Sections 14.1, 14.2 and 14.3 unless any
Indemnified Person that is a Member has consented; provided, however that such
indemnification rights with respect to any officer or manager of the Company may
be so amended, on a prospective basis with respect to acts occurring after the
date of such amendment only, upon 30 days prior written notice to such officer.
All proposed amendments to this Agreement will be sent to each Member within a
reasonable period of time prior to being presented for approval whether by the
Board of Managers or the Members and also promptly after the effectiveness
thereof.

17.2    Corresponding Amendment of Certificate of Formation. The Board of
Managers shall cause to be prepared and filed any amendment to the Certificate
of Formation that may be required to be filed under the Act as a consequence of
any amendment to this Agreement.

17.3    Binding Effect. Any modification or amendment to this Agreement pursuant
to this Article 17 shall be binding on all Members.

 

18.

GENERAL

18.1    Successors; Delaware Law; Etc. This Agreement: (a) shall be binding upon
the executors, administrators, estates, heirs and legal successors and permitted
assigns of the Members, (b) shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to principles of conflict
of laws, and (c) may be executed in more than one counterpart (including by
electronic transmission or attachment to e-mail), all of which together shall
constitute one agreement. This Agreement constitutes the entire agreement among
the parties with respect to the formation of, and the terms and conditions
relating to the management, operation, business and affairs of, the Company, and
supersedes all prior oral and written, and all contemporaneous oral,
understandings, negotiations and agreements with respect to the subject matter
hereof.

18.2    Notices, Etc. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given upon
personal delivery or receipt (which may be evidenced by a return receipt if sent
by registered mail or by signature if delivered by courier or delivery service),
addressed (a) if to any Member, at the address of such Member set forth in the
records of the Company or at such other address as such Member shall have
furnished to the Company in writing as the address to which notices are to be
sent hereunder and (b) if to the Company or to the Board of Managers to it at:
12200 N. Ambassador Drive, Kansas City, MO 64163, with copies to (i) Leucadia
(which copy shall not constitute notice to Leucadia) at 520 Madison Avenue, New
York, NY 10022, Attention: President and (ii) NBM Ultimate Parent (which copy
shall not constitute notice to NBM or NBM Ultimate Parent) at Rua Queiroz Filho,
1.560 – Torre Sabiá, 3º andar - Vila Hamburguesa, CEP: 05319-000 - São Paulo –
Brazil, Attention: Legal Vice-President.

18.3    Execution of Documents. From time to time after the Effective Date, upon
the request of the Board of Managers, each Member shall perform, or cause to be
performed, all such additional acts, and shall execute and deliver, or cause to
be executed and delivered, all such additional instruments and documents, as may
be required to effectuate the purposes of this

 

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Agreement. Each Member, including each new and substituted Member, by the
execution of this Agreement or by agreeing in writing to be bound by this
Agreement, irrevocably constitutes and appoints the Board of Managers or any
Person designated by the Board of Managers to act on such Member’s behalf for
purposes of this Section 18.3 as such Member’s true and lawful attorney-in-fact
with full power and authority in such Member’s name and stead to execute,
deliver, swear to, file and record at the appropriate public offices such
documents as may be necessary or appropriate to carry out this Agreement,
including:

(a)    all certificates and other instruments (specifically including
counterparts of this Agreement), and any amendment thereof, that the Board of
Managers deems appropriate to qualify or to continue the Company as a limited
liability company in any jurisdiction in which the Company may conduct business
or in which such qualification or continuation is, in the opinion of the Board
of Managers, necessary to protect the limited liability of the Members;

(b)    all amendments to this Agreement adopted in accordance with the terms
hereof and all instruments that the Board of Managers deems appropriate to
reflect a change or modification of the Company in accordance with the terms of
this Agreement; and

(c)    all conveyances and other instruments that the Board of Managers deems
appropriate to reflect the dissolution of the Company.

The appointment by each Manager or any Person designated by the Board of
Managers to act on its behalf for purposes of this Section 18.3 as such Member’s
attorney-in-fact shall be deemed to be a power coupled with an interest, in
recognition of the fact that each of the Members under this Agreement will be
relying upon the power of the Board of Managers to act as contemplated by this
Agreement in any filing and other action by him, her or it on behalf of the
Company, and shall survive the bankruptcy, dissolution, death, adjudication of
incompetence or insanity of any Member giving such power and the transfer or
assignment of all or any part of such Member’s Interests; provided, however,
that in the event of a Transfer by a Member of all of its Interest, the power of
attorney given by the transferor shall survive such assignment only until such
time as the transferee shall have been admitted to the Company as a substituted
Member and all required documents and instruments shall have been duly executed,
filed, and recorded to effect such substitution.

