Document:

Exhibit 10.2

 

FORM OF

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is entered into as of
[                
    ], 2010 by and among National Beef, Inc., a
Delaware corporation (the “National Beef”), U.S. Premium Beef, LLC, a
Delaware limited liability company (“USPB”), TKK Investments, LLC, a
Missouri limited liability company (“TKK”), TMKCo, LLC, a Missouri
limited liability company (“TMKCo”, and together with TKK, the “Klein
Entities”), and NBPCo Holdings, LLC, a South Dakota limited liability
company (“NBPCo” and together with USPB and the Klein Entities, the “Founding
Members”). National Beef, the Founding Members and National Beef Packing
Company, LLC (“NBP LLC”) are parties to the Amended and Restated Limited
Liability Company Agreement of NBP LLC, dated
[                
    ], 2010 (the “NBP LLC Operating Agreement”).

 

The
parties agree as follows:

 

1.                Defined Terms;
Interpretation.

 

(a) Defined
Terms. The following terms shall have the following meanings in this
Agreement:

 

“Adverse
Effect” has the meaning set forth in Section 2(a)(vi) of this
Agreement.

 

“Affiliate”
has the meaning set forth in the NBP LLC Operating Agreement.

 

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

 

“Board”
means the Board of Directors of National Beef.

 

“Business
Day” means a day other than a Saturday, Sunday, federal holiday or other
day on which commercial banks in New York, New York are authorized or required
by law to close.

 

“CEO”
means the Chief Executive Officer of National Beef.

 

“CFO”
means the Chief Financial Officer of National Beef.

 

“Common
Stock” shall mean National Beef’s Class A Common Stock, par value
$0.01 per share, and any securities into which such shares may hereinafter be
reclassified.

 

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

 

“Control”
(including the terms “Controlled by” and “under common Control with”), with
respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or
otherwise.

 

 

“Demand
Party” has the meaning set forth in Section 2(a)(i) of this
Agreement.

 

“Demand
Registrable Securities” has the meaning set forth in Section 2(a)(i)(1) of
this Agreement.

 

“Director”
means a member of the Board.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, as the same may be amended from time to
time.

 

“Exchange
Agreement” means the Exchange Agreement, dated as of
[                
    ], 2010, among National Beef and each of the Founding
Members pursuant to which each Founding Member has the right to exchange its
membership units in NBP LLC for shares of Common Stock, cash or a combination
thereof under certain circumstances.

 

“FINRA”
means the Financial Industry Regulatory Authority, Inc.

 

“Founding
Members” has the meaning set forth in the preamble of this Agreement.

 

“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.

 

“Group”
has the meaning set forth in Section 13(d)(3) and Rule 13d-5 of
the Exchange Act.

 

“IPO”
means an initial primary sale by National Beef of shares of Common Stock to the
public in an offering pursuant to an effective registration statement (other
than a registration statement on Form S-4 or S-8 or any similar or
successor form) filed under the Securities Act, so that after giving effect to
such offering, such shares of Common Stock are listed on one or more nationally
recognized exchanges or quoted on one or more automated quotation systems,
including the NYSE or NASDAQ, respectively.

 

“Klein
Entities” has the meaning set forth in the preamble of this Agreement.

 

“LLC
Act” means the Delaware Limited Liability Company Act, 6 Del.C.
§§ 18-101, et seq., as it may be amended from time to time,
and any successor to such statute.

 

“Losses”
has the meaning set forth in Section 2(f)(i) of this Agreement.

 

“Member
Registrable Securities” has the meaning set forth in Section 2(a)(i)(2) of
this Agreement.

 

“NASDAQ”
has the meaning set forth in Section 2(c)(viii) of this Agreement.

 

“NBP
LLC” has the meaning set forth in the preamble of this Agreement.

 

“NBP
LLC Operating Agreement” has the meaning set forth in the preamble of this
Agreement.

 

2

 

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

 

“NYSE”
has the meaning set forth in Section 2(c)(viii) of this Agreement.

 

“Officer”
means a person designated as an officer of National Beef by the Board or the
CEO.

 

“Other
Holder Registrable Securities” has the meaning set forth in
Section 2(a)(i)(4) of this Agreement.

 

“Person”
means any individual, corporation, limited liability company, partnership,
trust, joint stock company, business trust, unincorporated association, joint
venture, Governmental Authority or other entity or organization of any nature
whatsoever or any Group of two or more of the foregoing.

 

“Registrable
Securities” mean the Shares. As to any particular Registrable Securities,
such Shares shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such Shares shall have
become effective under the Securities Act and such Shares shall have been
disposed of in accordance with such registration statement, (ii) such
Shares may be sold without restrictions (including volume and manner of sale
restrictions) pursuant to Rule 144, (iii) such Shares are transferred
and the subsequent disposition of such Shares do not require registration under
the Securities Act or (iv) such Shares shall have ceased to be
outstanding.

 

“Registration
Expenses” means any and all reasonable expenses of National Beef incident
to performance of or compliance with Sections 2(a), 2(b) and 2(c),
including (i) all SEC and stock exchange or automated quotation system or
FINRA registration, filing and listing fees, (ii) all fees and expenses of
complying with state securities or blue sky laws (including fees and
disbursements of counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all printing, word
processing, duplication, messenger and delivery expenses, (iv) all fees
and expenses incurred in connection with the listing of the Registrable Securities
on any stock exchange or automated quotation system pursuant to this Agreement,
(v) the fees and disbursements of counsel for National Beef, (vi) the
reasonable fees and disbursements of independent public accountants to National
Beef, including the expenses of any “cold comfort” letters required by or
incident to the transactions contemplated by this Agreement, and (vii) all
reasonable expenses incurred in connection with any road shows.

 

“Registration
Indemnified Parties” has the meaning set forth in Section 2(f)(i) of
this Agreement.

 

“Rule 144”
means Rule 144 (or any successor provision), as the same may be amended
from time to time, under the Securities Act.

 

“SEC”
means the U.S. Securities and Exchange Commission or any other federal agency then
administering the Securities Act or the Exchange Act and other federal
securities law.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as the same may be amended from time to
time.

 

3

 

“Shares”
means the shares of Common Stock issued to any Founding Member pursuant to the
exercise by such Founding Member of its exchange rights under the Exchange
Agreement, including any shares of Common Stock issued in connection with a
stock split, distribution, reclassification, recapitalization or otherwise in
respect of such shares.

 

“Subsidiary”
means, with respect to any Person, (i) a corporation a majority of whose
capital stock with the general voting power under ordinary circumstances to
vote in the election of directors of such corporation (irrespective of whether
or not, at the time, any other class or classes of securities shall have, or
might have, voting power by reason of the happening of any contingency) is at
the time beneficially owned by such Person, by one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries thereof or (ii) any
other Person (other than a corporation), including a joint venture, a general
or limited partnership or a limited liability company, in which such Person,
one or more Subsidiaries thereof or such Person and one or more Subsidiaries
thereof, directly or indirectly, at the date of determination thereof,
beneficially own at least a majority ownership interest entitled to vote in the
election of directors, managers or trustees thereof (or other Persons
performing such functions) or act as the general partner or managing member of
such other Person.

 

“Third
Party Holder” has the meaning set forth in Section 2(b)(i) of
this Agreement.

 

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

 

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

 

“Transaction
Delay Notice” has the meaning set forth in Section 2(a)(vii)(1) of
this Agreement.

