Exhibit 10.3





 


 


 


 


 


 


PLEDGE
AGREEMENT


 


 


THIS PLEDGE
AGREEMENT, dated as of July 26, 2011, is entered into by and
between COBANK, ACB, a federally chartered instrumentality of the United States
(“CoBank”), and U.S. PREMIUM BEEF, LLC, a Delaware limited
liability company (the “Pledgor”).


 


RECITALS:


 


WHEREAS,
Pledgor and CoBank were parties to that certain Amended and Restated Loan
Agreement and Security Agreement dated June 22, 2009, as amended (the “Original
Loan Agreement”).  The loan made by CoBank to Pledgor pursuant to the Original
Loan Agreement was secured by, among other things, that certain Pledge
Agreement dated June 22, 2009 (the “Original Pledge Agreement”), between
CoBank and Pledgor.  


 


WHEREAS,
the Original Loan Agreement has been amended and restated in full pursuant to
the Loan Agreement (as hereinafter defined).  


 


WHEREAS,
Pledgor is the legal and beneficial owner of the undivided membership interest
in National Beef (as hereinafter defined) that is set forth on Schedule A
attached hereto; and


 


WHEREAS,
as an inducement to CoBank to execute the Loan Agreement (as hereinafter
defined) and to make the advances provided therein to Pledgor, Pledgor desires
to grant to CoBank a first-priority security interest in and to the Collateral
(as hereinafter defined) and Pledgor and CoBank desire to amend and restate the
Original Pledge Agreement in full as provided herein.


 


NOW THEREFORE,
for and in consideration of the loan under the Loan Agreement and any other
loan or advance (including any other loan or advance by renewal or extension)
or other financial accommodation made or granted to Pledgor by CoBank, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:


 


1.
        Definitions and Interpretation of Agreement. In
addition to the terms defined elsewhere in this Agreement, the following terms
shall have the meanings indicated for purposes of this Agreement (such meanings
to be equally applicable to both the singular and plural forms of the terms
defined). Capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Loan Agreement.


 


“Agreement”
means this Pledge Agreement, as it may be amended, modified or supplemented
from time to time, which shall be a Loan Document (as defined in the Loan
Agreement).


 


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“Collateral”
means and includes the Membership Interests, Distributions and all
certificates, accounts, chattel paper, instruments, general intangibles, cash,
books, records, notices and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for the
Membership Interests or the Distributions, together with all rights of Pledgor
to receive and retain any of the foregoing and all proceeds of the foregoing.


 


“Default”
means the occurrence of an “Event of Default” as defined in the Loan Agreement.


 


“Distributions”
shall mean all right, title and interest of Pledgor, whether legal or
equitable, now or hereafter existing and howsoever evidenced, incurred or
arising, to receive distributions from National Beef as a member thereof or
otherwise, whether cash or non-cash, including, without limitation, any and all
rights of Pledgor to receive a return of all or any part of any contribution
made by Pledgor to National Beef, including, without limitation, any and all
rights to receive returns of advances or loans.


 


“Loan
Agreement” means, collectively, that certain Master Loan Agreement No. RI0992, dated as
of even date herewith (the “MLA”), and that certain Supplement No. RI0992T01 to
the MLA, dated as of even date herewith, between Pledgor and CoBank, as the
same may be amended, modified, supplemented, extended, or restated from time to
time.


 


“Membership
Interests” shall mean all right, title and interest of Pledgor, whether
legal or equitable, now or hereafter existing, and howsoever evidenced or
arising, in National Beef as a member thereof.


 


“National
Beef” means National Beef Packing Company, LLC, a Delaware limited
liability company.


 


“Obligations”
means the payment of all indebtedness and the performance of all obligations of
Pledgor to CoBank of every type and description, whether now existing or
hereafter arising, fixed or contingent, as primary obligor or as guarantor or
surety, acquired directly or by assignment or otherwise, liquidated or
unliquidated, regardless of how they arise or by what agreement or instrument
they may be evidenced, including without limitation all loans, advances and
other extensions of credit and all covenants, agreements, and provisions contained
in all loan and other agreements between the parties, including the Loan
Documents.


