CONTRIBUTION AGREEMENT FOR INTERESTS IN U. S. PREMIUM BEEF, LLC

CONTRIBUTION AGREEMENT

FOR INTERESTS IN

U. S. PREMIUM BEEF, LLC

BY AND BETWEEN

U.S. PREMIUM BEEF, LLC

AND

BRAWLEY BEEF, LLC

Dated as of May 30, 2006

TABLE OF CONTENTS

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CONTRIBUTION AGREEMENT
FOR INTERESTS
IN U.S. PREMIUM BEEF, LLC

This Agreement to acquire interests in U.S. Premium Beef, LLC (this "Agreement"), dated as of May 30, 2006 (the "Effective Date"), is entered into by and between Brawley Beef, LLC, a California limited liability company ("Brawley Beef"), and U.S. Premium Beef, LLC, a Delaware limited liability company ("USPB") (each of Brawley Beef and USPB, a "Party" and together, the "Parties").

RECITALS:

WHEREAS, Brawley Beef desires to acquire 44,160 Class A and 44,160 Class B Units of USPB, and USPB desires to acquire 44,160 limited partnership units of National Beef California, LP as part of a series of transactions in which Brawley Beef will transfer certain assets and certain liabilities to National Beef California, LP, and USPB will transfer the limited partnership units acquired from Brawley Beef to National Beef Packing Company, LLC; and

WHEREAS, capitalized terms used but not defined in this Agreement shall have the respective meanings ascribed to the terms in Article 8 of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants described below and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby covenant and agree as follows:

ARTICLE 1
ACQUISITION OF MEMBERSHIP INTERESTS

1.1                   Acquisition of Membership Interests by Brawley Beef.

Upon the terms and subject to the conditions of this Agreement at the Closing, USPB shall issue 44,160 Class A Units and 44,160 Class B Units of USPB to Brawley Beef (the "Brawley Membership Interest"), fully paid and free and clear of any Lien except for the security interest created pursuant to that certain Pledge Agreement of even date with this Agreement, in exchange for and Brawley Beef's transfer to USPB of the Consideration stated in Section 1.2.

1.2                   Consideration.

In consideration of the issuance and sale of the 44,160 Class A Units and 44,160 Class B Units to Brawley Beef as set forth in Section 1.1, Brawley Beef shall transfer to USPB 44,160 limited partnership units of National Beef California, LP, fully paid and free and clear of any Lien except for the security interest created pursuant to that certain Pledge Agreement of even date with this Agreement.

1.3                   Deliveries at Closing.

At the Closing Date:

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(1)               Brawley Beef will deliver to USPB 44,160 limited partnership units in National Beef California, LP;

(2)               USPB shall issue 44,160 Class A Units and 44,160 Class B Units of USPB to Brawley Beef, and the Brawley Membership Interest will be duly and validly authorized and issued, fully paid subject to the provisions of the USPB Limited Liability Company Agreement and the security interest created pursuant to that certain Pledge Agreement of even date with this Agreement;

(3)               USPB shall provide a certificate that the records of USPB that reflect Brawley Membership Interest of 44,160 Class A Units and 44,160 Class B Units;

(4)               Brawley Beef will execute and accept the Limited Liability Company Agreement of USPB attached as Exhibit A;

(5)               Brawley Beef will deliver an executed Application For Class A and/or Class B Membership form attached as Exhibit B;

(6)               Brawley Beef will deliver an executed Uniform Cattle Delivery and Marketing Agreement attached as Exhibit C; and

(7)               Each of the Parties shall deliver to the other Party certificates, instruments and documents reasonably requested by the other Parties to effectuate the transactions contemplated by this Agreement.

1.4                  Closing.

Subject to satisfaction or waiver of the conditions set forth in Sections 5.1 and 5.2, the closing shall take place at 10:00 a.m., Kansas City, Missouri time, at the offices of Blackwell Sanders Pepper Martin LLP, 4801 Main Street, Kansas City, Missouri, on the date the closing for the transaction under the Contribution Agreement dated as of May 19, 2006, by and among Brawley Beef, LLC and National Beef California, LP and National Beef Packing Company, LLC (the "Brawley-NBPCA Agreement") takes place (the "Closing"), (the time and date referred to in this Agreement as the "Closing Date").

ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF BRAWLEY BEEF

2.1                  Representations and Warranties of Brawley Beef.

Brawley Beef represents and warrants to USPB on the Effective Date of this Agreement and at the Closing the provisions in Sections 2.2 through 2.9 are true and can be relied upon by USPB to accept the contribution from Brawley Beef in exchange for issuing the Membership Interest in USPB to Brawley Beef under this Agreement.

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2.2                  Organization; Power and Authority.

Brawley Beef is a limited liability company that is duly organized, validly existing and in good standing under the laws of California, and is duly qualified to do business and is in good standing in each jurisdiction in which the qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Brawley Beef.  Brawley Beef has the limited liability company power and authority to transact the business it transacts and proposes to transact, to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform the conditions and obligations of this Agreement and the Transaction Documents.