 

“Transfer”
(including the term “Transferred”) means, directly or indirectly, to
sell, transfer, give, exchange, bequest, assign, pledge, encumber, hypothecate
or otherwise dispose of, either voluntarily or involuntarily (including upon
the foreclosure under any pledge or hypothecation permitted below that results
in a change in title), any Equity Interests in National Beef or other assets
beneficially owned by a Person or any interest in any Equity Interests in
National Beef or other assets beneficially owned by a Person. Notwithstanding
the foregoing: a bona fide pledge of the Shares or other Equity Interests by
any Member or its Affiliates shall not be deemed to be a Transfer hereunder.

 

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

 

(b) Other
Definitional Provisions; Interpretation.

 

(i) The
words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement will refer to this Agreement as a whole, including the
Exhibits and Schedules attached hereto, and not to any particular provision of
this Agreement. Articles, section and subsection references are to this
Agreement unless otherwise specified.

 

(ii) The
words “include” and “including” and words of similar import when used in this
Agreement shall be deemed to be followed by the words “without limitation”.

 

4

 

(iii) The
titles and headings in this Agreement are included for convenience of reference
only and will not limit or otherwise affect the meaning or interpretation of
this Agreement.

 

(iv) The
meanings given to capitalized terms defined herein will be equally applicable
to both the singular and plural forms of such terms, Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.

 

2.                Registration
Rights and Procedures.

 

(a) Registration
on Request of Founding Members.

 

(i) Request.  Subject to the terms and conditions of this
Agreement, at any time after the expiration of any underwriter lock-up period
applicable to the Founding Members in connection with the IPO, a Founding
Member (the “Demand Party”) may request in writing that National Beef
effect the registration for resale under the Securities Act of such Demand
Party’s Demand Registrable Securities. 
Any such request will specify (a) the number of Registrable
Securities proposed to be sold and (b) the intended method of disposition
thereof.  Subject to the other provisions
of this Section 2(a), National Beef shall promptly give written notice of
such requested registration to all other Founding Members, and thereupon will,
as expeditiously as reasonably practicable, use its reasonable best efforts to
effect the registration under the Securities Act of:

 

(1) the Registrable Securities which National Beef has been so
requested to register by the Demand Party (“Demand Registrable Securities”);

 

(2) all other Registrable Securities which National Beef has been
requested to register by any other Founding Member thereof on a pro rata basis
by written request given to National Beef within 10 days after the giving
of such written notice by National Beef (which request shall specify the amount
and intended method of disposition of such Registrable Securities), all to the
extent necessary to permit the disposition (in accordance with the intended
method thereof as aforesaid) of the Registrable Securities so to be registered
(“Member Registrable Securities”);

 

(3) any newly issued or treasury shares of Common Stock which
National Beef seeks to have included in such registration (“Company
Registrable Securities”); and

 

(4) all shares of Common Stock which have been requested to be
included by holders of Common Stock other than the Founding Members (“Other
Holder Registrable Securities”).

 

(ii) Limits
on Registration Requests.  In no
event shall National Beef be required to effect a registration pursuant to this
Section 2(a) unless the number of Demand Registrable Securities
requested by the Demand Party constitutes or represents the equivalent of (on a
one-for-one basis) at least 5% of the aggregate number of membership units of
NBP LLC outstanding (including the membership units held by National Beef and
the membership units held by all Founding Members and taking into account the
effect of any stock or unit splits or similar distributions in respect of the
Shares or the membership units) on the date hereof (or, in the event that any
over-allotment option granted to the underwriters of the IPO is exercised in
whole or in 

 

5

 

part,
immediately following the closing of the final exercise of such option);
provided, however, that in the case of any request for registration by the
Klein Entities, this condition shall be satisfied if the number of Demand
Registrable Securities requested by the Klein Entities is the lesser of (x) 5%
of such aggregate number of membership units of NBP LLC or (y) all the
Registrable Securities held by the Klein Entities assuming that the Klein
Entities had exchanged pursuant to the Exchange Agreement all of the membership
units of NBP LLC held by the Klein Entities. 
In addition, in no event shall National Beef be obligated to file a
registration statement relating to any registration request under this
Section 2(a) within a period of 180 days after the effective date of
any other registration statement relating to any registration request under
this Section 2(a) or to any registration effected under
Section 2(b).  The Founding Members
shall be entitled to request no more than the following number of registrations
pursuant to Section 2(a)(i): the Klein Entities (one request), NBPCo (two
requests) and USPB (five requests).

 

(iii) Expenses.  National Beef will pay all Registration
Expenses in connection with registrations pursuant to this Section 2(a).

 

(iv) Effective
Registration Statement.  A
registration requested pursuant to this Section 2(a) will not be
deemed to have been effected:

 

(1) unless a registration statement with respect thereto has
become effective and remained effective in compliance with the provisions of
the Securities Act until the earlier of (x) such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition thereof set forth in such registration statement or
(y) 45 days after the effective date of such registration statement; provided,
however, that if the failure of any such registration statement to
become or remain effective in compliance with this Section 2(a)(iv)(1) is
due solely to acts or omissions of the applicable Demand Party, such
registration requested pursuant to this Section 2(a) will be deemed
to have been effected; or

 

(2) if, after it has become effective, the registration statement
is subject to any stop order, injunction or other order or requirement of the
SEC or other governmental agency or authority prohibiting the sale of Demand
Registrable Securities pursuant to such registration statement, other than by
reason of an act or omission on the part of the Demand Party.

 

(v) Underwritten
Offering.  At the election of the
Demand Party, a requested registration pursuant to this Section 2(a) may
involve an underwritten offering, and, in such case, the lead or managing
underwriter or underwriters shall be selected by the Demand Party in
consultation with other holders of Registrable Securities being included in
such registration pursuant to Section 2(a); provided, however,
that such lead or managing underwriter or underwriters shall be reasonably
satisfactory to National Beef.

 

(vi) Priority
in Requested Registrations.  If a
requested registration pursuant to this Section 2(a) involves an
underwritten offering and the lead or managing underwriter advises National
Beef in writing that, in its opinion, the number of securities to be included
in such registration would be likely to have an adverse effect on the price,
timing or distribution of the securities to be offered in such offering as
contemplated by the Founding Members (an “Adverse Effect”), then
National Beef shall include in such registration all Registrable Securities and
shares of Common Stock that the lead or managing underwriter believes can be
sold in such 

 

6

 

offering
without having an Adverse Effect allocated in the following order of priority:
(a) first, all Demand Registrable Securities; (b) second,
all Member Registrable Securities, if any, held by any other Founding Member;
(c) third, all Company Registrable Securities; and (d) fourth,
all Other Holder Registrable Securities. 
If such lead or managing underwriter advises National Beef that only a
portion of the Registrable Securities or shares of Common Stock in any of
clauses (a) through (d) above may be included in such
registration without such Adverse Effect, National Beef shall include the
Registrable Securities and shares of Common Stock from the holders of
Registrable Securities in such clause on a pro rata basis based on the relative
number of Registrable Securities then held by each such holder who has
requested that securities owned by them be so including in a registration (provided
that any such amount thereby allocated to any such holder that exceeds such
holder’s request shall be reallocated among the remaining requesting holders in
a like manner).

 

(vii) Postponements
in Requested Registrations.