 


“Operating
Agreement” shall mean that certain Limited Liability Company Agreement of
National Beef dated as of August 6, 2003, as amended, modified or restated from
time to time.


 


“Uniform
Commercial Code” means the Uniform Commercial Code as in effect in the
State of Colorado from time to time.


 


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A Section is,
unless otherwise stated, a reference to a section hereof, as the case may be.
Section captions used in this Agreement are for convenience only, and shall not
affect the construction of this Agreement. The words “hereof,” “herein,” “hereto”
and “hereunder” and words of similar purport when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise defined therein, all terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
documents made or delivered pursuant hereto.


 


2.
      Grant of Security Interest.  For valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in order to
secure the payment and performance of all of the Obligations, Pledgor hereby
grants to CoBank a continuing security interest in all of its interest in the
Collateral, wherever located and whether existing now or hereafter arising or
acquired


 


TO HAVE AND TO HOLD
the Collateral, together with all rights, titles, interests, privileges and
preferences appertaining or incidental thereto, unto CoBank, and its successors
and assigns, forever, subject, however, to the terms, covenants and conditions
hereafter set forth.


 


3.         Representations,
Warranties and Covenants.


 


 



(a)       Pledgor represents and warrants to CoBank that: (i) CoBank has,
or when delivered to CoBank will have, a valid first perfected security
interest in the Collateral and the proceeds thereof free of all liens, claims
and rights of third parties whatsoever; (ii) all documentary, stamp or other
similar taxes or fees owing in connection with the issuance, transfer and/or
pledge of the Membership Interests have been paid and will hereafter be paid by
Pledgor as such become due and payable; (iii) Pledgor is the lawful owner of
the Collateral pledged by it hereunder, with full right to deliver, pledge,
assign and transfer such Collateral to the CoBank hereunder; (iv) the
Collateral represents all of Pledgor’s interests in National Beef; (v) neither
the members nor the managers of National Beef have declared, nor do any of
National Beef’s governance agreements expressly provide, that any ownership
interest in National Beef is a “security” under Section 8-103(c) (or similar
provision) of the Uniform Commercial Code of the state of its organization, (vi)
all of the Membership Interests are uncertificated; (vii) the execution and
delivery of this Agreement and the performance by Pledgor of its obligations
hereunder do not and will not contravene or conflict with any provision of law
or of any agreement binding upon or applicable to it or the Collateral and this
Agreement is its legal, valid and binding obligation, enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to the enforcement of creditors’ or secured creditors’ rights
generally and subject to the qualification that general equitable principles
may limit the availability of enforcement of certain remedies, including the
remedy of specific performance; (viii) if CoBank exercises its rights under
Section 6 hereof with respect to the Collateral, no approval or consent of any
person or entity, including, without limitation, any other member of National
Beef, which has not previously been obtained, is required for CoBank or its successors
and assigns to realize the full benefit and enjoyment and to exercise all
rights and privileges now or hereafter held by Pledgor in connection with the
Collateral.


 


 