2.3                  Authorization and Enforceability.

The execution of this Agreement has been duly authorized by all necessary limited liability company action of Brawley Beef, each Transaction Document at Closing constitutes a legal, valid and binding obligation of Brawley Beef, enforceable against it in accordance with its terms, except as enforceability may be limited by: (1) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally; and (2) general principles of equity (regardless of whether the enforceability is considered in a proceeding in equity or at law).

2.4                 No Conflicts.

Neither the execution, delivery and performance of any of the Transaction Documents nor the consummation of any of the transactions contemplated under the Transaction Documents by Brawley Beef will:

(1)               conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of, the certificate of formation or operating agreement or other organizational document of Brawley Beef, or, subject to the receipt of the consents referenced in Section 2.6 below, any Material mortgage, bond, indenture, agreement, franchise, license, permit or other instrument or obligation to which any of Brawley Beef is a party or subject or by which any of its assets or properties may be bound;

(2)               result in the creation of any Lien upon any of the assets or properties of Brawley Beef; or

(3)               violate any Legal Requirement against, affecting or binding upon, Brawley Beef or upon any of its assets or properties.

2.5                  Organization and Ownership of Shares of Subsidiaries; Affiliates.

(a)                Members and Owners of Brawley Beef .  Schedule 2.5 lists the Members of and all Persons with an ownership interest in Brawley Beef.  Brawley Beef has no equity interest in any other Person.

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(b)               No Outstanding Rights, Warrants or Options.   There are no outstanding obligations, warrants, options or other rights to subscribe for or purchase from Brawley Beef, or other contracts or commitments providing for the issuance of or the granting of rights to acquire, any membership, limited partnership or other equity interests of or in Brawley Beef, or any securities or other instruments convertible into or exchangeable for the foregoing.  There are no outstanding or authorized equity appreciation, phantom equity, profit participation, or similar rights with respect to Brawley Beef, and there are no voting trusts, proxies, or other agreements or understandings with respect to the voting of the Membership Interests of Brawley Beef.

2.6                  No Additional Consents Required.

No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority or any other Person is required in connection with the execution, delivery and performance by Brawley Beef of any of the Transaction Documents.

2.7                  Litigation Affecting This Transaction.

Except as provided on Schedule 2.7, there are no actions, investigations, demands, suits or proceedings pending against or affecting the validity or the rights of Brawley Beef to enter into the Transaction Documents or consummate the transactions contemplated by the Transaction Documents, and, to the Knowledge of Brawley Beef, there are no actions, investigations, demands, suits or proceedings threatened against or affecting the validity or the rights of Brawley Beef to enter into the Transaction Documents or consummate the transactions contemplated by the Transaction Documents.

2.8                 No Material Misstatements or Omissions; Disclosure.

No representation or warranty of Brawley Beef in this Agreement contains or will contain any untrue statement of a Material fact nor shall the representations and warranties taken as a whole omit any statement necessary in order to make any Material statement contained in this Agreement not misleading.

2.9                  Licenses, Permits.

Except as set forth in Schedule 2.9, to the Knowledge of Brawley Beef, all licenses and permits necessary to meet the obligations under the Transaction documents have been met by Brawley Beef or its members or entities obligated to deliver cattle pursuant to the Uniform Delivery and Marketing Agreement (Even Slots), and are not the subject of any governmental inquiry, investigation, complaint or similar action.

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF USPB

3.1                  Representations and Warranties of USPB.

USPB represents and warrants to Brawley Beef on the Effective Date of this Agreement and at the Closing the provisions in Sections 3.2 to 3.7 are true and can be relied upon by Brawley Beef.

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3.2                  Organization, Power and Authority.

USPB is a limited liability company, duly incorporated, validly existing and in good standing under the laws of Delaware, and is duly qualified to do business and is in good standing in each jurisdiction in which the qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on USPB.  USPB has the corporate power and authority to transact the business it transacts and USPB has the corporate power and authority to execute and deliver this Agreement and each other Transaction Document to which it is a party and to perform the provisions under the Transaction Documents.

3.3                  Authorization and Enforceability.

The execution, delivery and performance of each of the Transaction Documents to which USPB is or would be a party at Closing has been or at Closing will be duly authorized by all necessary corporate action on the part of USPB, and constitutes the legal, valid and binding obligation of USPB enforceable against USPB in accordance with its terms, except as the enforceability may be limited by: (1) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally; and (2) general principles of equity (regardless of whether the enforceability is considered in a proceeding in equity or at law).

3.4                  No Conflicts.

Neither the execution, delivery and performance of any of the Transaction Documents nor the consummation of any of the transactions contemplated under any of the Transaction Documents by USPB will conflict with or result in any violation of or constitute a breach of any of the terms or provisions of, or result in the acceleration of any obligation under, or constitute a default under any provision of, the certificate of incorporation, the bylaws or other organizational documents of USPB, or any Material mortgage, bond, indenture, agreement, franchise, license, permit or other instrument or obligation to which USPB is a party or subject or by which any of its assets or properties may be bound.