 

(1)  If, upon receipt of a registration request, National Beef
shall furnish to the Demand Party a certificate signed by an Officer of
National Beef (the “Transaction Delay Notice”) stating that National
Beef has pending or in process a material transaction or a material development
which National Beef has a bona fide business purpose in keeping confidential
and that the filing of a registration statement would require disclosure of
such material transaction or material development, then National Beef shall not
be required to comply with its obligations under Section 2(a)(i) until
180 days after the Demand Party’s receipt of such notice.

 

(2)  Notwithstanding the foregoing provisions of this
Section 2(a)(vii), National Beef shall be entitled to serve only one
Transaction Delay Notice within any period of 365 consecutive days.

 

(viii) 
No Shelf Registration Statements. 
National Beef shall not be required, in response to any request for
registration under Section 2(a) hereunder, to file or maintain a
shelf registration statement under Rule 415 under the Securities Act, or
any similar or successor provision.

 

(ix) Additional
Rights. National Beef shall not grant to any other holders of shares of
Common Stock (or securities that are convertible, exchangeable or exercisable
into shares of Common Stock) any rights to request National Beef to effect the
registration under the Securities Act of any such shares on terms more
favorable to such holders than the terms set forth in this Section 2(a).

 

(b) Incidental
Registrations.

 

(i) Right
to Piggyback.  If National Beef or
any other Person that has demand registration rights (a “Third Party Holder”)
at any time after the expiration of any underwriter lock-up period applicable
to the IPO proposes to register shares of Common Stock under the Securities Act
(other than a registration on Form S-4 or S-8, or any successor or other
forms promulgated for similar purposes), whether or not for sale for its own
account, in a manner which would permit registration of Registrable Securities
for sale to the public under the Securities Act, National Beef will, at each
such time, give prompt written notice to the Founding Members of its intention
to do so and of the Founding Members’ rights under this Agreement. Upon the
written request of any Founding Member made within 10 days after the
receipt of any 

 

7

 

such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such Founding Member), National Beef will use its reasonable
best efforts to effect the registration under the Securities Act of all
Registrable Securities which National Beef has been so requested to register by
the Founding Members; provided, however, that (a) if, at any
time after giving written notice of its intention to register any securities
and prior to the effective date of the registration statement filed in
connection with such registration, National Beef or such Third Party Holder
shall determine for any reason not to proceed with the proposed registration of
the securities to be sold by it, National Beef may, at its election, give
written notice of such determination to each Founding Member and, thereupon,
shall be relieved of its obligation to register any Registrable Securities in
connection with such terminated registration, and (b) if such registration
involves an underwritten offering, all Founding Members requesting to be
included in National Beef’s or such Third Party Holder’s registration shall
enter into an agreement with the underwriters to sell their Registrable
Securities to the underwriters selected by National Beef or such Third Party
Holder on substantially the same terms and conditions as apply to National Beef
or such Third Party Holder, with such differences, including any with respect
to indemnification and liability insurance, as may be customary or appropriate
in combined primary and secondary offerings. 
The registrations provided for in this Section 2(b) are in
addition to, and not in lieu of, registrations made in accordance with
Section 2(a).

 

(ii) Expenses.  National Beef will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 2(b).

 

(iii) Priority
in Incidental Registrations.  If a
registration pursuant to this Section 2(b) involves an underwritten
offering and the lead or managing underwriter advises National Beef in writing
that, in its opinion, the number of Registrable Securities and shares of Common
Stock requested to be included in such registration would be likely to have an
Adverse Effect on such offering, then National Beef shall include in such
registration: (a) first, 100% of the securities which National Beef
or the Third Party Holder proposes to sell; (b) second, the number
of Registrable Securities which the Founding Members have requested to be
included in such registration; and (c) third, the number of shares
of Common Stock which any other holders of Common Stock have requested to be
included in the registration.  If such
lead or managing underwriter advises National Beef that only a portion of such
Registrable Securities or shares of Common Stock in clauses (b) or (c) may
be included in such registration without such Adverse Effect, National Beef
shall include Registrable Securities and shares of Common Stock from the
holders of such securities in such clauses on a pro rata basis based on the
relative amount of Registrable Securities or shares of Common Stock then held
by each such holder (provided, that any such amount thereby allocated to
any such holder that exceeds such holder’s request shall be reallocated among
the remaining requesting holders in like manner).

 

(c) Registration
Procedures.  If and whenever National
Beef is required to use its reasonable best efforts to cause the registration
of any Registrable Securities under the Securities Act as provided in this
Agreement, National Beef will, as expeditiously as reasonably practicable:

 

(i) (A) with
respect to any registration under Section 2(a), prepare and, in any event
within 45 days of the date on which National Beef first received a request
from a Demand Party pursuant to Section 2(a)(i), file with the SEC a
registration statement with respect to such Registrable Securities and use its
reasonable best efforts to cause such registration statement to 

 

8

 

become
effective within 120 days of the initial filing, and (B) with respect
to any registration under Section 2(b) and subject to National Beef’s
rights set forth in Section 2(b), use its reasonable best efforts to file
with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective within 120 days of the initial filing; provided,
however, that before filing a registration statement or prospectus or
any amendments or supplements thereto, National Beef will furnish to the
holders holding Registrable Securities included in such registration statement,
the counsel for the holders of the Registrable Securities being registered and
the lead or managing underwriters, if any, copies of all such documents
proposed to be filed.  National Beef will
not file any such registration statement or amendment thereto or any prospectus
or any supplement thereto (excluding such documents that, upon filing, will be
incorporated or deemed to be incorporated by reference therein) without
providing such holders, such counsel and any such lead or managing underwriter
a reasonable opportunity to comment on such documents;

 

(ii) prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as National Beef may
determine to be necessary to keep such registration statement effective in
accordance with Section 2(a) and to comply with the provisions of the
Securities Act and the Exchange Act; provided, however, that
before filing any amendments or supplements thereto in accordance with
Section 2(c)(i) or this Section 2(c)(ii), National Beef will
furnish to counsel for the holders of the Registrable Securities being
registered copies of all documents proposed to be filed and provide such
counsel with a reasonable opportunity to comment on such documents;

 

(iii) furnish
to each holder of Registrable Securities being registered such number of copies
of the prospectus included in such registration statement (including each
preliminary prospectus), in conformity with the requirements of the Securities
Act, as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities by such holder;

 

(iv) use
its reasonable efforts to register or qualify such Registrable Securities
covered by such registration in such jurisdictions as each holder of
Registrable Securities being registered shall reasonably request, and do any
and all other acts and things which may be reasonably necessary or advisable to
enable such holder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such holder, except that National Beef shall
not for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction where, but for the requirements of this
Section 2(c)(iv), it would not be obligated to be so qualified, to subject
itself to taxation in any such jurisdiction or to consent to general service of
process in any such jurisdiction;

 

(v) notify
each holder of any such Registrable Securities covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of National Beef’s becoming aware that the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and at the request
of any such holder, prepare and furnish to such holder a reasonable number of
copies of an amended or supplemental prospectus as may be necessary so that, as
thereafter delivered to the holders of such Registrable Securities, such
prospectus shall not include an untrue statement of a material 

 

9

 

fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing;

 

(vi) otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC and make available to its security holders, as soon as
reasonably practicable (but not more than 18 months) after the effective
date of the registration statement, an earnings statement which shall satisfy
the provisions of Section 11(a) of the Securities Act;

 