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(b)       So long as the Obligations remain outstanding, Pledgor will,
unless CoBank shall otherwise consent in writing: (i) at its sole expense,
promptly deliver to CoBank, from time to time upon request of CoBank, such
documents, reasonably satisfactory in form and substance to CoBank, with
respect to the Collateral as CoBank may reasonably request, to preserve and
protect, and to enable CoBank to enforce, its rights and remedies hereunder;
(ii) (X) cause National Beef to note in the books and records of National Beef
the security interest granted to CoBank pursuant to this Agreement, (Y) cause
the members and the managers of National Beef to refrain from declaring and not
to allow any governance agreement of National Beef to expressly provide that
any such ownership interest is a “security” under Section 8-103(c) (or similar
provision) of the Uniform Commercial Code of the state of its organization, and
(Z) cause all of such interests to remain uncertificated; (iii) not sell,
assign, exchange or otherwise transfer any of its rights to any of the
Collateral; (iv) not create or suffer to exist any lien, security interest or
other charge, claim, right or encumbrance against, in or with respect to any of
the Collateral except for the pledge hereunder and the lien and security
interest created hereby; (v) not enter into any agreement or permit to exist
any restriction with respect to any of its right, title and interest in or to
the Collateral other than pursuant hereto; (vi) not take or fail to take any
action which would in any manner impair the enforceability of CoBank’s lien and
security interest in any of the Collateral; (vii) not consent to any amendment,
supplement, waiver or other modification of any of the terms or provisions
contained in, or applicable to, the Operating Agreement relating to the
Collateral which in any case is contrary to the terms of this Agreement or any
other Loan Document, could reasonably be expected to be adverse in any material
respect to the rights, interests or privileges of CoBank or its ability to
enforce the same, results in the imposition or expansion in any material
respect of any restriction or burden on Pledgor or CoBank, reduces in any
material respect any rights or benefits of Pledgor or CoBank or impairs the
Collateral.


(c)        In the event that Pledgor fails or refuses to perform any of its
obligations set forth herein, CoBank shall have the right, without obligation,
to do all things it deems necessary or advisable to discharge the same and any
sums paid by CoBank, or the cost thereof, including, without limitation,
attorneys’ fees, shall constitute a part of the Obligations secured hereby and
bear interest until paid at the interest rate then charged under the Loan
Agreement, and be secured by the Collateral; provided, however, that Pledgor
acknowledges and agrees that nothing contained herein shall obligate CoBank or
impose a duty upon CoBank to assume any duties or obligations of Pledgor with
respect to any of the Collateral.


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(d)       Upon any certification of the Membership Interests, Pledgor shall
hold such certificates as CoBank’s agent and in trust for CoBank as additional
Collateral and shall pledge and deliver to CoBank such certificates, along with
proper instruments of assignment duly executed by Pledgor and by such other
instruments or documents as CoBank or its counsel may reasonably request.


4.         Certain
Permitted Activities.


 



(a)      CoBank may, from time to time, and in accordance with the Loan
Agreement, without notice to Pledgor, take any or all of the following actions:
(i) retain or obtain a lien upon, or a security interest in, any property to
secure the Obligations or any obligation hereunder; (ii) retain or obtain the
primary or secondary obligation of any obligor or obligors, with respect to any
of the Obligations or any obligation hereunder; (iii) extend or renew for any
period (whether or not longer than the original period) or alter or exchange
any of the Obligations, or release or compromise any obligation of Pledgor or
any obligation of any nature of any other obligor with respect to any of the Obligations;
(iv) release or fail to perfect its lien upon or security interest in, or
impair, surrender, release or permit any substitution or exchange for,
all or any part of any property securing any of the Obligations or any
obligation hereunder, or create, extend or renew for any period (whether or not
longer than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property; and
(v) during the continuance of a Default, resort to the Collateral (without any
marshalling) for payment of any of the Obligations, whether or not CoBank (A)
shall have resorted to any other property securing any of the Obligations or
any obligation hereunder or (B) shall have proceeded against any other obligor
primarily or secondarily obligated with respect to any of the Obligations (all
of the actions referred to in preceding clauses (A) and (B) being hereby
expressly waived by Pledgor).


 



(b)     CoBank shall have no right to vote the Membership Interests or
other Collateral or give consents, waivers or ratifications in respect thereof
prior to the occurrence of a Default. During the continuance of a Default, Pledgor
shall have the right to vote any and all of the Membership Interests and other
Collateral pledged by it hereunder and give consents, waivers and ratifications
in respect thereof unless and until it receives notice from CoBank that
such right has been terminated.