18.4    Consent to Jurisdiction. Each of the parties agrees that all actions,
suits or proceedings arising out of or based upon this Agreement or the subject
matter hereof shall be brought and maintained exclusively in the federal courts
located in the State of Delaware. Each of the parties by execution hereof
(a) hereby irrevocably submits to the jurisdiction of the federal courts located
in the State of Delaware for the purpose of any action, suit or proceeding
arising out of or based upon this Agreement or the subject matter hereof and
(b) hereby waives to the extent not prohibited by applicable law, and agrees not
to assert, by way of motion, as a defense or otherwise, in any such action, suit
or proceeding, any claim that such party is not subject personally to the
jurisdiction of the above-named court, that he or it is immune from
extraterritorial injunctive relief or other injunctive relief, that such party’s
property is exempt or immune from attachment or execution, that any such action,
suit or proceeding may not be brought or maintained in one of the above-named
court should be dismissed on the grounds of forum non conveniens, should be

 

63

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transferred to any court other than one of the above-named court, should be
stayed by virtue of the pendency of any other action, suit or proceeding in any
court other than one of the above-named court, or that this Agreement or the
subject matter hereof may not be enforced in or by any of the above-named court.
Each of the parties hereto hereby consents to service of process in any such
suit, action or proceeding in any manner permitted by the laws of the State of
Delaware, agrees that service of process by registered or certified mail, return
receipt requested, at the address specified in or pursuant to Section 18.2
hereof is reasonably calculated to give actual notice and waives and agrees not
to assert by way of motion, as a defense or otherwise, in any such action, suit
or proceeding any claim that service of process made in accordance with
Section 18.2 hereof does not constitute good and sufficient service of process.
The provisions of this Section 18.4 shall not restrict the ability of any party
to enforce in any court any judgment obtained in the federal courts located in
the State of Delaware.

18.5    Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, THE COMPANY AND EACH MEMBER HEREBY WAIVES, AND COVENANTS
THAT SUCH PERSON WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE),
ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE
SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
SOUNDING IN TORT OR CONTRACT OR OTHERWISE.

18.6    Specific Enforcement; Remedies; Waiver. Each party hereto acknowledges
and agrees that each party hereto will be irreparably damaged in the event any
of the provisions of this Agreement are not performed by the parties in
accordance with their specific terms or are otherwise breached. Accordingly, it
is agreed that each of the Company and each Member shall be entitled to an
injunction to prevent breaches of this Agreement, and to specific enforcement of
this Agreement and its terms and provisions in any action instituted to enforce
the provisions hereof. The rights and remedies provided by this Agreement are
cumulative, and the use of any one right or remedy by any party will not
preclude or waive such party’s right to use any or all other remedies. Said
rights and remedies are given in addition to any other rights the parties may
have by law, statute, ordinance or otherwise. Neither any failure nor any delay
by any party in exercising any right, power, or privilege under this Agreement
or any of the documents referred to in this Agreement will operate as a waiver
of such right, power, or privilege, and no single or partial exercise of any
such right, power, or privilege will preclude any other or further exercise of
such right, power, or privilege or the exercise of any other right, power, or
privilege. To the maximum extent permitted by applicable Laws, (a) no claim or
right arising out of this Agreement or any of the documents referred to in this
Agreement can be waived by a party, in whole or in part, unless made in a
writing signed by the party against whom such waiver is sought to be enforced;
(b) a waiver given by a party will only be applicable to the specific instance
for which it is given; and (c) no notice to or demand on a party will (i) waive
or otherwise affect any obligation of that party or (ii) affect the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement or the documents referred to in this
Agreement.

18.7    Severability. If any provision of this Agreement is determined by a
court to be invalid or unenforceable, that determination shall not affect the
other provisions hereof, each of

 

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which shall be construed and enforced as if the invalid or unenforceable portion
were not contained herein. Such invalidity or unenforceability shall not affect
any valid and enforceable application thereof, and each such provision shall be
deemed to be effective, operative, made, entered into or taken in the manner and
to the full extent permitted by law.

18.8    Table of Contents, Headings. The table of contents and headings used in
this Agreement are used for administrative convenience only and do not
constitute substantive matter to be considered in construing this Agreement.

18.9    No Third Party Rights. Except for the provisions of Section 7.15, the
provisions of this Agreement are for the benefit of the Company, the Board of
Managers and the Members and no other Person, including creditors of the
Company, shall have any right or claim against the Company, the Board of
Managers or any Member by reason of this Agreement or any provision hereof or be
entitled to enforce any provision of this Agreement.

[REMAINDER OF THIS PAGE BLANK]

 

65

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THE PARTIES HAVE EXECUTED THIS AGREEMENT AS OF THE EFFECTIVE DATE.