(vii) use
its reasonable best efforts to cause all Registrable Securities covered by such
registration statement to be (a) listed on each stock exchange or
automated quotation system, if any, on which securities issued by National Beef
of the same class are then listed or, if no such securities issued by National
Beef are then so listed, on the New York Stock Exchange (the “NYSE”) or
another nationally stock exchange, if the securities qualify to be so listed or
(b) on the Nasdaq Stock Market of the Nasdaq National Market (“NASDAQ”)
or another nationally recognized automated quotation system, if the securities
qualify to be so quoted;

 

(viii) enter
into such customary agreements (including an underwriting agreement in
customary form), which may include indemnification provisions in favor of
underwriters and other Persons in addition to or in substitution for the
provisions of Section 2(f) hereof, and take such other customary
actions as sellers of a majority of shares of such Registrable Securities or
the underwriters, if any, reasonably request in order to expedite or facilitate
the disposition of such Registrable Securities;

 

(ix) use
reasonable best efforts to obtain a “cold comfort” letter or letters from
National Beef’s independent public accountants in customary form and covering
matters of the type customarily covered by “cold comfort” letters as the
holders of a majority of shares of such Registrable Securities shall reasonably
request;

 

(x) make
available for inspection by any holder of such Registrable Securities covered
by such registration statement, by any underwriter participating in any
disposition to be effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such holder or any such
underwriter, any pertinent financial and other records, pertinent corporate
documents and properties of National Beef as reasonably requested by any such
seller, underwriter, attorney, accountant or agent in connection with customary
due diligence performed for a public offering of such Registrable Securities;

 

(xi) promptly
notify counsel for the holders of Registrable Securities included in such
registration statement and the managing underwriter (a) when the
registration statement, or any post-effective amendment to the registration
statement, shall have become effective, or any supplement to the prospectus or
any amendment to the prospectus shall have been filed, (b) of the receipt
of any comments from the SEC relating to such registration statement,
(c) of any request of the SEC to amend the registration statement or amend
or supplement the prospectus and (d) of the issuance by the SEC of any stop
order suspending the effectiveness of the registration statement or of any
order preventing or suspending the use of any prospectus, or of the suspension
of the qualification of the registration statement for offering or sale in any
jurisdiction, or of the institution or threatening of any proceedings for any
of such purposes;

 

(xii) cooperate
with the holders of Registrable Securities covered by the registration
statement and the managing underwriter if any, to facilitate the timely
preparation

 

10

 

and
delivery of any certificates representing securities to be sold under the
registration statement, and enable such securities to be in such denominations
and registered in such names as the managing underwriter or agent, if any, or
such holders may request;

 

(xiii) use
its reasonable best efforts to obtain for delivery to the holders of
Registrable Securities being registered and to the underwriter an opinion or
opinions from counsel for National Beef in customary form and in form,
substance and scope reasonably satisfactory to such holders, underwriters or
agents and their counsel; and

 

(xiv) cooperate
with each holder of Registrable Securities being registered and each
underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made
with the NYSE, NASDAQ or any other stock exchange or automated quotation system
and FINRA.

 

(d) Information
Supplied.  National Beef may require
each holder of Registrable Securities being registered to furnish National Beef
with such information regarding such holder and pertinent to the disclosure
requirements relating to the registration and the distribution of such
securities as National Beef may from time to time reasonably request in
writing.  National Beef shall not be
required to include in any registration statement any Registrable Securities of
any holder which does not provide such information.

 

(e) Restrictions
on Disposition.  Each Founding Member
agrees that, upon receipt of any notice from National Beef of the happening of
any event of the kind described in Section 2(c)(v), such Founding Member
will forthwith discontinue disposition of Registrable Securities pursuant to
the registration statement covering such Registrable Securities until such
Founding Member’s receipt of any copies of the supplemented or amended
prospectus contemplated by Section 2(c)(v), and, if so directed by National
Beef, such Founding Member will deliver to National Beef (at National Beef’s
expense) all copies, other than permanent file copies then in such Founding
Member’s possession, of the prospectus covering such Registrable Securities
current at the time of receipt of such notice.

 

(f) Indemnification.

 

(i) In
the event of any registration of any securities of National Beef under the
Securities Act pursuant to this Section 2, National Beef shall indemnify
and hold harmless the holder of any Registrable Securities covered by such
registration statement, its directors, officers and employees, each Person who
participates as an underwriter in the offering or sale of such securities and
each other Person, if any, who Controls such holder or any such underwriter
within the meaning of the Securities Act (collectively, the “Registration
Indemnified Parties”), against any and all losses, claims, damages or
liabilities, joint or several, actions or proceedings (whether commenced or
threatened) in respect thereof and expenses (including reasonable attorney’s
fees and reasonable expenses of investigation) to which such Registration
Indemnified Party may become subject under the Securities Act (“Losses”),
state law or otherwise, insofar as such Losses arise out of, relate to or are
based upon (a) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary or final
prospectus contained therein, or any amendment or supplement thereto, or
(b) any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in
the case of a prospectus, in light of the circumstances under which they were
made) not misleading; 

 

11

 

provided, that National
Beef shall not be liable to any Registration Indemnified Party in any such case
to the extent, but only to the extent, that any such Losses or expenses arise
out of, relate to or are based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement
or amendment or supplement thereto or in any such preliminary or final
prospectus in reliance upon and in conformity with written information
furnished to National Beef by or on behalf of such holder, underwriter or other
Person specifically for use in the preparation thereof; and, provided, further,
that National Beef will not be liable in any such case to the extent, but only
to the extent, that the foregoing indemnity with respect to any untrue
statement contained in or omitted from a registration statement or the
prospectus shall not inure to the benefit of any party (or any Person
Controlling such party) who is obligated to deliver a prospectus in
transactions in a security as to which a registration statement has been filed
pursuant to the Securities Act and from whom the Person asserting any such
Losses purchased any of the Registrable Securities to the extent that it is
finally judicially determined that Losses resulted from the fact that such
party sold Registrable Securities to a Person to whom there was not sent or
given, at or prior to the written confirmation of such sale, a copy of the
registration statement or the prospectus, as amended or supplemented, and (x) National
Beef shall have previously and timely furnished sufficient copies of the
registration statement or prospectus, as so amended or supplemented if required
under the Securities Act, to such party in accordance with this Agreement and
(y) the registration statement or prospectus, as so amended or
supplemented, would have corrected such untrue statement or omission of a
material fact. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of any Registration Indemnified Party
and shall survive the Transfer of securities by any holder.

 

(ii) National
Beef may require, as a condition to participating in the sale of any
Registrable Securities in any registration statement filed in accordance with
Sections 2(a) or 2(b) herein, that it shall have receive an
undertaking reasonably satisfactory to it from the selling holder of such
Registrable Securities and any underwriter to indemnify and hold harmless (in
the same manner and to the same extent as set forth in Section 2(f)(i))
National Beef and all other selling holders or any underwriter, as the case may
be, with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from such registration statement, any preliminary
or final prospectus contained therein, or any amendment or supplement thereto,
if such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to National Beef by or on behalf of such selling holder or such
underwriter specifically for inclusion in such registration statement,
preliminary or final prospectus or amendment or supplement.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of National Beef,
any of the selling holders or any underwriter and shall survive the transfer of
securities by any holder.