 


(c)       Upon notice from CoBank to Pledgor, during the existence of a
Default and so long as that Default continues, all rights and powers that Pledgor
is entitled to exercise pursuant to Section 4(b) of this Agreement, and all
rights of Pledgor to receive and retain Distributions pursuant to Section 5 of
this Agreement, shall immediately cease, and all such rights and powers shall
automatically become vested in CoBank, which shall have, during the continuance
of the Default, the sole and exclusive authority to exercise such rights and
powers, in- accordance with the Loan Agreement, and to receive such dividends,
interest and payments. All money or other property, paid or delivered to CoBank
pursuant to this subsection, shall be additional Collateral hereunder.


 


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(d)
      Pledgor agrees to deliver (properly endorsed when required) to CoBank,
promptly upon request of CoBank, such documents as may be necessary for CoBank to
exercise its rights under Section 4(c) with respect to the Membership Interests
and other Collateral then or previously owned by Pledgor.


 



5.       Dividends, Distributions, etc.
CoBank shall
have no right to Distributions made on or in respect of the Collateral prior to
the occurrence of a Default. Upon a Default, and while same is continuing, and
in accordance with the Loan Agreement, Pledgor shall immediately upon demand by
CoBank, deliver to CoBank all Distributions made on or in respect of the
Collateral any time and from time to time.


 



6.        Default


 


(a)
      Upon the occurrence of a Default, and in accordance with the Loan
Agreement, CoBank may exercise from time to time any rights and remedies
available to it under the Uniform Commercial Code or otherwise available to it,
including, without limitation, sale, assignment, or other disposal of the
Collateral in exchange for cash or credit. If any notification of intended
disposition of any of the Collateral is required by law, such notification, if
mailed, shall be deemed reasonably and properly given if mailed at least ten
(10) days before such disposition, postage prepaid, addressed to Pledgor at any
address of Pledgor appearing on the records of CoBank. Any proceeds of any
disposition of Collateral shall be applied as provided in Section 7 hereof. No
rights and remedies of CoBank expressed hereunder are intended to be exclusive
of any other right or remedy, but every such right or remedy shall be
cumulative and shall be in addition to all other rights and remedies herein
conferred, or conferred upon CoBank under any other Loan Document or now or
hereafter existing at law or in equity or by statute. No delay on the part of CoBank
in the exercise of any right or remedy shall operate as a waiver
thereof, and no single or partial exercise by CoBank of any right or remedy
shall preclude other or further exercise thereof or the exercise of any other
right or remedy. No action of CoBank permitted hereunder shall impair or affect
the rights of CoBank in and to the Collateral.


 


(b)
      (i) The Pledgor agrees that, in any sale of any of the Collateral when a
Default shall have occurred and be continuing, CoBank is authorized to comply
with any limitation or restriction in connection with such sale as is necessary
in order to avoid any violation of applicable law (including, without
limitation, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and Pledgor further agrees that such compliance shall not result in such sale
being considered or deemed not to have been made in a commercially reasonable
manner, nor shall CoBank be liable nor accountable to Pledgor for any
reasonable discount allowed by the reason of the fact that such Collateral is
sold in compliance with any such limitation or restriction.

 

 


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(ii)        Pledgor
further agrees, after a Default shall have occurred and be continuing, and upon
written request from CoBank, to (A) deliver to CoBank such information in Pledgor’s
possession or control as CoBank shall reasonably request for inclusion in any
offering memorandum or in any preliminary offering memorandum or any amendment
or supplement to any thereof or in any other writing prepared in connection
with the offer, sale or resale of all or any portion of such Membership
Interests or other Collateral, which information shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated or necessary to make such information not misleading, and (B) do or
cause to be done all such other acts and things as may be necessary to make
such offer, sale or resale of all or any portion of such Membership Interests
or other Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees or awards of
any and all courts, arbitrators or governmental agencies or instrumentalities,
domestic or foreign, having jurisdiction over any such offer, sale or resale.