LEUCADIA NATIONAL CORPORATION

 

By:                                                              

Name:                                                         

Title:                                                           

 

[Signature Page to Third Amended and Restated Limited Liability Company
Agreement of National Beef Packing Company, LLC]

--------------------------------------------------------------------------------

U.S. PREMIUM BEEF, LLC

 

By:                                                              

Name:                                                         

Title:                                                           

 

[Signature Page to Third Amended and Restated Limited Liability Company
Agreement of National Beef Packing Company, LLC]

--------------------------------------------------------------------------------

NBPCO HOLDINGS, LLC

 

By:                                                              

Name:                                                         

Title:                                                           

 

[Signature Page to Third Amended and Restated Limited Liability Company
Agreement of National Beef Packing Company, LLC]

--------------------------------------------------------------------------------

TMK HOLDINGS, LLC

By:                                                                

Name:                                                           

Title:                                                             

 

[Signature Page to Third Amended and Restated Limited Liability Company
Agreement of National Beef Packing Company, LLC]

--------------------------------------------------------------------------------

NBM US HOLDINGS, INC.

By:                                                              

Name:                                                         

Title:                                                           

 

[Signature Page to Third Amended and Restated Limited Liability Company
Agreement of National Beef Packing Company, LLC]

--------------------------------------------------------------------------------

NATIONAL BEEF PACKING COMPANY, LLC

By:                                                              

Name:                                                         

Title:                                                           

 

[Signature Page to Third Amended and Restated Limited Liability Company
Agreement of National Beef Packing Company, LLC]

--------------------------------------------------------------------------------

Exhibit A

MEMBERS OF THE COMPANY, CAPITAL CONTRIBUTIONS AND ISSUED UNITS

AND PERCENTAGE INTEREST

 

Member

 

  

Units

 

  

Capital Contributions

 

  

Percentage Interest

 

NBM

 

  

[●]

 

  

$[●]

 

  

[●]%

 

Leucadia

 

  

[●]

 

  

$[●]

 

  

[●]%

 

USPB

 

  

[●]

 

  

$[●]

 

  

[●]%

 

NBPCo

 

  

[●]

 

  

$[●]

 

  

[●]%

 

New Kleinco

 

  

[●]

 

  

$[●]

 

  

[●]%

 

TOTAL

 

  

10,683.14

 

  

$745,664,655

 

  

100%

 

--------------------------------------------------------------------------------

Exhibit B

ITEMS REQUIRING LEUCADIA/NBM APPROVAL

 

●   Approval of any capital expenditures in excess of $60 million in the
aggregate in any Fiscal Year;

 

●   Public offerings or material acquisitions, mergers, joint ventures or
similar transactions by the Company to the extent not included in the annual
Capex budget;

 

●   Sale, lease, license or other disposition of substantially all of the assets
of the Company;

 

●   Related party transactions by the Company that are (a) on an arm’s length
basis and would result in annual payments by or to the Company in excess of
$5,000,000 or (b) not on an arm’s length basis;

 

●   Fundamental changes in the scope of the Company’s business;

 

●   Amendments to the Company’s Certificate of Formation or Limited Liability
Company Agreement;

 

●   Issuance by the Company of equity securities or other convertible
securities;

 

●   Incurrence of debt by the Company in excess of the Company’s existing lines
of credit on the Effective Date;

 

●   Non-pro rata payment of dividends, Distributions and other payments by the
Company to any Member of the Company (including in consideration for the
redemption or repurchase of any Units);

 

●   Appointment or removal of the Company’s auditors (to the extent the
appointment is of an auditor that is not one of the following auditors:
Deloitte, PricewaterhouseCoopers, Ernst & Young, KPMG, BDO International and
Grant Thornton);

 

●   Any appointment or removal of the Company’s tax accountants;

 

●   Any reduction to the Company’s Tax Distribution rate to less than 54%;
provided that Leucadia must provide an economic justification in order to veto
such a reduction; provided, further, that maximizing cash distributions to
Members shall be a valid economic justification;

 

●   Any splits, Distributions, combinations, subdivisions, recapitalizations or
similar changes to the capitalization of the Company;

 

●   Any conversion of the Company from a limited liability company, any change
in the Company’s status as a partnership for U.S. federal income tax purposes;
and

--------------------------------------------------------------------------------

•   Any settlement or compromise of any tax audit, dispute or controversy or
proceeding relating to the Company with a taxing authority, and any tax election
that is inconsistent with past practice and not required by applicable law, that
would reasonably be expected to have a material, adverse and disproportionate
effect on Leucadia, versus NBM and the other Members.