 

(iii) Promptly
after receipt by a Registration Indemnified Party hereunder of written notice
of the commencement of any action or proceeding with respect to which a claim
for indemnification may be made pursuant to this Section 2(f), such
Registration Indemnified Party will, if a claim in respect thereof is to be
made against National Beef, give written notice to National Beef of the
commencement of such action or proceeding; provided, however,
that the failure of the Registration Indemnified Party to give notice as
provided herein shall not relieve National Beef of its obligations under this
Section 2(f), except to the extent that National Beef is 

 

12

 

materially
prejudiced by such failure to give notice. 
In case any such action or proceeding is brought against a Registration
Indemnified Party, unless in such Registration Indemnified Party’s reasonable
judgment (after consultation with legal counsel) a bona fide conflict of
interest between such Registration Indemnified Party and National Beef may
exist in respect of such action or proceeding, National Beef will be entitled
to participate in and to assume the defense thereof (at its expense) with
counsel reasonably satisfactory to such Registration Indemnified Party, and
after notice from National Beef to such Registration Indemnified Party of its
election so to assume the defense thereof, National Beef will not be liable to
such Registration Indemnified Party for any legal or other expenses
subsequently incurred by the Registration Indemnified Party in connection with
the defense thereof other than reasonable costs of investigation; provided,
however, in the event National Beef declines or fails to assume the
defense of the action or proceeding or to employ counsel reasonably
satisfactory to the Registration Indemnified Party or if a court of competent
jurisdiction determines that National Beef is not vigorously defending such
action or proceeding, or if there is a bona fide conflict of interest between
National Beef and the Registration Indemnified Party, then such Registration
Indemnified Party may employ counsel to represent or defend it in any such
action or proceeding and National Beef shall pay the reasonable fees and
disbursements of such counsel or other representative as incurred; provided,
further, however, that National Beef shall not be required to pay
the fees and disbursements of more than one counsel for all Registration
Indemnified Parties in any jurisdiction in any single action or
proceeding.  National Beef will not
settle any such action or proceeding or consent to the entry of any judgment
without the prior written consent of the Registration Indemnified Party, unless
such settlement or judgment (a) includes as an unconditional term thereof
the giving by the claimant or plaintiff of a release to such Registration
Indemnified Party from all liability in respect of such action or proceeding
and (b) does not involve the imposition of equitable remedies.  No Registration Indemnified Party will settle
any such action or proceeding or consent to the entry of any judgment without
the prior written consent of National Beef (such consent not to be unreasonably
withheld).

 

(iv) (1) If
the indemnification provided for in this Section 2(f) is unavailable
to National Beef or to a Registration Indemnified Party hereunder in respect of
any Losses or expenses referred to herein, then National Beef and the
Registration Indemnified Parties, in lieu of such indemnification, shall
contribute to the amount paid or payable by National Beef or such Registration
Indemnified Party as a result of such Losses or expenses in such proportion as
is appropriate to reflect the relative fault of National Beef and Registration
Indemnified Party in connection with the actions or proceedings which resulted
in such Losses or expenses, as well as any other relevant equitable considerations.  The relative fault of National Beef and
Registration Indemnified Party shall be determined by reference to, among other
things, whether any action or proceeding in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact, has been made by, or relates to information supplied by,
National Beef or Registration Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action or proceeding.  The amount
paid or payable by a party under this Section 2(f)(iv) as a result of
the Losses and expenses referred to above shall be deemed to include any legal
or other fees or expenses reasonably incurred by such party in connection with
any action or proceeding.

 

(2) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 2(f)(iv) were
determined by pro rata allocation or by any 

 

13

 

other
method of allocation which does not take account of the equitable
considerations referred to in Section 2(f)(iv)(1).  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of similar fraudulent misrepresentation.

 

(v) The
obligations of the parties under this Section 2(f) shall be in
addition to any liability which any party may otherwise have to any other party
and shall survive until the expiration of the applicable statutes of
limitations (including any waivers or extensions thereof) with respect to any
such registrations made hereunder.

 

(g) Required
Reports.  National Beef covenants
that it will timely file the reports required to be filed by it under the
Securities Act and the Exchange Act, and it will take such further action as
any Founding Member may reasonably request, all to the extent required from
time to time to enable such Founding Member to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.

 

(h) Holdback
Agreement.  If any registration under
Sections 2(a) or 2(b) hereof or any sale of securities in
connection with a registration under Section 2(a) hereof shall be in
connection with an underwritten public offering, each holder of Registrable
Securities included in such registration agrees to enter into customary
agreements with the underwriters to not effect any sale or distribution,
including any sale pursuant to Rule 144, of any equity interests of
National Beef (in each case, other than as part of such underwritten public
offering), within 30 days before, or 90 days after (or such lesser
period as the managing underwriters may permit or such longer periods as
required by applicable law) such offering.

 

(i) Termination
of Rights.  Except for
indemnification rights provided in Section 2(f), the rights granted to a
Founding Member in this Agreement shall terminate and forthwith become null and
void in full on the earliest date that such Founding Member no longer
beneficially owns any Registrable Securities.

 

3.                Miscellaneous.

 

(a) Agreement
to Cooperate; Further Assurances.  In
case at any time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors and each Founding
Member and their respective Affiliates shall execute such further documents and
shall take such further action as shall be reasonably necessary to carry out
the purposes of this Agreement, in each case to the extent not inconsistent
with applicable law.

 

(b) Amendments.  Except as otherwise expressly provided in
this Agreement, amendments to this Agreement shall require approval of National
Beef and each Founding Member.

 

(c) Injunctive
Relief.  National Beef and each
Founding Member acknowledge and agree that a violation of any of the terms of
this Agreement may cause the other Founding Members and National Beef, as the
case may be, irreparable injury for which an adequate remedy at law is not
available.  Accordingly, it is agreed
that each of the Founding Members and National Beef will be entitled to seek an
injunction, restraining order or other equitable relief to prevent breaches of
the provisions of this Agreement and to enforce specifically the terms and
provisions hereof in any court of competent jurisdiction, in addition to any
other remedy to 

 

14

 

which
they may be entitled at law or, equity. 
Nothing stated herein shall limit any other remedies provided under this
Agreement or available to the parties at law or in equity.

 

(d) Successors.  The provisions of this Agreement will be
binding upon and will inure to the benefit of the parties hereto and their
respective successors, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person, including but not limited to
any creditor of National Beef or its Subsidiaries, any right, benefit, or
remedy of any nature by reason of this Agreement.  An assignment of the rights, interests or
obligations hereunder, including but not limited to an assignment by operation
of law, shall be null and void unless a provision of this Agreement
specifically provides otherwise or National Beef gives its prior written
consent therefor.

 

(e) Notices.  Any written notice required or permitted to
be delivered pursuant to this Agreement shall be in writing and shall be deemed
delivered: (a) upon delivery if delivered in person; (b) upon transmission
if sent via telecopier, with electronic confirmation of receipt; (c) one
Business Day after deposit with a nationally recognized overnight courier
service, provided that confirmation of such overnight delivery is
received by the sender; and (d) upon transmission if sent via e-mail, with
a confirmation copy sent via telecopier on the same day with electronic
confirmation of receipt.  Notices to
National Beef or any Founding Member shall be delivered to National Beef or
such Founding Member as set forth in Exhibit A, as it may be
revised from time to time.  Any party may
change its address for notices by giving written notice of the new address to
the other parties in accordance with this section, but any element of such
party’s address that is not newly provided in such notice shall be deemed not
to have changed.