 


Without limiting
the foregoing paragraph, if CoBank decides to exercise its right to sell all or
any of the Membership Interests or other Collateral, upon written request, Pledgor
shall furnish or cause to be furnished to CoBank all such information as CoBank
may request in order to qualify such Membership Interests or other Collateral
as exempt securities, or the sale or resale of such Membership Interests or
other Collateral as exempt transactions, under federal and state securities
laws. To the extent it is within their control, Pledgor agrees to allow CoBank
and any underwriter access at reasonable times and places to the books, records
and premises of National Beef; Pledgor further agrees to assist CoBank, any
underwriter, any agent of any thereof, and any counsel, accountant or other
expert for any thereof, in inspection, evaluation, and any other “due diligence”
action of or with respect to any such books, records and premises; and Pledgor
further agrees to cause any independent public accountant for National Beef to
furnish a letter to CoBank and underwriters in customary form and covering
matters of the type customarily covered by letters of accountants for issuers
to underwriters.


 


Nothing herein
shall be construed to be Pledgor’s consent to, or any obligation to undertake,
a public offering of any pledged securities.


 


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(c)      Except for payments made by Pledgor in accordance with the Loan
Agreement, all items or amounts, which are received by CoBank from Pledgor or
any other party on account of partial or full payment or otherwise as proceeds
of any of the Collateral shall be deposited to the credit of a deposit account
(the “Assignee Deposit Account”) of Pledgor with CoBank, as
security for payment of the Obligations. During the continuance of a Default, Pledgor
shall have no right to withdraw any funds deposited in the Assignee Deposit
Account. CoBank may, from time to time, in its discretion, and shall upon
request of Pledgor made not more than once in any week, apply all or any of the
then. balance, representing collected funds, in the Assignee Deposit
Account, in accordance with Section 7 hereof, and CoBank may, from time to
time, in accordance with the Loan Agreement, release all or any of such
balance to Pledgor.


 


(d)      For the purpose of carrying out the terms of this Agreement, Pledgor
appoints CoBank, or any other person whom CoBank may designate, as attorney in
fact, effective from the occurrence and during the continuance of any Default
hereunder, with power to take any and all actions and to execute any and all
documents and instruments that may, in the judgment of CoBank, be necessary or
desirable to accomplish the purposes of this Agreement, including but not limited
to the power to endorse Pledgor’s name on any check, note, acceptance, money
order, draft, other form of payment, security or other document and to do any
and all things necessary to carry out the purposes of this Agreement.  Pledgor
ratifies and approves all acts of such attorney.  Neither CoBank nor any other
person or entity designated by it as attorney hereunder will be liable for any
act or omission nor for any error of judgment or mistake of facts or law.  This
power, being coupled with an interest, is irrevocable until this Agreement is
terminated as herein provided.


 


7.
       Application of Proceeds. The proceeds of the sale
of Collateral sold pursuant to the terms of Section 6 hereof; or, after a
Default, the cash held as Collateral hereunder, whether or not deposited in the
Assignee Deposit Account, shall be applied by CoBank as follows:


 


First:
to the Obligations in accordance with the Loan Agreement;


 


Second: the
balance, if any, of such proceeds shall be held by CoBank until this Agreement
shall terminate pursuant to Section 14, and if any proceeds shall then remain,
such proceeds shall be paid to Pledgor or such other person as may be entitled
thereto, their successors and assigns, or as a court of competent jurisdiction
in any pending proceeding may direct.


 



8.       Nature of Obligations. Pledgor
acknowledges and agrees that Pledgor shall be liable for the Obligations. Pledgor
represents and warrants to CoBank at all times that the extension of credit
under the Loan Agreement to Pledgor directly or indirectly confers a material
benefit on Pledgor.