3.5                  No Consents.

Except for the approvals of the Board of Directors, no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority or any other Person, if any, required in connection with the execution, delivery and performance by USPB of any of the Transaction Documents to which USPB is a party.

3.6                  Outstanding Membership Interest; Validly Issued.

As of the Effective Date, USPB has 691,845 Class A Units and 691,845 Class B Units duly and validly issued and fully paid and under management contracts under certain conditions management personnel have the right to acquire up to 20,000 Class A Units of 20,000 Class B Units.  The Class A Units and Class B Units issued to Brawley Beef in the Brawley Membership Interest will be duly and validly authorized and issued, fully paid and free from all Liens, subject to the provisions of the USPB Limited Liability Company Agreement and the security interest created pursuant to that certain Pledge Agreement of even date with this Agreement.

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3.7                  No Material Misstatements or Omissions; Disclosure.

No representation or warranty of USPB in this Agreement contains or will contain any untrue statement of a Material fact nor shall the representations and warranties taken as a whole omit any statement necessary in order to make any Material statement contained in this Agreement not misleading.

ARTICLE 4
COVENANTS OF THE PARTIES

4.1                  Cooperation and Best Efforts to Implement Agreement.

Subject to the satisfaction of the conditions to Closing contained in Sections 5.1 and 5.2, USPB and Brawley Beef shall use their respective reasonable best efforts and will cooperate with each other to secure all necessary consents, approvals, authorizations, assumptions and waivers from third parties as shall be required in order to enable the transactions contemplated under this Agreement to be effected at the Closing.

4.2                  Conduct of USPB Business.

After the date of this Agreement and prior to the earlier of the termination of this Agreement or the Closing Date, USPB agrees as follows:

(1)               to operate USPB in the ordinary course of business;

(2)               to refrain from making or causing to be made any change in the constituent documents of USPB, except as provided for in those documents;

(3)               not to issue or agree to issue any new Membership Interests (exclusive of transfers among Members' existing Membership Interests) or other equity interests or securities convertible into or exchangeable for or other rights with respect to membership interests or other equity interests of USPB; and

(4)               except as otherwise provided by law or GAAP, to refrain from making or causing to be made any change in the accounting methods, principles or practices of USPB.

4.3                  Notices and Consents.

Each of the Parties will give any notices to, make any filings with, and use its reasonable commercial efforts to obtain any authorizations, consents, and approvals of governments and governmental agencies, known to USPB.  Without limiting the generality of the foregoing, each of the Parties will file any notification and report forms and related material that it may be required to file with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the Hart-Scott-Rodino Act, will use its reasonable commercial efforts to obtain an early termination of the applicable waiting period, and will make any further filings that may be necessary, proper, or advisable.

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4.4                  Notification.

From and after the Effective Date and prior to the Closing Date, each Party shall promptly notify the other Party at any time that a party becomes aware that any representation or warranty made by a Party in or pursuant to this Agreement is untrue or inaccurate in any Material respect and shall promptly notify the other Party of any Material Adverse Effect on a Party and of any governmental complaints, investigations, hearings or proceedings which would have a Material Adverse Effect on a Party.  No notice by any Party pursuant to this Section, however, shall be deemed to amend or supplement the Disclosure Schedules, or to prevent or cause any misrepresentation breach of warranty or breach of contract.

4.5                  Disclosure and Exceptions.

The parties agree that any disclosure or exception by a party in this Agreement or any Schedule or Exhibit or any document or certificate required by this Agreement to be delivered by a Party at or prior to the Closing, shall be deemed to be a disclosure or exception with respect to the same or similar matter contained elsewhere in this Agreement, any other Schedule or Exhibit or any document or certificate required by this Agreement to be delivered by the Party at or prior to the Closing.

4.6                   Activities of Brawley Beef Deemed Not to Compete With USPB.

The current activities of Brawley Beef and its affiliates described in Schedule 4.6 which include the operation by one of the affiliates of a custom kill natural beef program with existing trademarks and tradenames all as provided in Schedule 4.6 and certified by Brawley Beef that those are current activities of Brawley Beef and its affiliates shall be deemed by USPB not to be activities that compete with USPB and its affiliates for purpose of the USPB Limited Liability Company Agreement.

ARTICLE 5
CONDITIONS TO CLOSING

5.1                 Conditions Precedent to Obligations of USPB at Closing.

(a)                Conditions to be Satisfied or Waived at Closing .  The obligations of USPB to consummate the transactions contemplated by this Agreement at the Closing are subject to the fulfillment, prior to or at the Closing, of each of the conditions in this Section (any or all of which may be waived in whole or in part by USPB).

(b)               Representations and Warranties of Brawley Beef are True.  All representations and warranties made by Brawley Beef to USPB shall be true and correct in all Material respects as of the Effective Date and as of the time of the Closing with the same effect as though made again at and as of that time.

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(c)                Compliance with Obligations and Covenants.   Brawley Beef shall have performed and complied in all Material respects with all obligations and covenants required by this Agreement to be performed or complied with by Brawley Beef prior to or at the Closing.

(d)               Notifications and Approvals Obtained.  All notifications, consents, authorizations, approvals and clearances from each Governme