 

(f) Integration.  This Agreement contains the exclusive, entire
and final understanding of the parties with respect to the subject matter
hereof.  There are no agreements,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth herein.  Except as expressly set forth herein, this
Agreement supersedes all other prior agreements, discussions, negotiations,
communications and understandings between the parties with respect to such
subject matter hereof.  No party has
relied on any statement, representation, warranty, or promise not expressly
contained in this Agreement in connection with this transaction.

 

(g) Severability.  If one or more of the provisions, paragraphs,
words, clauses, phrases or sentences contained herein, or the application
thereof in any circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, then such provision, paragraph, word, clause, phrase or
sentence shall be deemed restated to reflect the original intention of the
parties as nearly as possible in accordance with applicable law and the
remainder of this Agreement. The legality and enforceability of any such provision,
paragraph, word, clause, phrase or sentence in every other respect and of the
remaining provisions, paragraphs, words, clauses, phrases or sentences hereof
will not be in any way impaired, it being intended that all obligations,
rights, powers and privileges of National Beef and the Founding Members will be
enforceable to the fullest extent permitted by law.  Upon such determination of invalidity,
illegality or unenforceability, National Beef and the Founding Members shall
negotiate in good faith to amend this Agreement to effect the original intent
of the Founding Members.

 

(h) Counterparts.  This Agreement may be executed in one or more
counterparts and by different parties on separate counterparts, each of which
will be deemed an original, but all of 

 

15

 

which
will constitute one and the same instrument. 
The parties agree that this Agreement shall be legally binding upon the
electronic transmission, including by facsimile or email, by each party of a
signed signature page hereof to the other party.

 

(i) Governing
Law; Submission to Jurisdiction.

 

(i) This
Agreement is to be construed in accordance with and governed by the internal
laws of the State of Delaware without giving effect to any choice of law rule that
would cause the application of the laws of any jurisdiction other than the
internal laws of the State of Delaware to the rights and duties of the parties.

 

(ii) Each
party hereto agrees that any legal action or other legal proceeding relating to
this Agreement or the enforcement of any provision of this Agreement shall be
brought or otherwise commenced exclusively in any state or federal court
located in Delaware.

 

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT
BLANK.]

 

16

 

IN
WITNESS WHEREOF, each of the undersigned has executed this Agreement or caused
this Agreement to be executed on its behalf as of the date first written above.

 

 

	
  National Beef:

  	
  NATIONAL
  BEEF, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Timothy
  M. Klein

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The Founding Members:

  	
  U.S.
  PREMIUM BEEF, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   Steven
  D. Hunt

  
	
   

  	
  Title:

  	
   Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  NBPCO
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TKK
  INVESTMENTS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   Timothy
  M. Klein

  
	
   

  	
  Title:

  	
   Sole
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  TMKCO,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   Timothy
  M. Klein

  
	
   

  	
  Title:

  	
   Sole
  Manager

  

 

17

 

Exhibit A

Members

 

	
  If to National Beef:

   

  National Beef, Inc.

  12200 N. Ambassador Drive,
  Suite 500

  Kansas City, Missouri
  64163

  Facsimile: (816) 713-8889

  Attention: Bret G. Wilson

  	
   

  	
  If to USPB:

   

  U.S. Premium Beef, LLC

  12200 N. Ambassador Drive,
  Suite 501

  Kansas City, Missouri
  64163

  Facsimile: (816) 713-8810

  Attention: Steven D. Hunt

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
  Sidley Austin LLP

  One South Dearborn Street

  Chicago, Illinois
  60603

  Facsimile: (312) 853-7036

  Attention: Paul L. Choi

                   John J. Sabl

  	
   

  	
  Stoel Rives LLP

  33 South Sixth Street,
  Suite 4200

  Minneapolis, Minnesota
  55402

  Facsimile: (612) 373-8881

  Attention: Mark J. Hanson

  
	
   

  	
   

  	
   

  
	
  If to NBPCo:

   

  NBPCo Holdings, LLC

  891 Two Rivers Drive

  Dakota Dunes, South Dakota
  57040

  Facsimile: (605) 217-8001

  Attention: Rich Jochum

  	
   

  	
  If to the Klein Entities:

   

  TKK Investments, LLC

  TMKCo, LLC

  10217 Hwy 92

  Kearney, Missouri 64060

  Facsimile: (816) 713-8852

  Attention: Timothy M.
  Klein

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Koley Jessen P.C., LLO

  1125 S. 103rd Street, Suite 800

  Omaha, Nebraska 68124

  Facsimile: (402) 390-9005

  Attention: Michael M. Hupp

                    Matthew D. Maser

   

  	
   

  	
   

  

 

18Exhibit 10.3

 

FORM OF EXCHANGE AGREEMENT

 

This
Exchange Agreement (this “Agreement”) is dated as of
                              ,
2010, by and among National Beef, Inc., a Delaware corporation (“National
Beef”), U.S. Premium Beef, LLC, a Delaware limited liability company (“USPB”),
NBPCo Holdings, LLC, a South Dakota limited liability company (“NBPCo
Holdings”), TKK Investments, LLC, a Missouri limited liability company (“TKK”),
and TMKCo, LLC, a Missouri limited liability company (“TMKCo”, and
together with TKK, the “Klein Entities”).

 

WHEREAS,
National Beef intends to consummate an initial public offering (the “IPO”)
of shares of its Class A common stock (the “Class A Common Stock”);

 

WHEREAS,
in connection with the IPO, National Beef will purchase from National Beef
Packing Company, LLC, a Delaware limited liability company (“NBP LLC”),
and the Members of NBP LLC, units of NBP LLC;

 

WHEREAS,
USPB, NBPCo Holdings, and the Klein Entities (collectively, the “Members”)
will own the balance of the outstanding units of NBP LLC;

 

WHEREAS,
National Beef believes that it is in its best interests to increase its
ownership of units of NBP LLC over time and agrees to permit the Members to
transfer their units of NBP LLC to National Beef from time to time in exchange for
the consideration specified herein;

 

WHEREAS,
the parties hereto desire that this Agreement govern the terms and conditions
for the exchange of certain NBP LLC units (the “NBP LLC Units”) for Class A
Common Stock, cash, or a combination of both, on the terms and subject to the
conditions set forth herein;

 

NOW,
THEREFORE, in consideration of the mutual covenants and undertakings contained
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:

 

ARTICLE I 

DEFINITIONS

 

Section 1.1.                                Definitions.

 

The
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement.

 

“Business
Day” means each day that is not a Saturday, Sunday or other day on which
banking institutions in Kansas City, Missouri are authorized or required by law
to close.

 

“Fair
Market Value” means, with respect to the Class A Common Stock, the
average per share closing price of the Class A Common Stock for the ten (10) days
on which the relevant market was open for trading immediately preceding the
Quarterly Exchange Date on the national securities exchange or interdealer
quotation system on which such Class A Common Stock is then traded or
listed, as reported by the Wall Street Journal. 
If the per share closing price of the 

 

 

Class A
Common Stock cannot be ascertained in accordance with the preceding sentence,
then the Fair Market Value shall be determined by an independent third party
appraisal firm selected by the National Beef Audit Committee (or another
committee of National Beef consisting solely of independent directors).