 



9.       No Marshalling. To the extent CoBank
holds a security interest in other assets or interests of Pledgor, nothing
contained herein shall require CoBank to proceed against any security interest
in any of the assets or interests of Pledgor prior to enforcing its rights
against the Collateral.


 


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10.     Indemnity. Pledgor shall indemnify,
defend and hold harmless CoBank and its agents, officers and employees, and
every attorney appointed pursuant to this Agreement (a) in respect of all
liabilities and reasonable expenses incurred by them in good faith in the
execution or purported execution of any rights, powers or discretions vested in
them pursuant to this Agreement, and (b) for any losses arising in connection
with the exercise or purported exercise of any of their rights, powers and
discretions hereunder except that CoBank will be liable for any liabilities,
expenses and losses which arise as a result of its own willful misconduct or
gross negligence.


 



11.     Filing as a Financing Statement. CoBank
shall be authorized to execute and file such UCC financing statements and other
documents (in all public offices reasonably deemed necessary or appropriate by CoBank),
and Pledgor shall do such other acts and things, all as CoBank may from time to
time request, to establish and maintain a valid, perfected security interest in
the Collateral to secure the payment of the Obligations.


 



12.      Notices.  All notices hereunder shall
be deemed to be duly given upon delivery in the form and manner set forth in
Section 17 of the MLA to the parties at the addresses set forth in Section 17
of the MLA, as the same may be updated as provided therein.


 



13.     Amendments. No amendment, modification
or waiver of, or consent with respect to, any provision of this Agreement shall
in any event be effective unless the same shall be in writing and signed and
delivered by CoBank and Pledgor. Any waiver of any provision of this Agreement,
and any consent to any departure by Pledgor from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which given.


 



14.     Termination of Agreement. Pledgor agrees
that its pledge hereunder shall, unless sooner terminated by CoBank
(notwithstanding, without limitation, that at any time or from time to time all
Obligations may have been paid in full) terminate only when the Obligations
(including, without limitation, any and all extensions or renewals of any
thereof, any and all interest on any thereof, and any and all expenses incurred
by CoBank in seeking to collect any of the Obligations and to collect or
enforce any rights under the Collateral) have been satisfied in full and all
other obligations of Pledgor hereunder and thereunder have been fully
performed, at which time CoBank shall reassign and redeliver (or cause to be
reassigned and redelivered) to Pledgor, or to such Person or Persons as such Pledgor
shall designate, such of the Collateral (if any) pledged hereunder by Pledgor
as shall not have been sold or otherwise applied by CoBank pursuant to the
terms hereof and shall still be held by it hereunder, together with appropriate
instruments of reassignment and release. Any such reassignment pursuant to the
foregoing provisions shall be without recourse upon, or representation or
warranty by, CoBank.


 



15.     Severability. Any provision in this
Agreement that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of this Agreement are declared to
be severable.


 


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16.      Successors and Assigns. The terms and
provisions of this Agreement shall be binding upon and inure to the benefit of Pledgor
and CoBank and their respective successors and permitted assigns, except that
(a) Pledgor shall not have the right to assign its rights or obligations under
this Agreement and (b) any assignment by CoBank must be made in compliance with
the Loan Agreement.


 



17.      CHOICE OF LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD
TO THE CONFLICT OF
LAWS PROVISIONS) OF THE STATE OF COLORADO, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.


 



18.     WAIVER OF JURY TRIAL. PLEDGOR AND COBANK HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP
ESTABLISHED HEREUNDER.


 



19.     CONSENT TO JURISDICTION.
PLEDGOR HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR COLORADO
STATE COURT SITTING IN DENVER, COLORADO IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT AND PLEDGOR HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF COBANK TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY PLEDGOR AGAINST COBANK OR ANY
AFFILIATE OF COBANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT SHALL BE BROUGHT
ONLY IN A COURT IN DENVER, COLORADO.


 



20.     Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart.  This Agreement shall be effective upon execution by Pledgor
and CoBank.