 

“Person”
means an individual, corporation, limited liability company, partnership, joint
venture, trust, estate, unincorporated organization, association (including any
group, organization, co-tenancy, plan, board, council or committee), government
(including a country, state, county, or any other governmental or political
subdivision, agency or instrumentality thereof) or other entity (or series
thereof).

 

“Quarter”
means, unless the context requires otherwise, a fiscal quarter of National
Beef.

 

“Quarterly
Exchange Date” means the date that is the first day of any Quarter.

 

“Transfer
Agent” means such bank, trust company or other Person as shall be appointed
from time to time by National Beef to act as registrar and transfer agent for
the Class A Common Stock.

 

ARTICLE II 

EXCHANGE OF NBP LLC UNITS

 

Section 2.1.                                Exchange
of NBP LLC Units.

 

(a)                                  Beginning with the first Quarter following the date that is one hundred
eighty (180) days after the date of this Agreement, and subject to adjustment
as provided in this Agreement, each Member shall be entitled on any Quarterly
Exchange Date to surrender  all or
a portion of the NBP LLC Units held by it in exchange for either (at the option
of National Beef): (i) the
delivery by National Beef of a
number of shares of Class A Common Stock equal to the number of NBP LLC
Units surrendered (with such 1 to 1 exchange ratio subject to adjustment
pursuant to Section 2.3 below); (ii) cash in an amount equal to the
Fair Market Value of the Class A Common Stock a Member would receive
pursuant to (i) above; or (iii) a combination of Class A Common
Stock and cash (any such exchange, an “Exchange”); provided that, any
such Exchange must be for a minimum of the lesser of (I) 100 NBP LLC
Units; or (II) all of the NBP LLC Units held by such Member.

 

(b)                                 On the Quarterly Exchange Date (and in accordance with the terms of this
Agreement): (i) the relevant NBP LLC Units shall be surrendered for
Exchange; (ii) all rights of the transferring Member as holder of such NBP
LLC Units shall cease; (iii) such Member shall be treated for all purposes
as having become the record holder of the issued Class A Common Stock, if
any; (iv) the Member’s right to receive cash, if any, shall vest with the
Member; and (v) the relevant shares of the Member’s Class B Common
Stock shall be surrendered to National Beef.

 

Section 2.2.                                Exchange
Procedures.

 

(a)                                  A Member may exercise the right to exchange NBP LLC Units set forth in Section 2.1(a) above
by providing to National Beef a written notice of Exchange, substantially in 

 

2

 

the form of Exhibit A hereto (the “Exchange
Notice”), at least ten (10) days prior to the Quarterly Exchange Date
for the applicable Quarter or within such shorter period of time as may be
agreed by National Beef and the exchanging Member.  The Exchange Notice shall be duly executed by
such Member and delivered in accordance with Section 3.2 of this
Agreement. 
At least three (3) Business Days prior to the Quarterly
Exchange Date, National Beef shall give written notice (the “Option Notice”)
to the exchanging Member of its intended settlement method; provided that, if
National Beef does not timely deliver an Option Notice, National Beef shall be
deemed to have elected to pay the consideration entirely in Class A Common
Stock.  The exchanging Member may retract
its Exchange Notice by giving written notice (the “Retraction Notice”)
to National Beef within two (2) Business Days after delivery of the Option
Notice (or, if no Option Notice is delivered, one (1) Business Day prior
to the Exchange Date).  The timely
delivery of a Retraction Notice shall terminate all of the exchanging Member’s
and National Beef’s rights and obligations under this Agreement arising from
the Exchange Notice and the NBP LLC Units subject to such retracted Exchange
shall remain beneficially owned by such Member and subject to the terms and
conditions of this Agreement.

 

(b)                                 Each Member beneficially owning the NBP LLC Units that are subject to
Exchange pursuant to Section 2.1(a) above shall execute and deliver
on or before the Quarterly Exchange Date a written assignment and acceptance
agreement with respect to such NBP LLC Units, in a form reasonably acceptable
to National Beef.

 

(c)                                  In addition to
the NBP LLC Units exchanged pursuant to this Agreement, each exchanging Member
shall surrender to National Beef, for no additional consideration, a number of
shares of National Beef ‘s Class B common stock (the “Class B
Common Stock”) equal to the number of NBP LLC Units transferred by the
Member on such Quarterly Exchange Date, all subject to adjustment consistent
with Section 2.3.  To effect such
surrender, the exchanging Member shall execute and deliver on or before the Quarterly Exchange Date a written
stock power in a form reasonably acceptable to National Beef surrendering such Class B
Common Stock.

 

(d)                                 As promptly as practicable following the surrender for Exchange of NBP
LLC Units, National Beef shall deliver or cause to be delivered, as applicable:
(i) to the exchanging Member, or to the office of the Transfer Agent, the
number of shares of Class A Common Stock issuable upon such Exchange,
issued in the name of the exchanging Member; and (ii) to the exchanging
Member, the cash due pursuant to this Agreement.

 

(e)                                  Each certificate of Class A Common Stock issued pursuant to this
Agreement shall be imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.”

 

(f)                                    The parties hereto acknowledge and agree that National Beef’s
determination hereunder of the settlement method (i.e., stock, cash or a
combination thereof) for the Exchange shall be made by the Audit Committee of
National Beef (or another committee of National Beef consisting
solely of independent directors).

 

3

 

Section 2.3.                                Splits,
Distributions and Reclassifications.   The exchange ratio set forth in Section 2.1(a) shall
be adjusted accordingly if there is: (1) any subdivision (by split,
distribution, reclassification, recapitalization or otherwise) or combination
(by reverse split, reclassification, recapitalization or otherwise) of the NBP
LLC Units that is not accompanied by an identical subdivision or combination of
the Class A Common Stock; or (2) any subdivision (by split,
distribution, dividend, reclassification, recapitalization or otherwise) or
combination (by reverse split, reclassification, recapitalization or otherwise)
of the Class A Common Stock that is not accompanied by an identical
subdivision or combination of the NBP LLC Units.

 

Section 2.4.                                Class A
Common Stock to be Issued.   National Beef shall use commercially
reasonable efforts to list the Class A Common Stock required to be
delivered upon Exchange prior to such delivery upon each national securities
exchange or inter-dealer quotation system upon which the outstanding Class A
Common Stock may be listed or traded at the time of such delivery. Nothing
contained herein shall be construed to preclude National Beef from satisfying
its obligations in respect of the Exchange of the NBP LLC Units by delivery of Class A
Common Stock which is held in the treasury of National Beef.

 

Section 2.5.                                Tax
Matters.  The delivery of Class A
Common Stock upon Exchange of NBP LLC Units shall be made without charge to the
exchanging Member for any stamp or other similar tax in respect of such
issuance.  The
parties shall report an Exchange consummated pursuant to this Agreement as a
taxable sale of NBP LLC Units by the exchanging Member to National Beef and no
party shall take a contrary position on any tax return.  At the time of an Exchange, the consideration
paid for the exchanged NBP LLC Units shall be allocated among the assets of NBP
LLC (and any subsidiary of NBP LLC that is a flow-thru or disregarded entity
for U.S. federal income tax purposes) in accordance with Sections 755 and 743(b) of
the Code and the Treasury Regulations promulgated thereunder, as reasonably
determined by the manager of NBP LLC.

 

Section 2.6.                                Consideration
for Exchange.  The parties hereto acknowledge and agree that
the consideration paid by National Beef to the Members pursuant to the Tax
Receivable Agreement by and among National Beef and the Members  shall serve as a portion of the consideration for the
Exchanges contemplated hereunder.