 



21.     Miscellaneous. (a) Except as provided
herein, Pledgor hereby expressly waives: (i) notice of the acceptance by CoBank
of this Agreement, (ii) notice of the existence or creation or non-payment of
all or any of the Obligations, (iii) presentment, demand, notice of dishonor,
protest, and all other notices whatsoever, and (iv) all diligence in defense,
collection or protection of or realization upon the Obligations, any obligation
hereunder, or any security for or guaranty of any of the foregoing.


 


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(b)   No
action of CoBank permitted hereunder shall in any way affect or impair the
rights of CoBank and the obligations of Pledgor under this Agreement. The Pledgor
hereby acknowledges that there are no conditions to the effectiveness of this
Agreement.


 


(c)   
All obligations of Pledgor and rights of CoBank expressed in this
Agreement shall be in addition to and not in limitation of those provided in
applicable law or in any other written instrument or agreement relating to any
of the Obligations.


 


(d)   Pledgor
shall reimburse CoBank for all costs and expenses incurred by CoBank (including
attorneys’ fees and disbursements) to:  (i) commence, defend or intervene in
any court proceeding relating to the Collateral, this Agreement or any of the
other Loan Documents; (ii) file a petition, complaint, answer, motion or other
pleadings, or to take any other action in or with respect to any suit or
proceeding (bankruptcy or otherwise) relating to the Collateral, this Pledge
Agreement or any of the other Loan Documents; (iii) protect, collect, lease,
sell, or liquidate any of the Collateral; (iv) attempt to enforce any security
interest in any of the Collateral or to seek any advice with respect to such
enforcement; and (v) enforce any of CoBank’s rights to collect any of the
Obligations.  


 


IN WITNESS WHEREOF, this Agreement has been duly executed as of
the day and year first above written.

 

 



		

U.S. PREMIUM
BEEF, LLC


			
	

 


			
	

 


			
	

By:                                                              


			
	

Name:                                                         


			
	

Its:                                                               


			
	

 


			
	

 


			
	

COBANK, ACB


			
	

 


			
	

 


			
	

By:                                                              


			
	

Name:                                                         


			
	

Its:                                                               


			





 

 

 


11


 










 






 


 


 


 


BOARD OF
MANAGERS CONSENT


 


 


The undersigned, on behalf of the Board of Managers
(as defined in the Operating Agreement) of National Beef, hereby acknowledges
the foregoing Pledge Agreement, consents to the pledge of the Collateral by
Pledgor, and shall cause National Beef to duly make a notation in its books and
records that the Collateral has been pledged to CoBank and that CoBank has a
first priority security interest therein.


 


In addition, the undersigned agrees to cause National
Beef to comply exclusively with instructions originated by CoBank in accordance
with the Loan Documents and Pledge Agreement with respect to the Collateral
without further consent of the Pledgor.  The undersigned acknowledges that
CoBank or any purchaser of the Collateral may become the owner of the
Collateral if CoBank exercises its rights and remedies under the Pledge
Agreement.


 


IN WITNESS WHEREOF, the undersigned has caused this Consent to be executed and delivered
as of the date set forth next to his signature.


 


 



		

By:                                                      



			
	

Name:                                                 



			
	

Title:
Chairman of the Board of Managers


			
	

Date:                                                   



			




 

 

 

 

 

 

12


 










 






 


 


 


 


SCHEDULE A TO


PLEDGE AGREEMENT


 


 


 


	
  Name of Pledgor

  	
  Percentage Undivided Membership Interest in National Beef

  
	
  U.S. PREMIUM BEEF, LLC	
  Class A
  ($)	
  $94,680,681 	
   
	
   	
  Class A-1 ($)
  	
  $55,841,342 	
   
	
   	
  Class B-1 ($)	
  $10,664,475 	
   
	
   	
  Class B-1
  (%)	
  69.334%	
   
	
   

  	
   

   

   

   

  



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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