 

Section 2.7.    Member Representations.  Each Member issued Class A Common
Stock pursuant to this Agreement hereby severally represents and warrants that,
as of each Quarterly Exchange Date upon which a Member is issued Class A
Common Stock, that: (a) it is acquiring the Class A Common Stock
issued in accordance with this Agreement for its own account with the present
intention of holding such stock for purposes of investment, and that it has no
intention of selling such stock in a public distribution in violation of any
federal or state securities laws; (b) it is a sophisticated party for
purposes of applicable federal and state securities laws and regulations; (c) it
believes that it has such knowledge and experience in financial and business
matters that such Member is capable of evaluating the merits and risks of an
investment in National Beef; (d) it is able to bear the economic risks of
an investment in the Class A Common Stock and could afford a complete loss
of such investment; (e) the execution, delivery and performance of this
Agreement by such Member does not and will not conflict with, violate or cause
a breach of any agreement, contract or instrument to which such Member is 

 

4

 

subject; and (f) the NBP LLC Units surrendered in connection with
such Exchange are owned by the Exchanging Member, free and clear from all liens
and encumbrances.

 

ARTICLE III 

GENERAL PROVISIONS

 

Section 3.1.                                Amendment.  The provisions of this Agreement may be
amended by the affirmative vote or written consent of each of the parties
hereto.

 

Section 3.2.                                Addresses
and Notices.  All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
recognized overnight delivery service, by courier service, by fax, by
electronic mail (delivery receipt requested) or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be as
specified in a notice given in accordance with this Section 3.2):

 

	
   

  	
  (a)

  	
  If
  to National Beef, to:

  	
  National
  Beef, Inc.

  12200
  Ambassador Drive, 5th Floor

  Kansas
  City, MO 64163

  Attention:
  General Counsel

  Fax:
  (816) 713-8889

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With
  a copy to:

  	
  Sidley
  Austin LLP

  
	
   

  	
   

  	
   

  	
  One
  South Dearborn Street

  
	
   

  	
   

  	
   

  	
  Chicago, IL
  60603

  
	
   

  	
   

  	
   

  	
  Attention:
  John Sabl and Paul Choi

  
	
   

  	
   

  	
   

  	
  Fax:
  (312) 853-7036

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  If
  to USPB, to:

  	
  U.S.
  Premium Beef, LLC

  
	
   

  	
   

  	
   

  	
  P.O. Box
  20103

  
	
   

  	
   

  	
   

  	
  Kansas
  City, MO 64195

  
	
   

  	
   

  	
   

  	
  Attention:
  Steven D. Hunt

  
	
   

  	
   

  	
   

  	
  Fax:
  (816) 713-8810

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With
  a copy to:

  	
  Stoel
  Rives LLP

  
	
   

  	
   

  	
   

  	
  33
  South Sixth Street, Suite 4200

  
	
   

  	
   

  	
   

  	
  Minneapolis,
  MN 55402

  
	
   

  	
   

  	
   

  	
  Attention:
  Mark J. Hanson

  
	
   

  	
   

  	
   

  	
  Fax:
  (612) 373-8881

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  If
  to NBPCo, to:

  	
  NBPCo
  Holdings, LLC

  
	
   

  	
   

  	
   

  	
  891
  Two Rivers Drive

  
	
   

  	
   

  	
   

  	
  Dakota
  Dunes, SD 57049

  
	
   

  	
   

  	
   

  	
  Attention:
  Rich Jochum

  
	
   

  	
   

  	
   

  	
  Fax:
  (605) 217-8001

  

 

5

 

	
   

  	
  With
  a copy to:

  	
  Koley
  Jessen P.C., LLO

  
	
   

  	
   

  	
   

  	
  1125
  S 103rd Street, Suite 800

  
	
   

  	
   

  	
   

  	
  Omaha,
  NE 68124

  
	
   

  	
   

  	
   

  	
  Attention:
  Michael M. Hupp and

  
	
   

  	
   

  	
   

  	
  Matthew
  Maser

  
	
   

  	
   

  	
   

  	
  Fax:
  (402) 390-9005

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  If
  to the Klein Entities, to:

  	
  TKK
  Investments, LLC

  
	
   

  	
   

  	
   

  	
  TMKCo,
  LLC

  
	
   

  	
   

  	
   

  	
  10217
  Hwy 92

  
	
   

  	
   

  	
   

  	
  Kearney,
  MO 64060

  
	
   

  	
   

  	
   

  	
  Attention:
  Timothy M. Klein

  
	
   

  	
   

  	
   

  	
  Fax:
  (816) 713-8852

  

 

Section 3.3.                                Further
Action.  The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement.

 

Section 3.4.                                Binding
Effect.  This Agreement shall be binding upon and
inure to the benefit of all of the parties and their successors, executors,
administrators, heirs, legal representatives and assigns. Other than as
expressly provided herein, nothing in this Agreement will be construed to give
any person other than the parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any
provision of this Agreement.

 

Section 3.5.                                Severability.  If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions is not affected in any manner materially
adverse to any party. Upon a determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

 

Section 3.6.                                Integration.  This Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto.

 

Section 3.7.                                Waiver.  No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach thereof
shall constitute waiver of any such breach of any other covenant, duty, agreement
or condition.

 

Section 3.8.                                Counterparts.  This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which when executed
and delivered shall be deemed to be an 

 

6

 

original
but all of which taken together shall constitute one and the same agreement.
Copies of executed counterparts transmitted by telecopy or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section 3.8.

 

Section 3.9.                                Applicable
Law.  This
Agreement shall be governed by, and construed in accordance with, the law of
the State of Delaware.

 

[Signature Page Follows]

 

7

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and
delivered, all as of the date first set forth above.

 

	
   

  	
  NATIONAL
  BEEF, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  U.S. PREMIUM
  BEEF, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NBPCO
  HOLDINGS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TKK
  INVESTMENTS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TMKCo,
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

8

 

EXHIBIT A

 

FORM OF

NOTICE OF EXCHANGE

 

National
Beef, Inc.

12200
Ambassador Drive, 5th Floor

Kansas
City, MO  64163

Attention:  General Counsel

Fax:  (816) 713-8889

 

Reference
is hereby made to the Exchange Agreement, dated as of
                                ,
2010 (the “Exchange Agreement”), among National Beef, Inc., U.S.
Premium Beef, LLC, NBPCo Holdings, LLC, TKK Investments, LLC, and TMKCo, LLC,
as amended from time to time.  Capitalized terms used but not defined
herein shall have the meanings given to them in the Exchange Agreement.

 

(the
“Exchanging Member”) desires to Exchange the number of NBP LLC Units set
forth below.

 

Number
of NBP LLC Units to be Exchanged:

 

The
Exchanging Member hereby: (1) affirms and gives the representations set
forth in Section 2.7 of the Exchange Agreement; (2) gives notice of
its desire to Exchange such NBP LLC Units for [Class A Common Stock] as
set forth in the Exchange Agreement, (3) irrevocably constitutes and
appoints any officer of National Beef as its attorney, with full power of
substitution, to Exchange said NBP LLC Units on the books of NBP LLC for [Class A
Common Stock on the books of National Beef], with full power of substitution in
the premises.

 

IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice of Exchange to be executed and delivered by the undersigned.

 

 

	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

1

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